March 09, 2022



SUBJECTS: Morrison Government raking in interest from its $5 billion Emergency Response Fund instead of protecting people from floods; Community crying out for disaster mitigation investment; Labor’s plan to invest up to $200 million per year on disaster mitigation; country to have a sensitive debate about rebuilding, unhelpful for government ministers to just say ‘people should look at the positives’.

NICK RHEINBERGER, HOST: We’ve been talking about it with Senator Murray Watt who has been forensically examining this fund in Senate Estimates for months. Mostly in terms of fire resilience, but of course it’s about floods as well. Senator Murray Watt is back on the line with us here at ABC Illawarra. Good morning.


RHEINBERGER: Where could this money be spent right now if we were able to access it?

WATT: Well right now, Nick, the Prime Minister can use up to $150 million this financial year alone for disaster recovery. But the other issue is what this funding could have been used for over the last three years. And as you and I have spoken about several times now, the government for the last three years has been able to spend up to $50 million per year on disaster mitigation projects. Whether that be flood levees, drainage improvements, bushfire resilience, cyclone shelters. And after three years, as we've discussed before, they still have not even started building a single one of these projects, let alone completed them. So I think that's the big question that the Prime Minister has when he arrives in Lismore today, is ‘why has he been sitting on this fund, not using it to put in place the kind of mitigation measures that could protect people?’ Why instead has he just used this fund to rack up interest to support his own budget bottom line? This fund has now grown to nearly $5 billion because it's earned the government over $800 million, hasn't spent a cent on disaster recovery in three years, and hasn't even started building a single disaster mitigation project. So he can access those funds immediately for disaster recovery, and he can continue using them to actually get some shovels in the ground to protect people with mitigation projects.

RHEINBERGER: If it’s earned over $800 million, why are we limited to spending only $50 million a year on mitigation and $150 million on immediate assistance? We're not even touching the principal with that sort of limit, are we?

WATT: No, that's right. I mean, the way the fund was first set up through legislation was that, basically the idea is, that the principal is invested and all or some of the proceeds can be used each year for these purposes. In fact, when the government first proposed these funds, they didn't want to use any of it for disaster mitigation. As a condition of Labor's support, we insisted on them at least providing some money towards mitigation and $50 million was the most we could get them to commit. So the legislation is clear about what the cap is, and the reason it's earned so much money is that of course the stock market has been booming over the last couple of years and it's earned even more than they expected. So there's lots of money there available. You know, it's not as if we have to go and raid the budget to find new funds; they're sitting there waiting to be used and they have been for three years.

RHEINBERGER: How does it improve the budget bottom line, as you said it did?

WATT: Well this fund continues to accrue that interest and it means that the government has more money at its disposal to spend on disaster recovery, and means that the government doesn't then have to go and raid the budget to pay for disaster recovery in the way it normally does. After every natural disaster, the Commonwealth and the States usually come to an agreement about who pays for what. That money usually comes off the budget bottom line, but by having this fund available, it means that in extreme circumstances, the government can make use of these funds, rather than having to cut back on other things to pay for them. And so that's the issue, is that the funds are there, it's a budget protection measure as much as anything else, and if we're not prepared to use these funds for the kind of disasters we've seen in Australia over the last couple of years, when are we ever going to use them?

RHEINBERGER: Well, you could argue about whether this phrase of a ‘one in a thousand year flood’ is useful at all when it seems to happen every 10 or 20 years. But if we use that as an example of the seriousness of the flooding that we have seen, surely a ‘once in a lifetime’ seems like a reasonable time to dip into this fund to its maximum capacity? Would the Labor Party change the legislation to enable that to happen?

WATT: I agree with you, Nick. I think that the disasters that we've seen over the last couple of years have been significant enough to make use of these funds. And that's really, I suppose, if we're talking about disaster recovery. The mitigation funding is always needed. There is a massive shortage of investment in disaster mitigation in this country and if we actually use these funds to do so, not only would we save lives and save properties, but we'd save billions of dollars that we all pay with disasters every year to repair things.

In terms of what Labor would do, in January this year, well before these floods, Anthony Albanese announced that if we're elected, we will revamp this fund and turn it into a dedicated disaster mitigation fund. So we would actually convert it, rather than being a mixture of recovery and mitigation that is actually doing nothing, what we would do is spend up to $200 million a year on flood levees, drainage improvements, cyclone shelters, bushfire evacuation centres, telecommunications improvements, the kinds of things that do keep people safe. Every person in the emergency management community whether it be insurers, local governments, the charities, they're all crying out for this level of investment. In fact, the government's own Productivity Commission a few years ago did a report which said we need to see disaster mitigation investment from the Federal Government of $200 million a year, preferably matched by states, territories and local governments. So this is what everyone who knows anything about disasters is saying. The only people who don't seem to have got the message is the Morrison Government.

RHEINBERGER: Even if we spent a huge amount of money in somewhere like Lismore on mitigation, is it ever going to be enough? Is the answer, not so much to build up higher levees and trying to protect people from these floods, or is it something that we have to look at abandoning? And I know this is so difficult, I mean, there's been various ideas, you know, can the government buy back the land and give people a chance to start again? Is that an appropriate use for these funds?

WATT: I think that on a technical basis these funds could be used for that, there's no doubt about that, there's very broad discretion about what these funds are used for. And I think this is an important debate that we need to have as a country as we do face more frequent and more intense natural disasters in the future. I think that the debate has to be conducted sensitively, because I can tell you, the people that I've been meeting in Lismore over the last three days are extremely traumatised by what they went through and it's not helpful to have government ministers out there saying things like ‘people should look at the positives’ or you know, other government officials basically blaming people for where they choose to live. So I think it is an important debate that we need to have. And look, I think it's probably, there's different solutions for different places. After the 2011 floods that happened through South East Queensland, and we lost lots of lives in the Lockyer Valley in towns there, there was a town called Grantham where several people lost their lives and that town was effectively relocated. That might work for a smaller town but a place like Lismore is a big town, it’s a major economic hub and it might be there that it's more a matter of mitigation investment, rather than moving 40,000 people and all the business community as well.

RHEINBERGER: All right, good to talk to you today. Thank you very much.