Important reforms proposed for natural disaster funding
Large parts of regional Australia are highly exposed to natural disasters. The Productivity Commission inquiry into Natural Disaster Funding Arrangements has now proposed significant reforms that could change the way we deal with the risks and impacts of disasters for the better.
The Productivity Commission has concluded that the government’s current natural disaster funding arrangements are not efficient, equitable or sustainable. Their proposed solutions to this are quite significant changes to the current funding arrangements.
A key proposal is for stronger support for mitigation – investing to protect communities from the risks of disaster so that the costs of cleaning up do not get out of control.
The other key proposal is that post-disaster support by the Commonwealth be reformed to reduce the red tape involved in funding and provide better incentives for State and Local Government to respond to the needs of each community after a disaster.
The expected advantages of this proposed reform is greater autonomy for state and local governments to dictate where recovery funding would be best spent. This is particularly important for recognising the impacts of different disasters and the unique state of the community before and after a natural disaster.
The proposed reforms would also reduce the proportion of funding provided by the Commonwealth (from 75 per cent to 50 per cent) and the scale of disasters which qualify for funding, meaning that some smaller (<$2m total cost) but locally significant regional disasters will no longer qualify for Australian Government funding.
Given most disasters occur in regional Australia, it is important that regional Australian’s and their local governments think about how these reforms might play out in their local area.
Overall, the RAI is supportive of the reform directions proposed by the Productivity Commission.
However, the proposed changes to the percentage of Commonwealth government support and size of proposed mitigation investment need to be better explained given that these will be the source of greatest disagreement between the Commonwealth and other levels of government.
The recommendation to distribute new mitigation funding on a per capita basis is also an area where the RAI has encouraged further work. The varying levels of risk people are exposed to across the country may mean that this split does not provide the best outcomes.