The Prime Minister today welcomed Senator Xenophon's support for the Government's floods rebuilding package, including the flood levy.
This now means the floods levy will pass the Parliament, allowing us to get on with the critical job of rebuilding Australia after the devastating summer floods.
As a result of discussions with Senator Xenophon, Natural Disaster Relief and Recovery Arrangements (NDRRA) for future disasters will be strengthened to help ensure state and territory governments have adequate capital or insurance to fund the replacement and restoration of essential public infrastructure. These new arrangements will not apply to disasters that occurred this past summer.
Under the new arrangements:
* States and territories will not be eligible to receive the maximum level of Commonwealth support unless they undergo regular assessments of their insurance arrangements by an independent specialist, such as the state Auditor-General.
* These reports will be assessed by the Department of Finance.
* They will then be considered by the Attorney-General, who may make recommendations to the states or territories in regards to their insurance or mitigation strategies.
* If a state or territory has failed to take appropriate action within a reasonable time, then the amount that state or territory would be reimbursed under the NDRRA may be reduced.
States and territories have a responsibility to taxpayers to put in place cost effective insurance arrangements - for example through commercial insurance and reinsurance or other mechanisms such as self-insurance.
These new arrangements will reinforce that responsibility.
The Attorney-General will write to his counterparts in the states and territories about the new requirements today.
In addition, the Commonwealth Government's responsibilities under the NDRRA will be audited by the Auditor-General every three years.
The Gillard Labor Government firmly believes the Commonwealth should continue to provide financial assistance to states and territories through the NDRRA to ensure disaster affected communities receive the support and assistance they need to rebuild.
However, these Commonwealth-State arrangements are not designed to supplant, or operate as a disincentive for, insurance or disaster mitigation.
The Natural Disaster Relief and Recovery Arrangements have been in place under successive governments for more than 30 years.
The Gillard Labor Government is committed to ensuring they remain an effective way of helping communities around Australia recover from natural disasters.
Most importantly, the Gillard Labor Government is determined to rebuild Australia after the floods and other natural disasters we have seen this year.
The Government thanks Senators Fielding and Xenophon, as well as Tony Crook, Bob Katter, Andrew Wilkie and Adam Bandt for their support of this important legislation.