Australian Government reverses disaster recovery funding changes

The Australian federal government has abandoned a proposal to implement a uniform 50:50 cost-sharing split for disaster recovery between the Commonwealth and states or territories. Under the previous framework, the Commonwealth could contribute up to 75 per cent of recovery costs in certain areas.

Treasurer Jim Chalmers confirmed the reversal on October 9, stating that the decision followed consultations aimed at providing certainty and funding when disasters occur. The decision follows significant opposition from state and local governments, as well as industry groups.

The Queensland Trucking Association (QTA) welcomed the move, noting that changes to funding threatened vital freight connections. QTA CEO Gary Mahon highlighted that damaged infrastructure impacts the delivery of food, fuel, and medicine, increasing costs for transport operators.

Local government representatives also expressed relief. The Australian Local Government Association described the decision as a win for communities, noting that shifting more costs to local councils would have placed an unsustainable burden on budgets and ratepayers, particularly in rural and regional areas.