Australian Government to consult on changes to natural disaster funding
1 May 2015
Today the Australian Government is tabling the Productivity Commission’s final report into natural disaster funding arrangements. We commissioned this inquiry shortly after coming to Government as we recognise that the current system is flawed.
This follows yesterday’s tabling of an Australian National Audit Office (ANAO) report into national recovery funding arrangements.
Both reports are critical of the current funding system:
- The Commission argues that governments nationally focus too much on recovery, at the expense of directing resources towards better-preparing for future disasters.
- The ANAO criticises the lack of oversight and accountability for recovery funding under successive Commonwealth governments, and highlights systemic issues with state and local government claims for ineligible expenditure.
While the Australian Government will always have a role in supporting states affected by natural disasters – and we will always stand ready to assist communities in need – the findings of these two independent bodies make it clear that change is needed.
Today I have written to my state counterparts foreshadowing consultations on the best way to address the findings of these reports.
I have made it clear that the Australian Government is not proposing any radical reductions in the funding support it provides to the states. Instead we will seek to pursue a more modest and gradual approach to getting the balance of mitigation and recovery funding right, in close consultation with state governments.
Mitigation funding will ensure the most disaster-prone states are able to address their greatest risks. We want to work with the states to understand the scope of mitigation projects they wish to pursue, and find a way to support these projects without making dramatic cuts to recovery funding.
We also see merit in an upfront disaster funding system where the Australian Government provides grants to states based on an early assessment of disaster damage and impact, rather than the current system of reimbursing costs based on detailed rules.
Such a system would remove red-tape for all levels of government, and ensure states have more autonomy to recover from disasters in a way that best meets the needs of affected communities.
Importantly, the Productivity Commission report also raises a number of issues – including the need for better land use planning, and improved risk data and information sharing – which should be carefully considered by state and local governments.
The Government will provide a full response to the Productivity Commission’s final report following these consultations.