Natural Disasters Funding Reform

Abstract

Queensland is the most disaster-impacted state in Australia. Since the establishment of the Queensland Reconstruction Authority (QRA) in 2011, our state has been impacted by 60 significant natural disaster events resulting in loss of life and billions of dollars of damage to public infrastructure. QRA ensures the efficient and effective coordination of natural disaster reconstruction efforts across Queensland and has administered more than $14.4 billion in restoration funding under the Natural Disaster Relief and Recovery Arrangements (NDRRA) and State Disaster Relief Arrangements for natural disaster events occurring since 2009. In April 2014, the Commonwealth Government asked the Productivity Commission to undertake a public inquiry into national natural disaster funding arrangements, taking into account the priority of effective natural disaster mitigation and the reduction in the impact of disasters on communities. The Productivity Commission released its final report in May 2015, recommending a suite of reforms to the NDRRA. QRA has led Queensland’s response to these reforms since 2015, working with key stakeholders such as Emergency Management Australia (EMA) and local government agencies to minimise risk to Queensland. With the cessation of the NDRRA due on 30 June 2018, the Commonwealth Government released its final version of the reforms on Friday 8 June 2018. The new Disaster Recovery Funding Arrangements (DRFA) will apply to disaster events from 1 November 2018, with the existing NDRRA Determination 2017 applying to natural disasters occurring between now and 31 October 2018. The reforms include improved autonomy for states and territories in how they deliver works, the ability for local governments to use their own labour, plant and equipment, and the ability to allocate efficiencies realised in delivery of reconstruction programs to resilience and mitigation projects. However, the DRFA also represent a potential transfer of financial risk to Queensland, as the state will not be reimbursed for actual expenditure that exceeds the approved total estimated reconstruction cost. There is limited criteria for special circumstances and contingencies encountered by delivery agencies when delivering complex projects and there are also new and more complex assurance requirements. QRA is continuing to undertake further analysis of the finalised version of the DRFA, and has engaged Deloitte to complete detailed financial modelling and analysis. With Queensland’s extensive experience in managing disasters and the work undertaken by QRA since 2011, many of the processes to be rolled out nationally are already in place in Queensland, so the state is well placed to manage implementation of the DRFA. The Queensland Government is determined to ensure our local governments and the communities they serve are not disadvantaged by the new arrangements.