Review of the operations of the NSW Reconstruction Authority

Review of the operations of the NSW Reconstruction Authority

Grants and funding arrangements

51

5.24 The Committee welcomes these improvements to grant administration and

recommends the Authority make further changes to improve grant processes to

better support impacted communities for future disasters.

5.25 The Committee recommends that these grant processes should include clear and

consistent eligibility criteria, and should be flexible enough to account for a wider

range of individual circumstances. These processes should also involve a 'risk-

based' approach to grants. This should balance the need to get support to

affected communities quickly, with the need to responsibly manage public money

and to ensure public value.

Issues with Joint Disaster Recovery Funding Arrangements (DRFA)

5.26 The Authority is responsible for coordinating Disaster Recovery Funding

Arrangements (DRFA) in NSW to help councils and communities recover and

rebuild after natural disasters. This disaster relief is delivered to individuals,

community groups and businesses by a variety of NSW Government agencies,

such as Service NSW and the NSW Rural Assistance Authority.318

5.27 DRFA were activated as part of the response to the May 2025 East Coast severe

weather event following the Natural Disaster Declaration on 21 May 2025.319

5.28 Throughout the inquiry, the Committee heard that there are significant issues

with DRFA, particularly for local councils.

320 The NSW Government and the

Authority also acknowledged that there are challenges under the current DRFA

framework.

321 These issues are explored in further detail below.

5.29 The Committee has made several recommendations to the Authority and the

NSW Government to improve the consistency of guidance and support provided

to local councils, including prioritising improvements to streamline payment of

DRFA funds, as well as advocate to the Australian Government for reforms to the

DRFA.

What are Disaster Recovery Funding Arrangements (DRFA)?

Disaster Recovery Funding Arrangements (DRFA) are the model in which the

Australian Government provides states and territories with funding to assist

disaster affected communities.322 Funding can be provided as a financial

318 NSW Reconstruction Authority, Disaster Recovery Funding Arrangements Coordination, last updated 22

December 2025, accessed 30 March 2026.

319 Minister for Recovery, Disaster support for sixteen Hunter and Mid North Coast LGAs following severe flooding,

media release, 21 May 2025, accessed 30 March 2026.

320 For example: Submission 19, p 1; Submission 45, MidCoast Council, p 3; Submission 33, Hunter Joint

Organisation, p 15; Submission 39, Central NSW Joint Organisation, p 3; Submission 6, Clarence Valley Council, p 5;

Submission 26, p 5; Submission 36, City of Newcastle, p 6; Submission 24, Mid North Coast Joint Organisation, p 7;

Submission 43, Institute of Public Works Engineering Australasia (IPWEA) NSW & ACT, p 5; Submission 35, Local

Government NSW, p 20; Submission 47, pp 6-10; Submission 14, p 4-5; Submission 27, Australian Red Cross, p 9.

321 Submission 50, NSW Government, p 13; Graham Kennett, Executive Director, Reconstruction, NSW

Reconstruction Authority, Transcript of evidence, 20 February 2026, p 35.

322 National Emergency Management Agency (NEMA), Disaster Recovery Funding Arrangements, last updated 2

January 2026, accessed 30 March 2026.