How does Queensland pay for natural disasters?



TROPICAL Cyclone Marcia crossed the Queensland coast on 20 February 2015 and brought with it heavy rain and high winds and we know only too well the devastating effect of this disaster on rural communities.

Insurance claims in the wake of Marcia have climbed to an estimated $67 million and the total cost to the community is likely to be about $750m.  Production losses and infrastructure damage to primary industries has been estimated between $150-200m.

Grants of up to $25,000 are available for clean-up and recovery to eligible primary producers in the Livingstone and Rockhampton local government areas (LGAs) and part areas of the Banana and North Burnett LGAs.

But how do you budget for a disaster, especially in the face of predictions for an increased number and an increased intensity of disasters?

In 2013-14 Brisbane City Council spent $6.4m on disaster response and recovery in comparison with the budget allocation of $4.13m and this is just one example of the challenge faced. Few organisations and businesses will have accurately estimated these costs.

As announced last week, the Queensland Government is making the Queensland Reconstruction Authority (QRA) a permanent arm of government.

The Authority was established in 2011 to deal with the floods in south-east Queensland and Cyclone Yasi and was due to end its operation in June this year.

Deputy Premier Jackie Trad has said that recent experience shows that communities typically take about two years to recover from a natural disaster. The Authority is currently dealing with recovery from 15 natural disasters occurring between 2013 and 2014 alone.  The QRA comes at an annual cost of $30m.

The Australian Government is currently reviewing funding under the Natural Disaster Relief and Recovery Arrangements (NDRRA) with this review process looking for effectiveness and efficiency in disaster spending.

QFF acknowledges the high financial cost of previous disasters borne by the Australian and State governments as well as the ongoing pressure on State and Federal budgets. QFF also recognises the need for industry to increase its own preparedness and therefore improve self-reliance.

However, natural disasters will continue to disrupt even the best prepared businesses.

There will always be a place for ongoing government assistance for the recovery of primary industries, especially in exceptional disasters such as Cyclone Marcia.

Providing assistance to small and medium sized businesses provides a unique conduit to support the sustainable recovery of the local economy. The lack of appropriate and affordable insurance also means that it is difficult for farmers to manage natural disaster related risk in this way.

In answering the question of how we will pay for natural disaster response, QFF considers that any withdrawal or reduction of post-disaster assistance, should this occur, needs to be accompanied by a considered and long term plan to increase resilience.

QFF is progressing work in this area this year and we are demonstrating that resilience in the agricultural sector is dependent on a number of inter-dependent elements including for example, minimising risk, access to insurance, and good management.

QFF welcomes evidence-based policy reform which addresses the need to increase investment in preparedness (rather than recovery). Policy development and implementation on these issues can only benefit from consultation with industry, which has been largely absent to date.

The severe storm and cyclone season officially closes on April 30. I hope that both Queensland’s resilience policy agenda and practical preparedness will have progressed to put us in a better space to tackle the 2015-16 season.