Australian Government reverses disaster funding policy

The Australian Government has abandoned a proposal to reduce the Commonwealth’s share of disaster recovery costs following significant opposition from state and local leaders. The federal government had previously suggested a 50-50 cost-sharing model between the Commonwealth and states, a move that critics argued would place an immense financial burden on disaster-prone regions.

Federal Treasurer Jim Chalmers announced that the existing funding framework will remain, with the Commonwealth continuing to contribute up to 75 per cent of eligible disaster recovery costs when specific criteria are met. The decision aims to provide financial certainty and ensure funds reach affected areas quickly.

Queensland Premier David Crisafulli, who had described the proposed change as an ‘unmitigated disaster’ that could lead to local rate rises, welcomed the reversal. He characterized the move as a ‘commonsense decision’ that protects the state from the devastating economic consequences of floods and cyclones. Local council leaders also expressed relief, noting that the previous funding model has been essential for community rebuilding for decades.