Review of the operations of the NSW Reconstruction Authority

Review of the operations of the NSW Reconstruction Authority

Grants and funding arrangements

60

disasters, particularly for smaller local councils and more geographically

isolated councils.

Recommendation 21

That the NSW Reconstruction Authority continue to prioritise improvements to

streamline payment of Disaster Recovery Funding Arrangement funds to local

councils as a matter of urgency. The NSW Reconstruction Authority should have

funds readily available so that councils do not incur the extra financial burden

at a time when council assets are adversely impacted.

Finding 15

Many councils remain out of pocket for significant amounts of money, owed to

them through unpaid Disaster Recovery Funding Arrangements and other

recovery payments.

Recommendation 22

That the NSW Government work with the Australian Government to ensure all

monies still owed to councils for approved and completed Disaster Recovery

Funding Arrangements-funded works be paid immediately, so as to aid those

local government areas in their recovery and future resilience.

5.63 Under the current DRFA, local councils are required to pay for recovery upfront

and seek reimbursement for these costs afterwards.

392 The Committee

consistently heard that this approach leaves councils exposed to significant

unfunded expenses. 393

5.64 Local councils impacted by the May 2025 East Coast severe weather event and

other recent natural disasters still have significant outstanding reimbursement

claims.

394 For example, as of 15 February 2026, Kempsey Shire Council still have

$14 million in expected payments due from the Authority.395 Port Macquarie

Hastings Council has $6 million in costs that are pending payment.396 A case study

MidCoast Council's outstanding claims is included below.

Case Study: MidCoast Council

MidCoast Council estimated that recovery following the May 2025 East Coast

severe weather event would cost $226 million.397

As of 1 February 2026, the council had spent $43 million on emergency,

immediate rectification and restoration works. The Council estimated that 106

392 Submission 24, p 7.

393 Submission 24, p 7; Submission 26, p 1; Submission 19, pp 1, 4; Submission 35, p 23; Submission 18, p 4;

Submission 39, p 2; Adrian Panuccio, Transcript of evidence, 17 February 2026, pp 3, 7.

394 Hunter Joint Organisation, Answers to questions on notice, 9 March 2026, pp 2-7; Local Government NSW,

Answers to questions on notice, 12 March 2026, pp 1-3; Submission 26, p 1; Kempsey Shire Council, Answers to

questions on notice, 18 March 2026, pp 1-2; Port Macquarie Hastings Council, Answers to questions on notice, 26

March 2026, p 1.

395 Kempsey Shire Council, Answers to questions on notice, 18 March 2026, pp 1-2.

396 Port Macquarie Hastings Council, Answers to questions on notice, 26 March 2026, p 1.

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