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Productivity Commission wrong, wrong, wrong

The impact on councils of implementing a recommended dramatic cut to the federal share of funding for natural disaster recovery and reconstruction would be nothing short of devastating.

This is spelled out in detail in the LGAQ’s submission to the Productivity Commission’s current inquiry into the future of natural disaster funding. Among a raft of recommendations in the Commission’s draft report was the proposal to cut the Federal Government’s contribution to disaster relief from the current 75 percent to 50 percent.  The Commission also wants to lift the threshold that triggers public funding relief for small disasters. The LGAQ insists that, regardless of what else the Government might accept from the Commission’s recommendations, these two measures would put an unbearable burden on local governments. 

“Over the period from 2009 to 2014, Queensland local government would have faced an additional cost of at least $1.3 billion under the draft report proposals,’’ the LGAQ states.

Where would this money have come from? Not from the State Government, which had enough of a struggle delivering its 25 percent share of disaster relief funding following the spate of floods and cyclones since 2010.

The LGAQ also gives short shrift to the Commission’s view that the Natural Disaster relief and Recovery Arrangements, which enshrine the 75/25 funding split between the Commonwealth and the states, are discouraging Queensland councils from insuring their assets.

“As has been independently verified by the Department of Finance and Deregulation, councils comprehensively insure their civic assets despite the ongoing availability of NDRRA funding for natural disaster damage to those assets,’’ says the LGAQ submission.

“Expecting local governments to take out disaster insurance for roads would result in most councils being subjected to crippling premiums.’’

The Commission does have some admirable things to say about the importance of mitigation infrastructure and how current federal regulations hampering the ability of councils to quickly recover from natural disasters.

But most of its draft report into this most fundamental of financial challenges facing local councils is written from the perspective of a federal agency seeking to save federal money. 

The Commission’s draft report is bound to create fireworks at the LGAQ annual conference in Mackay next week.  


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