National Disaster Funding Weathers Change

The Australian Government asked the Productivity Commission (the Commission) to undertake a public inquiry into the efficacy of current 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.

On 25th September 2014, the Commission released its draft report on Natural Disaster Funding Arrangements.

The main recommendation of the report is to move towards a natural disaster funding system that focuses on long-term disaster mitigation. Currently the Australian Government spends only three percent of its natural disaster budget allocation on mitigation and 97 percent on post-disaster recovery. This budget allocation is considered to be inefficient, inequitable and unsustainable according to the Commission. Consequently, the Commission recommends a major restructure to see 20 to 25 percent of the natural disaster budget allocated to mitigation.

The Commission also found that the National Disaster Relief and Recovery Arrangements create disincentives for State and Local Governments to invest in mitigation or insurance. It is recommended that Federal Government cut post disaster subsidies from 75 percent to 50 percent with State Government making up the difference.

While it is understandable that this recommendation comes as unwelcome news to some Local Governments who are concerned that they may bear a greater financial burden, particularly those who are more exposed to natural disasters, there is merit in the paradigm shift. It is becoming increasingly important across all levels of society to become more aware of the increase in natural disasters and work together to build a more resilient built environment.

Edge Environment supports the Commission’s recommendation for a greater effort in mitigation. For the past four years Edge has been developing the Building Resilience Rating Tool (BRRT). The BRRT rates the resilience of buildings to natural hazards and aims to inform homeowners and other stakeholders about resilient building materials and design. Edge Environment is working to drive the market towards understanding the risks of natural disasters in the built environment in order to build a more resilient community.

The final report to the Government is due to be released December 2014.

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