Opinion - Disaster funding reforms risk shifting burden to rural and regional councils

Reforms could be a disaster for councils

Disaster funding reforms risk shifting the burden on to Tasmania's rural and regional councils, writes Mick Tucker

No one disputes that Australia’s disaster funding arrangements need reform.

Natural disasters are becoming more frequent, more severe and more costly. Communities need recovery funding that is simpler, faster and fairer. The Australian Government’s proposed Disaster Recovery Funding Framework seeks to achieve those goals through nationally consistent support packages, streamlined administration and a new focus on resilience.

However, from a Tasmanian local government perspective, there is a significant risk that the proposed reforms will shift greater financial responsibility onto councils.

Tasmania’s councils already contribute significantly to disaster preparedness, response and recovery. They repair roads, restore bridges, clear debris, support emergency operations and help communities rebuild. Many of these responsibilities come without dedicated, long-term funding streams.

The proposed thresholds for when funding will be available are of particular concern. Analysis on the proposed reforms indicates that had the proposed thresholds applied since the Disaster Recovery Funding Arrangements commenced in 2018, Tasmania would have received approximately $7.5 million less in disaster recovery funding, with only five disaster events meeting the proposed activation threshold during that period, compared to 15 under current arrangements.

Any reduction in eligible activities or increase in activation thresholds risks transferring a greater share of disaster costs onto local communities. For councils with small rate bases and extensive road and infrastructure networks, even relatively modest shifts in cost can have significant impacts on financial sustainability.

Rural and regional councils operate with smaller rate bases and higher per-capita infrastructure costs. They do not have the financial capacity of larger metropolitan councils, yet they are often responsible for extensive road networks and critical community infrastructure exposed to bushfire, flood and coastal hazards.

This is happening at a time when Tasmanian councils are already confronting substantial financial pressures from rising construction costs, ageing infrastructure, workforce shortages and increasing community expectations.

Disaster recovery funding reform must not compound that problem.

If governments are serious about building resilience, funding models must recognise the differing financial capacities of communities. Equitable disaster funding should reflect risk, exposure and capacity to pay - not rely on a one-size-fits-all funding formula.

LGAT supports efforts to streamline processes, reduce red tape and invest more heavily in resilience measures. We also welcome initiatives that help communities rebuild stronger after disasters. But these positive reforms should not come at the expense of councils’ financial sustainability.

The reality is that local government is increasingly on the frontline of disaster response and recovery. Tasmania’s councils stand ready to work constructively with the Australian and Tasmanian Governments to improve disaster funding arrangements. But any final framework must ensure that financial risk is not simply shifted down the chain to communities least able to bear it. If this were to happen, not only would councils be less prepared for disasters, but communities would be more vulnerable and exposed to disaster impacts.

A stronger disaster recovery system should strengthen local government capacity – not weaken it. Our rural and regional communities deserve nothing less.

Mick Tucker
LGAT President

As published in The Mercury on 6 July 2026.