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Disaster Recovery Funding Arrangements Review

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Disaster Recovery Funding Arrangements Review

Natural disasters are becoming more frequent and intense, which has led to an increase in recovery assistance in recent years. The Australian Government is committed to ensuring our natural disaster recovery funding arrangements are effective at supporting Australian communities with their recovery, as well as building resilience to future disasters.

To do this, we are working collaboratively with each state and territory to improve the national disaster recovery funding arrangements to ensure all Australians impacted by disasters can access equitable support and are treated more consistently and fairly, regardless of where they live.

 

Purpose

The Disaster Recovery Funding Arrangements (DRFA) Review is addressing recommendations by the Royal Commission into National Natural Disaster Arrangements aimed at ensuring Australians impacted by disasters are treated consistently and fairly, governments can respond quickly and appropriately, and communities are built back better.

It will ensure the DRFA is fit-for-purpose, appropriately targeted and accessible in the context of more frequent and severe natural disasters. The Review will also consider how to build resilience during the recovery phase, including by empowering communities and encouraging investment in risk reduction and infrastructure betterment.

The Commonwealth is committed to working collaboratively with all jurisdictions to ensure our national disaster recovery arrangements provide the support that disaster-affected communities need to recover and to become more resilient to future disasters.

 

Categories of assistance

There are four categories of assistance under the DRFA: Categories A, B, C and D.

Category A and B assistance is provided automatically by the state/territory without requiring approval from the Australian Government. 

Category C and D requests must be made by the state Premier/Chief Minister to the Prime Minister and will consist of the following two products:

  1. A cover letter from the state Premier/Chief Minister to the Prime Minster.
  2. A completed Category C/D Assistance Request Form for each Category C/D recovery initiative being requested.

 

New DRFA Category C and D activation process

A new streamlined process for activating Category C and D assistance has been developed as part of the DRFA Review. It was trialled during 2020-21 and 2021-22 and endorsed by the National Emergency Management Ministers’ Meeting in October 2022. It replaces pre-determined fixed indicators, which were administratively burdensome and delayed the provision of recovery support.

The new process recognises the states and territories are best placed to determine whether additional assistance is needed following a severe disaster, and that activating Category C and D assistance should be streamlined so that governments can act quickly and appropriately.

Key design features of the new process include a greater emphasis on contextual/qualitative information about impacts and recovery needs, and the commitment from states and territories to equally (50:50) share the cost of Category C and D assistance with the Commonwealth. The information requirements for the new process are generally consistent with those of a new policy proposal providing decision makers with sufficient information to appropriately consider the request in a timely manner.

This work addresses recommendation 22.8 that was made by the Royal Commission into National Natural Disaster Arrangements. 

     

    Activation process

    1. Disaster occurs
    2. The state determines that Category C/D assistance is needed
    3. The state develops a Category C/D request
    4. The state Premier/Chief Minister makes a Category C/D request to the Prime Minister
    5. The Prime Minster considers the request and responds to the Premier/Chief Minister
    6. The Category C/D assistance is jointly announced (if approved)
    7. Subsequent Category C/D requests (if required).

    Access the new activation form.

     

    Pre-agreed 'off-the-shelf' recovery packages

    A key deliverable of the DRFA Review is the development of a series of pre agreed ‘off the shelf’ recovery packages that address common gaps in assistance across the social, built, economic and environmental recovery domains to ensure that governments have the means to quickly and effectively respond to severe disasters.

    This work addresses recommendation 22.5 made by the Royal Commission into National Natural Disaster Arrangements. 

     

    Betterment of essential public assets post disasters

    Following a disaster, the restoration of an essential public asset may provide a cost effective opportunity to improve its resilience to future disasters and help reduce recovery costs longer-term. There are also significant social, economic and environmental benefits from infrastructure betterment, including more connected communities, continuity of essential services and trade, and reduced impacts on the environment.

    For the purpose of the DRFA, infrastructure betterment is the restoration or replacement of a damaged essential public asset to a more disaster resilient standard than its pre disaster standard, where the cost of doing so exceeds the claimable estimated cost (i.e. the established reconstruction cost) under Category B. 

    Examples of infrastructure betterment include raising the height of a bridge above the flood level, adding additional culverts (that did not exist before the disaster occurred) to drainage systems to increase flow capacity, and upgrading vulnerable sections of unsealed roads to sealed assets (replacing gravel sections with bitumen seal). The use of climate and risk information to inform the best solution is strongly encouraged.

    Under current Category B arrangements, states, territories and local governments have autonomy to deliver practical reconstruction solutions that are best suited to the needs of local communities. This may include relocating an asset or adopting alternative disaster resilient design. Complementary funding (from a source other than DRFA) can also be used to improve or enhance an asset’s functionality—for example, widening a road to increase traffic volume.

    Infrastructure betterment funding is currently only available through Category D of the DRFA, which provides for discretionary funding to be approved by the Prime Minister in exceptional circumstances following a request from the Premier/Chief Minister. Category D infrastructure betterment funds are equally cost-shared by the Commonwealth and the state/territory. 

    The Category D betterment component of an infrastructure restoration project is calculated as the difference between the estimated claimable cost (i.e. the established reconstruction cost) under Category B (i.e. to restore a damaged essential public asset to its pre-disaster standard), and the cost to rebuild the asset to a more resilient standard. 

    States and territories can request funding for Category D infrastructure betterment using the new streamlined Category C/D activation process linked below. 

    Access the program guidelines for the new ‘off-the-shelf’ Category D infrastructure betterment package.

     

    Primary producer recovery grants

    Primary producers play an integral role in local economies and communities. These grants are intended to minimise disruption in the affected area and assist primary producers to recover by contributing to the costs of clean-up and reinstatement activities for those primary producers who have suffered direct damage as a result of an eligible disaster. 

    Some of the clean-up and reinstatement activities that can be funded include, but are not limited to:

    • building repairs
    • disposal of debris, damaged goods or materials (including dead livestock)
    • materials needed to resume trade
    • replacement of lost or damaged plants, salvaging crops, repairing or restoring fields
    • repairing, reconditioning or replacing essential plant or equipment
    • maintaining the health of livestock
    • replacing livestock.

     

    For full details about measures eligible for funding, refer to the grant guidelines linked below. 

    Access the DRFA Primary Producer Grants guidelines.

     

    Small business and not-for-profit organisation recovery grants

    Small businesses and not-for-profit organisations play an integral role in local economies and communities. These grants are intended to assist small businesses and not-for-profit organisations to continue or commence operations as soon as possible where the impact of an eligible disaster event has been severe.

    Some of the clean-up and reinstatement activities that can be funded include, but are not limited to:

    • safety inspections
    • building repairs
    • cleaning equipment
    • purchasing, hiring or leasing equipment or material to clean the damaged property, premises or equipment
    • employing workers to clean the premises or equipment
    • materials needed to resume trade
    • disposing of debris and spoiled stock.

     

    For full details about measures eligible for funding, refer to the grant guidelines linked below. 

    Access the DRFA Small Business and Not-for-Profit Grants guidelines.