Councils Can’t Afford Increased Share of Disaster Funding – Taskforce

The National Sea Change Taskforce has told a Productivity Commission inquiry hearing into natural disaster funding that coastal councils do not have the capacity to pick up an increased share of disaster funding.

Alan Stokes, of the Taskforce secretariat, told the public hearing in Melbourne on 28 October that under current fiscal arrangements local government receives only 3.4% of Australia’s taxation revenue, while the Commonwealth receives 81.5% and the states receive 15.3%.

The draft report of the Commission’s inquiry into natural disaster funding, released in September, recommended reducing the Commonwealth share of disaster recovery costs from 75% to 50%. It also recommended an increase in the threshold for ‘small disaster criterion’ payments from $240,000 to $2 million.

“It is clear from the taxation revenue figures that councils have little or no capacity to increase expenditure on disaster recovery or mitigation costs,” Alan Stokes told the Commissioners.

“Australia’s coastal councils are at the forefront of efforts to deal with the risk of natural disasters but they face major challenges in reducing that risk in the absence of adequate policy settings and resources.”

Alan Stokes said the Taskforce welcomed the draft report’s focus on changing the balance in disaster funding in favour of an increased allocation for mitigation. “We believe this is a move in the right direction because if undertaken strategically it could reduce the scale and cost of damage from future natural disasters,” he said.

“Once again, however, we question the capacity of local government to match the recommended increase in Commonwealth expenditure on mitigation funding to $200 million a year.”

Alan Stokes said what is currently lacking is an effective decision-making framework that brings together the three levels of government to work together to devise and implement a coordinated national approach to dealing with natural disasters.

“The current arrangements are diffuse and exercised by many different agencies at Commonwealth and State government level,” he said. “There is a need to clarify the roles and responsibilities of each tier of government in relation to natural disasters, plus a need to identify and select relevant mitigation projects.

“It is for that reason the Taskforce has proposed that the Australian Government play a leadership role in developing a coordinated national approach through the COAG Law, Crime and Community Safety Council, or through a relevant Ministerial Council.

He said this would be of critical importance in order to make a seamless transition from the current natural disaster relief and recovery arrangements to any new arrangements adopted by the Australian Government, particularly at a time when Federalism governance arrangements are subject to reform.