Commonwealth spending on flood recovery will top $6bn over the next four years, as budget papers reveal the federal government will again dip into its Emergency Response Fund and spend the maximum annual allocation of $150m in the upcoming financial year.
The Morrison government’s decision to spend the entire Emergency Response Fund annual allocation in the 2022-23 financial year comes 11 days after it backflipped on its long-held resistance to accessing the $4bn pool of funding when it announced it would withdraw $150m for the current financial year.
While the first withdrawal from the fund was to be split evenly between the New South Wales and Queensland governments to pay for recovery efforts, budget papers state that $150m from the fund to be spent in 2022-23 will be provided to “fast track recovery and post-disaster resilience”.
The government will engage the Commonwealth Scientific and Industrial Research Organisation (CSIRO), at a cost of $10.4m over two years, to identify the most promising projects for flood mitigation in the NSW northern rivers region.
Tuesday’s federal budget included a comprehensive flood package, which outlined a raft of new measures including providing two additional $1,000 Disaster Recovery Payments to residents in catastrophically impacted areas who have already claimed their initial payments.
The government believes these two additional payments will cost $245m in coming months, and take its total spending on disaster payments as a result of the floods to $450m by July.
The government will also spend $10m over four years on a program called Resilient Kids, designed to deliver mental health care and trauma education to primary and secondary students in the NSW northern rivers affected by recent floods.
Childcare providers in flood affected communities will receive $22.1m to help them continue operations, while the commonwealth will provide $5m in “targeted support” to non-government schools in NSW and Queensland affected by the floods.
Small businesses affected by the floods will also be able to access free financial counselling, at a cost of $800,000, while the government will give $1.7m to Emergency Management Australia to integrate with the National Resource Sharing Centre “to better share resources and capability information across states and territories and the Commonwealth during large-scale disasters”.
While the government’s plans for spending on floods are less clear after the upcoming financial year, it has budgeted to spend a further $3bn in disaster payments and allowances related to this year’s NSW and Queensland floods by June 2026.
One reason for this large anticipated spend is because the commonwealth pays up to 75% of the cost of public assets, such as rebuilding roads.
In announcing the flood package, the emergency management minister, Bridget McKenzie, said “we are listening to communities and providing funding for support where it is needed most”.
“These budget initiatives will play a critical role in supporting disaster-impacted local communities and businesses to recover as quickly as possible and be better prepared for future events,” McKenzie said.
The Treasurer, Josh Frydenberg, in his budget delivery speech said the flood package “will deliver hope, work and the prospect of returning to a better life”.
“Nothing I say can overcome the personal pain and loss of so many Australians. We will stand with these communities and help them rebuild,” Frydenberg said.
A large share of the commonwealth’s expected $6bn total spend on floods by June 2026 include reimbursing the NSW and Queensland state governments for joint-funding efforts previously announced.
The NSW and federal governments had previously announced jointly funded measures including a $100m package for small and medium businesses in the LGAs of Lismore, Ballina, Byron, Kyogle, the Richmond Valley, Clarence Valley and Tweed.
They have also announced $35m in rural landholder grants, $150m for the primary industry sector to protect supply chains, $142m for property assessments and demolitions, $300m to pay for cleaning up debris, and $285.2m for temporary housing packages including motor homes and housing pods.
The Queensland and federal governments have so far jointly funded $558.5m in measures, including $75,000 grants for primary producers, $50,000 grants for small businesses and non-profits, and $20,000 for sporting and community clubs.
