Barry Leddicoat

Councils 'crippled' if feds cut back on disaster funds

COUNCILS are concerned insurance costs could cripple them if the Federal Government accepts recommendations put forward in a Productivity Commission draft report.

The commission has suggested the government slash disaster funding and increase mitigation funding.

But Local Government Association of Queensland chief Greg Hallam said the recommendation was impractical for communities regularly in the path of cyclones and floods.

"We welcome the commission's embrace of the benefits of properly funding disaster mitigation infrastructure but are concerned about any moves which would see the Commonwealth withdraw from its responsibilities in contributing its share of that funding," he said.

"We are also very concerned about the knock-on effects to councils of the commission's proposal that Commonwealth funding of disaster relief be reduced to 50%."

The commission found current disaster funding arrangements provided a financial disincentive for state and local governments to invest in mitigation and insurance because they would have to pay the full cost.

Much of their costs are reimbursed when essential assets are rebuilt under the current scheme.

Commissioner Karen Chester described it as "Groundhog Day".

"We heard many firsthand accounts of assets repeatedly damaged by successive natural disasters, only to be rebuilt in the same location and to the same standard," she said.

The Insurance Council of Australia chief Rob Whelan said Australian governments had been too focused on handing out billions of dollars following a disaster.

He supported the recommendation, saying it was time governments looked at the long-term benefits of investing in permanent mitigation.

The LGAQ has, though, backed the commission's call to allow councils to use their own staff to help clean-up and rebuild after natural disasters.

"We have told the commission that using day labour for disaster recovery actually saves taxpayers money and, unlike the federal bureaucracy, the commission has accepted our case," he said.

Federal Justice Minister Michael Keenan(correct) said since 2009, natural disasters across the country had claimed more than 200 lives, destroyed or damaged more than 10,000 homes, and impacted hundreds of thousands of Australian lives and livelihoods.

Mr Keenan encouraged people to make submissions about the report, as LGAQ will be doing.

The commission will also be holding public hearings in late-October, at various locations across the country.