Review of the operations of the NSW Reconstruction Authority

Review of the operations of the NSW Reconstruction Authority

Grants and funding arrangements

57

Water and sewerage infrastructure

5.47 The Committee heard that DRFA guidelines exclude certain critical assets to

communities, in particular water and sewerage infrastructure.365 Water and

sewer services are fundamental to public health, safety and liveability.366 As

natural disaster become more frequent and severe, excluding this infrastructure

from recovery funding will undermine councils' ability to maintain these

services.

367

5.48 Mr Darcy Byrne, Chief Executive, LGNSW, told the Committee that regional

councils are already operating at a deficit regarding water infrastructure and that

the lack of funding for water infrastructure is an existential problem for rural and

regional councils.

368

5.49 The Authority advised that water and sewer infrastructure are excluded because

of their classification as commercial activities.

369 Mr Graham Kennett, Executive

Director, NSW Reconstruction Authority, told the Committee that this is because

customers of water utilities are charged a fee that is greater than 50% of the

operating costs of the business.

370

5.50 Mr Kennett recognised that water and sewer are essential public assets, and that

there are broader affordability issues for local water utilities, especially across

regional NSW.

371 However, Mr Kennett said that he did not think DRFA would be

the mechanism to solve these broader affordability issues. Mr Kennett also said

that it was unlikely that DRFA would be reformed to include water and sewer

infrastructure as this would open the door for 'electricity, telecommunications

and other essential public assets' that are also funded by customers to be

covered.

372

5.51 Mr Kennett said that other areas of the NSW Government, including the Minister

for Water, are working on reforms regarding water and sewer infrastructure.

373

Mr Andrew Graham, Chief Operating Officer, NSW Reconstruction Authority, said

that the Authority is 'involved with and constantly talking to the National

Emergency Management Agency (NEMA) about issues that should be addressed

in policy'. In the meantime, the Authority's focus has been on utilising the existing

provisions of the DRFA as best as it can.

374

365 Submission 33, pp 16-17; Submission 35, p 21; Anna Flack, Senior Project Coordinator, Hunter Joint Organisation,

Transcript of evidence, 17 February 2026, p 13.

366 Submission 33, p 17; Submission 35, pp 21-22; Anna Flack, Transcript of evidence, 17 February 2026, p 13; Adrian

Panuccio, Transcript of evidence, 17 February 2026, p 3.

367 Darcy Byrne, President, Local Government NSW, Transcript of evidence, 20 February 2026, p 14.

368 Darcy Byrne, Transcript of evidence, 20 February 2026, p 14.

369 Submission 33, p 17; David Reynolds, Transcript of evidence, 20 February 2026, p 14.

370 Graham Kennett, Transcript of evidence, 20 February 2026, p 33.

371 Graham Kennett, Transcript of evidence, 20 February 2026, p 33.

372 Graham Kennett, Transcript of evidence, 20 February 2026, pp 34-35.

373 Graham Kennett, Transcript of evidence, 20 February 2026, p 33.

374 Andrew Graham, Chief Operating Officer, NSW Reconstruction Authority, Transcript of evidence, 20 February

2026, p 33.