Review of the operations of the NSW Reconstruction Authority

Review of the operations of the NSW Reconstruction Authority

Grants and funding arrangements

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public space assets were damaged and that reconstruction and betterment

work would cost $65 million. It also estimated that the cost of resilience and

betterment work to prevent future disaster-related damage would cost $265

million.398

MidCoast Council told the Committee it has approximately $76,856,850 in

outstanding DRFA claims.399

As of 15 February 2026, only $6.1 million had been reimbursed to the council

under DRFA. As of 1 March 2026, this figure increased to $15,320,853. This

includes the full amounts claimed for waste cleanup and waivered feeds during

clean up and water, and part of the full claim amounts for work on roads and

public buildings and spaces.400 However, this still leaves the Council

significantly out of pocket roughly nine months following the event.

The cost of water and sewer infrastructure restoration, totalling approximately

$7.5 million, is not eligible for reimbursement under DRFA and is ultimately

passed on to the community.401

5.65 The current retrospective reimbursement approach creates cash-flow challenges

and financial risks, especially for smaller councils.402 This makes the current

model a threat to the financial viability of many regional and rural councils.403

Councils with limited rate bases are forced to divert funding away from essential

services and future resilience work to pay for recovery.404 Recovery costs that are

not reimbursed to councils through DRFA are ultimately passed on to the

community through higher rates or cuts to services.

405

5.66 Port Macquarie Hastings Council noted a lack of clarity about how funding spent

on recovery would be reimbursed to the Council following the May 2025 East

Coast severe weather event. In addition to budget impacts, this has caused issues

with managing community expectations regarding recovery.406 Councils also

commented that the strict deadlines to complete eligible works for

reimbursement were unrealistic given the scale of damage from the May 2025

East Coast weather event.

407

5.67 The financial pressures of the reimbursement model are further compounded by

the cumulative impact of previous natural disasters and more frequent and

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

399 Hunter Joint Organisation, Answers to questions on notice, 9 March 2026, p 2.

400 Hunter Joint Organisation, Answers to questions on notice, 9 March 2026, p 5.

401 Hunter Joint Organisation, Answers to questions on notice, 9 March 2026, p 5; Adrian Panuccio, Transcript of

evidence, 17 February 2026, p 3.

402 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.

403 Darcy Byrne, Transcript of evidence, 20 February 2026, p 13; Submission 39, p 3; Adrian Panuccio, Transcript of

evidence, 17 February 2026, p 7.

404 Submission 39, p 3.

405 Submission 26, p 4; Adrian Panuccio, Transcript of evidence, 17 February 2026, p 3.

406 Submission 26, p 1.

407 Submission 24, p 7.