Australians have claimed almost $100 million in assistance in five months following the devastation wrought by ex-tropical cyclone Ellie and floods in the nation's east.
Twenty-seven floods have caused more than 480 disaster declarations spanning 311 local government areas across Australia in 2022.
Disaster declarations covered nearly 70 per cent of Australia's population.
The joint federal and state governments disaster recovery funding arrangements have been activated by 305 local government areas since July, with the Commonwealth committing to cost share up to $1.8 billion.
Nearly $2.7 billion in joint funding has already been provided.
There were more than 30 requests for non-financial support following the floods and cyclone which resulted in the deployment of the defence force and aircraft.
Specialist personnel were also dispatched to Western Australia to help with the search of a lost radioactive capsule as well as to Turkey to assist with search and recovery after the devastating earthquake.
National Emergency Management Agency head Brendan Moon said the bureau was also looking ahead to future disasters.
It includes increasing investment in risk reduction through the government's $1 billion disaster ready fund.
"We're identifying and understanding our vulnerabilities by forging partnerships with industries like the insurance sector," he told senators on Monday.
Home affairs head Mike Pezzullo said the department was working towards climate change resilience to better position Australia to deal with significant crises.
"The mitigation and management of natural disasters, and recovery from them, are time and resource-consuming challenges for the government and the community," he said.
Emergency Management Minister Murray Watt was pushed on why government disaster grants weren't tax free, with small businesses and households struggling with the recovery.
Nationals senator Perin Davey said people were being hit with shock tax notices.
She said past grants for disasters like the Queensland floods hadn't been assessed as taxable income.
"Now is when people are reviewing and getting their tax done and finding out they're getting a whopping tax bill because they took advantage of a grant to help them recover from devastating floods," Senator Davey said.
Senator Watt replied it was "fair and reasonable" given they could claim tax deductions on money spent to fix damage and noted that had been the practice under the previous coalition government as well.
He said people would end up in "a tax neutral situation" due to the deductions.
"People aren't being punished," he said.
"There is no change to what happened in all but a couple of occasions while the coalition was in power.
"To now ask us why we're taxing grants paid to people in Lismore when that was a decision of your own government, I would have thought that was a bit of an own goal."
Senator Watt added the cyclone hitting Norfolk Island and New Zealand's North Island were a timely reminder of why Australia needed to be disaster ready.
Senator Watt has commissioned a review into the funding regime to ensure it's fit for purpose.
The review is being led by former bushfire recovery chief Andrew Colvin.
