$4bn federal disaster fund sitting unused

More than 70 projects worth a combined $243m are vying for a slice of the federal government’s unused $4bn Emergency Response Fund.

Agriculture, Drought and Emergency Management Minister David Littleproud. Picture: Gary Ramage

More than 70 projects worth a combined $243m are vying for a slice of the federal government’s unused $4bn Emergency Response Fund, but only $50m will be paid out this year for natural disaster mitigation works.

The fund is supposed to pay out $200m a year to help local governments deal with cyclones, floods and bushfires, with $150m set aside for disaster recovery and $50m for mitigation, but no money has been spent since the fund was announced in April 2019 and legislated in December 2019.

A Senate estimates hearing last month revealed there were 74 flood prevention projects worth a combined $250m that had applied for ERF funding but were yet to be assessed.

Queensland councils in flood and cyclone-prone areas along the coast have criticised the federal government for failing to use the fund.

Federal Emergency Management Minister David Littleproud said the reason no money had been paid from the disaster recovery tranche was because the legislation prohibited the fund from being used before other disaster funds, such as the bushfire recovery fund, were exhausted.

He blamed the lack of money for mitigation projects on the time required to set up the proper processed to assess applications.

“As soon as the legislation passes, you can’t just administer the funds right away,” he said. “You have to set up the governance around it. All of the decisions are at arm’s length from me.”

He said he would announce the winning projects this month.

The Department of Home Affairs will, in consultation with other agencies, evaluate the 74 applications, including applications from each state and territory, before passing its recommendations on to Mr Littleproud.

Applications for funding through the National Flood Mitigation Infrastructure Program opened in December and closed on February 12.

Mr Littleproud said there would be further announcements “in the near future” about mitigation measures out of recommendations from the bushfires royal commission.

The Australian understands the priority project put forward by the Queensland Reconstruction Authority to the ERF was an $85m flood levee in Bundaberg, north of Brisbane. The state government would contribute $42.5m towards the levee’s construction.

Labor senator Murray Watt said the government had earned more in interest from the fund than what had been spent and the excuses for delays would be cold comfort for Australians in regions hit by disasters.

“Is he seriously saying it takes the government two years to set up a program to distribute $50m, especially when you have five times as many projects for the funding as you have in funding?” he said.

“It shows the level of demand out there for mitigation funding. It’s not for want of projects that these mitigation measures aren’t being built, it’s for want of funding.

“If there are other funds that need to be used, use them — don’t just use them as an excuse to say we can’t use these funds.”

Senator Watt said mitigation projects had a positive impact on insurance premiums in affected regions.

Local Government Association of Queensland chief executive Greg Hallam has criticised delays in the rollout but said he was optimistic the fund would be put to use after he led two delegations of Queensland mayors to meet Mr Littleproud and other ministers in Canberra to discuss the issue since January. “They understand the need to get money on the ground as quickly as possible,” he said.

“We will be concerned if measures aren’t announced at the time of the federal budget.”