PRIME MINISTER
FOR MEDIA 29 DECEMBER 1989
Following the visit to Newcastle yesterday by the Prime
Minister and the Acting Prime Minister, Mr Lionel Bowen to
assess the situation following the earthquake, the Acting
Prime Minister announced today arrangements for Commonwealth
assistance, including financial assistance, to Newcastle.
Mr Bowen noted that the Natural Disasters Organisation ( NDO)
had worked quickly and effectively with the State and local
authorities in Newcastle in the immediate aftermath of the
earthquake and that all requests made to the NDO had been
met. He said that the Commonwealth Government Counter Disaster
Task Force ( CDTF) met this afternoon to take stock of the
situation in Newcastle and to consider future arrangements.
The CDTF is chaired by a senior official of the Department
of the Prime Minister and Cabinet and brings together a wide
range of Commonwealth Departments involved in responding to
a natural disaster. It provides the connecting link between
the NDO and the Government in the immediate emergency phase
and a mechanism for co-ordination of assistance for
rehabilitation. Mr Bowen said that the Commonwealth Government fully
recognised the need for longer term assistance in the
rehabilitation of Newcastle and pledged that the
Commonwealth would play its part. Financial assistance
would be provided under the terms of the Commonwealth's
Natural Disaster Relief Arrangements ( NDRA) program.
Details of these arrangements are set out in the attachment.
These arrangements provide for Commonwealth assistance in
support of State grants on eligible measures for the relief
-o f-personal -hard ship -and -distress. The Commonwealth will
meet at least fifty per cent of New South Wales' outlays on
personal hardship and distress. Other measures eligible for
assistance under the NDRA include concessional loans to
small businesses, to needy persons and to voluntary
non-profit bodies. In addition there is provision for
assistance in the restoration of public assets.
Mr Bowen also announced that the Commonwealth Government is
prepared to match a New South Wales State government
contribution up to $ 250,000 to the Relief Fund established
by the Lord Mayor of Newcastle. Moreover Mr Bowen said
that donations of $ 2 or more to such a fund for the relief
of persons affected by the earthquake would be tax
deductible. Precise arrangements for the Fund will be the
subject of further. discussion.
Mr Bowen said that special arrangements would be made to
ensure that social security benefits, pensions and family
payments would continue to reach recipients. He also noted
that there was provision for persons severely affected by a
natural disaster to receive special benefits.
The Prime Minister will be meeting the Premier of New South
Wales, Mr Greiner, next week to discuss the situation in
Newcastle.
DETAILS OF THE COMMONWEALTH'S NATURAL DISASTER RELIEF
ARRANGEMENTS 1. Commonwealth assistance for natural disaster relief is
currently incorporated within the Natural Disaster
Relief Arrangements ( NDRA) program which is
administered by the Department of Finance.
2. Under the NDRA, the Commonwealth financially assists
the States and the Territories to meet the
unpredictable, and sometimes large costs of providing
natural--disaster--reiief and--restoration. The States
have the primary responsibility under the Constitution
for the administration, provision and financing of
natural disaster relief.
3. Disasters currently covered by the arrangements are
bushfires, cyclones, earthquakes, floods and storms.
4. The terms and conditions of assistance and the
administrative arrangements under the present NDRA
framework, effective from 1 July 1985, are set out in
a document, signed by the Minister for Finance in July
each year to apply for that financial year. The
document is to be updated and revised each year.
Under the arrangements, the Commonwealth reimburses at
least 50% of State outlays on eligible measures for
the relief of personal hardship and distress. In
respect of other eligible relief and restoration
measures, the Commonwealth provides financial
assistance when a State's total outlays on those
measures in a financial year exceeds its assessed
financial capacity, as represented by an annual base
amount.
6. The base amounts are set at 0.225% of State annual
general government revenue and grants two years
earlier ( the latest available data). Commonwealth
assistance is on a for basis in respect of outlays
by a State above its base amount for amounts up to
above the base amount and $ 3 Commonwealth to $ 1 State
thereafter.
7. Under the NDRA, the States have responsibility for
selecting, within agreed guidelines, the specific
measures to be eligible for assistance. The
arrangements provide for the Commonwealth to be
informed of all relief measures and for the Minister
for Finance to decide, in consultation with the
relevant State Minis-ter,.. on. the eligibility of a
relief measure which might be considered inconsistent
with the guidelines.
8. Under the current NDRA, it is the States which advise
on the occurrence of eligible natural disasters andthe
introduction and withdrawal of eligible relief
measures.
9. In adopting eligible relief measures, a State is
required to broadly observe the following guidelines:
Assistance is not to supplant,.. or . operate as a
disincentive for, self-help by way of either
commercial insurance or appropriate strategies
of disaster mitigation.
( ii) So far as practicable, assistance is to be
designed to achieve an efficient allocation of
resources.
( iii) Other than for personal hardship relief
measures, concessional-interest loans are
generally to be preferred to non-repayable
grants.
Categories of State relief measures which are
currently eligible for Commonwealth assistance under
the NDRA are:
grants for relief of personal hardship and
distress, such as the provision of emergency
food, clothing and accommodation;
concessional loans to farmers or operators of
small businesses, whose assets ( including fodder)
have been significantly damaged and who have no
reasonable access to commercial finance but who
have reasonable prospects of long term viability;
concessional loans to needy persons or voluntary
non-profit bodies whose assets have been
significantly damaged and who have no reasonable
access to commercial finance;
grants for the restoration of essential public
assets, owned by eligible public undertakings;
and
S certain subsidies.
For further contact: Mr Darrell Allen 852 934
632 250