Federal Government to launch inquiry into national disaster funding arrangements

Updated

With Australia's bushfire and cyclone season looming, the Federal Government has announced an inquiry into national disaster funding arrangements.

Treasurer Joe Hockey will ask the Productivity Commission to look into what the nation spends on disasters and the effectiveness of current mitigation support arrangements.

However, the Opposition says that is code for cuts to the emergency hand-outs given to disaster victims.

The Commonwealth Government has spent almost $13 billion over the past four years in disaster recovery payments made to individuals and to the states and territories.

Most of that has been focussed on the response and recovery operations that take place immediately after a disaster strikes.

But there is a growing push for greater investment in building up community resilience before disasters hit.

Campbell Fuller from the Insurance Council of Australia said investment in levees, flood gates or bushfire shelters would also reduce the risk to community and private assets.

"Every dollar that you can spend to reduce the risk has a long-term payoff for the community," he said.

"Resilience takes other forms, including making sure that any buildings that you construct in these areas are able to withstand the particular effects of extreme weather events."

However, Mr Fuller said he did not believe there was a responsibility for the insurance industry to help fund such works, given they would likely to benefit from decreased payouts.

"Whether you have insurance or not, anything that lowers the risk means that you're much more likely to be affected," he said.

"And where the insurance industry comes in is where the risk is reduced, that's reflected in the insurance premiums."

Labor fears inquiry could cut disaster payments

The Government will also ask the Productivity Commission to report on the best ways to reduce the impact of natural disasters on communities and recommend how they can recover in a sustainable way.

Mr Fuller says the commission is well placed for such an inquiry, given its experience this year looking at responses to climate change.

But New South Wales Labor Senator and shadow minister for human services, Doug Cameron, disagrees.

Senator Cameron, who lives in the Blue Mountains, west of Sydney, which suffered a big bushfire in October, has accused the Federal Government of short-changing residents affected by the fires there.

He said an inquiry is not needed and is being used as an excuse to cut emergency payments to disaster victims.

"I think the underlying position here is how do you do more cost-cutting? How can you penny-pinch more against people that are in trouble?" he said.

The Government says it will consult with the states and territories on the terms of reference for the review which should get underway next year.

Topics: disasters-and-accidents, fires, floods, federal-government, insurance, industry, business-economics-and-finance, australia, wa, vic, tas, act, nsw, qld, sa

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