Given the current NSW wildfires we can only feel sympathy and concern for those affected and hope that the State and Federal governments will provide appropriate assistance to the community. Exactly what governments provide is often misunderstood a The matter is not helped with reports, such as the one found in The Guardian (Katharine Murphy, ‘NSW bushfires: Tony Abbott says Canberra will pay half cost of rebuilding’ 18 October 2013.

In that report the Prime Minister is quoted as saying

… Canberra will pick up half the costs of rebuilding in New South Wales after the devastating bushfire emergency …the prime minister confirmed the standard disaster relief arrangements would apply in NSW, with Canberra “picking up at least 50% of the tab”.
Additional resources will also be available to the community through Centrelink … Payments of $1,000 for eligible adults and $400 for children will cover people in the Blue Mountains, Lithgow, Muswellbrook, Port Macquarie-Hastings, Port Stephens, Wyong and Wingecarribee.

A more accurate summary of Federal payments is found on the ABC website (Pat McGrath, ‘Springwood evacuation centre becomes hub of Blue Mountains bushfire relief effort’ 19 October 2013. That report says:

“State and Federal Governments have announced disaster relief for communities affected by the bushfires….

Locals from the worst-affected areas across eastern New South Wales and the central and north coast will now be able to access money for emergency food, clothing and accommodation.

There will be loans available for not-for-profit groups, primary producers and small businesses.

Funding is also available to local councils and the state government to help pay for what has been a massive counter-disaster effort and the considerable cost of replacing and repairing infrastructure.”

What that report shows is that there are different types of payments;
1. Assistance for those directly affected by the fires;
2. Assistance for groups and business and
3. Assistance or local and state governments.

Understanding what assistance is available is essential both for those affected by the current tragedy, but also in post event reviews to understand what is paid for, and what is not.
The main State/Commonwealth arrangements are the NDRRA or Natural Disaster Relief and Recovery Arrangements (see http://www.em.gov.au/Fundinginitiatives/Naturaldisasterreliefandrecoveryarrangements/Pages/default.aspx for the details). Under those arrangements Commonwealth assistance is directed to “state measures that complement other strategies in relation to natural disasters, such as insurance and disaster mitigation planning and implementation.” [Natural Disaster Relief and Recovery Arrangements Determination, 2012 [1.1.2]). It is intended that payments are made to the states (not individuals) once the States have incurred expenditure on natural disaster relief and recovery in excess of prescribed thresholds (Natural Disaster Relief and Recovery Arrangements Determination, 2012 [1.2]). The Commonwealth pays 50% after state payments exceed the first threshold (currently $140m for NSW) and 75% when state expenditure exceeds the second threshold (currently $245m for NSW – see http://www.disasterassist.gov.au/NDRRADetermination/Pages/default.aspx).

There are four categories of state expenditure that attract NDRRA payments (Natural Disaster Relief and Recovery Arrangements Determination, 2012 [3.1]-[3.5]). They are:

Category A: emergency assistance given to individuals to alleviate their personal hardship or distress arising as a direct result of a natural disaster. Eligible measures under Category A include the provision of emergency clothing and accommodation, removal of debris, emergency repairs to housing.
Category B: assistance with the restoration or replacement of essential public assets and emergency low interest loans, subsidies or grants to businesses, primary producers, “needy individuals” and/or voluntary non-profit bodies.
Category C: expenditure on significant community recovery activities designed to “restore social networks, community functioning and community facilities”.
Category D: expenditure designed to alleviate distress or damage in circumstances that are, in the opinion of the Minister, exceptional.

Category A includes temporary repairs to make homes habitable (such as tarping roofs after a storm). Category A payments can include reimbursing the states for expenditure related to “demolition or rebuilding to restore housing to a habitable condition [and] removal of debris from residential properties to make them safe and habitable” (Natural Disaster Relief and Recovery Arrangements Determination, 2012 [3.2.2]) which, prima facie, may include the cost of clearing a home site and rebuilding the home but, equally arguably, building a new home is not restoring housing to a habitable condition. The Commonwealth says that the “NDRRA is intended to alleviate damage or distress arising as a direct result of a natural disaster and is not meant to restore lifestyles to pre-disaster standards” (http://www.disasterassist.gov.au/FactSheets/Pages/NaturalDisasterReliefandRecoveryArrangements.aspx). Categories B and C are directed to public not private assets and activities.

Apart from the NDRRA the Federal Government pays an Australian Government Disaster Recovery Payment (Social Security Act 1991 (Cth) Part 2.24. The current rate is “$1,000 per eligible adult and $400 per eligible child” (http://www.disasterassist.gov.au/Currentdisasters/Pages/NSW/NSW—Eastern-NSW-Bushfires—from-16-October-2013.aspx).

With respect to the NSW fires that started on 9 October 2013, the payment is available if

(a) as a direct result of the disaster:
(i) the person is seriously injured; or
(ii) the person is an immediate family member of an Australian who is killed; or
(iii) the person’s principal place of residence has been destroyed or has sustained major damage; or
(b) the person is the principal carer of a child to whom paragraph (a) applies.
(Social Security (Australian Government Disaster Recovery Payment) Determination 2013 (No. 5)).

The Commonwealth also pays a Disaster Recovery Allowance, (Social Security Legislation Amendment (Disaster Recovery Allowance) Act 2013 (Cth)). This Act only commenced on 1 October 2013 and introduces a new part 2.23B into the Social Security Act 1991 (Cth). The Allowance provides for a payment for up to 13 weeks to assist people affected by a disaster, but as far as I can tell, the Commonwealth has not yet determined what the rate of payment will be. Equally I can find no reference to suggest that the Minister has authorised this payment for this disaster (see http://www.disasterassist.gov.au/Currentdisasters/Pages/NSW/NSW—Eastern-NSW-Bushfires—from-16-October-2013.aspx).

Discussion
In the first article cited above, the Prime Minister is alleged to have said “Canberra will pick up half the costs of rebuilding in New South Wales…:” but that is not true if what you expect from that statement is that the Commonwealth will pick up half the cost or rebuilding peoples homes that have been tragically lost. Some funding could be provided to rebuild private assets under Category A and D but that would be unusual and contrary to the stated aim that the NDRRA is intended to “alleviate damage or distress arising as a direct result of a natural disaster and is not meant to restore lifestyles to pre-disaster standards”

What it actually means is that the Commonwealth will repay the State half of what it spends on disaster recovery where that is aimed at emergency relief and rebuilding state and community assets, not private homes.

The Commonwealth will also provide some immediate payments for those whose homes have been destroyed or damaged.

At this time of tragedy, I make no comment on whether or not the NDRRA and assistance provided to affected families is or is not appropriate, but those affected by the disaster, and those not affected but who may be concerned about the impact Commonwealth relief has on issues such as developing community resilience or the value of insurance need to know what the Commonwealth law actually says. Claims by political leaders that they will ‘rebuild’ affected communities makes good press, but does not accurately reflect the actual level os assistance (usually) provided.

Michael Eburn
19 October.