Home » Disaster Politics » Budget 2013-14: A disaster wrap-up

Budget 2013-14: A disaster wrap-up

Today the Federal Government released its election year budget. Whilst most folk are talking deficits, loss of entitlements and so forth I’ll focus on disasters of a different sort.

Though the Federal Government does do a lot of counter-disaster work through its agencies (such as the Attorney General’s Department, Bureau of Meteorology, Department of Defence and Department of Agriculture, Forestry and Fisheries) they don’t appear to have any new expenditure items this year, or significant cuts. This leaves the money provided to the states and territories for mitigation and recovery (contained in Budget Paper 3).

Mitigation

There’s one big ticket item in the Federal budget – the National Insurance Affordability Initiative. Though previously announced the budget confirms $100 million over two years to improve flood mitigation.

This will support a National Partnership on the implementation of the National Insurance Affordability Initiative which will provide funds to the states for flood mitigation projects and to establish a National Insurance Affordability Council. It’s unclear where the Commonwealth’s spend on the establishment of the NIAC will come from. However part of this NP will likely involve the States and Territories having to provide flood information to the Commonwealth’s new National Flood Information Portal and, to an extent, standardise flood mapping and modelling approaches across the country. This initiative will probably be the carrot for that.

Half of this funding is earmarked for the raising of Warragamba Dam (I’ve discussed this before) which, though highly recommended by Infrastructure NSW, hasn’t been committed to by the NSW Government. The cost of raising the dam wall would be somewhere in the vicinity of $400 million, so the Commonwealth would be contributing less than 15%. The project is also far from shovel ready.
Another 17 million is earmarked for projects in Queensland to build the Roma Levee and upgrade flood defences in Ipswich. $7 million has been allocated to the Roma Levee which has a total cost of $20 million, with the state government picking up the rest of the tab.
This leaves the following allocations for the states:
NSW VIC QLD WA SA TAS ACT NT Total
2013-14 2.6 2 1.6 0.9 0.6 0.2 0.1 0.1 8.1
2014-15 8 6.2 5.1 2.8 1.8 0.5 0.4 0.3 25.1
2015-16
2016-17
10.6 8.2 6.7 3.7 2.4 0.7 0.5 0.4 33.2
This will in its second year roughly double the amount of general disaster mitigation funding provided to the states. The three target areas represent only about 12,000 homes out of 140,000 properties nationally facing large flood insurance premiums. Outside of these areas it’s unlikely to change flood insurance premiums by an appreciable amount.
Though the National Partnership Agreement on Natural Disaster Resilience (aka the NDRP) expires this fiscal year the Federal Government has committed to its continuation with a spend of $109 million over 4 years:
NSW VIC QLD WA SA TAS ACT NT Total
2013-14 6.8 4.2 9 4.7 2.1 1.3 1.3 1.3 30.7
2014-15 6.8 4.2 6 3.1 2.1 1.3 1.3 1.3 26.1
2015-16 6.8 4.2 6 3.1 2.1 1.3 1.3 1.3 26.1
2016-17 6.8 4.2 6 3.1 2.1 1.3 1.3 1.3 26.1
27.2 16.8 27 14 8.4 5.2 5.2 5.2 109
(it appears as though QLD and WA have missed out on getting half of their payments in 12-13 which is why they have higher figures for this fiscal).
It doesn’t look like a new National Partnership Agreement has been negotiated – which will likely create all sorts of problems for the Commonwealth and the jurisdictions in terms of establishing projects and getting good cashflow.
Adding both these measures together, including the 3 large projects, gives the following spend:
NSW VIC QLD WA SA TAS ACT NT Total
2013-14 34.4 6.2 27.6 5.6 2.7 1.5 1.4 1.4 80.8
2014-15 39.8 10.4 11.1 5.9 3.9 1.8 1.7 1.6 76.2
2015-16 6.8 4.2 6 3.1 2.1 1.3 1.3 1.3 26.1
2016-17 6.8 4.2 6 3.1 2.1 1.3 1.3 1.3 26.1
87.8 25 50.7 17.7 10.8 5.9 5.7 5.6 209.2

Recovery

Recovery expenditure in the current and forward years relates to the Natural Disaster Relief and Recovery Arrangements, which the budget papers outline on both a cash and accrual basis (I will report the cash figures). Strangely the Budget doesn’t make provision for NDRRA payments for any future disasters (which it used to – at a thoroughly inadequate $80 million a year) though forecasting future disasters is rather harder than forecasting economic conditions. Here’s the numbers:

NSW VIC QLD WA SA TAS ACT NT Total
2013-14 223 98.9 1641.7 47.1 3.7 16.9 2031.3
2014-15 2.9 0.1 2909.1 0.1 2912.2
2015-16 0.1 860.6 860.7
2016-17 0
225.9 99.1 5411.4 47.2 3.7 16.9 0 0 5804.2

It’s quite clear that there’s a fairly big mismatch between the amount the Commonwealth provides to the states for mitigation and for recovery. We shouldn’t generalise this though – both state and local governments spend quite  bit on mitigation, preparedness – and there’s the amount the Commonwealth spends on its own counter disaster agencies. Will we see more money for mitigation in a future budget?

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