The Review of the Insurance Arrangements of States and Territories under the Natural Disaster Relief and Recovery Arrangements (NDRRA) Determination 2011, conducted by the Department of Finance and Deregulation, was released today.
Attorney-General and Minister for Emergency Management Nicola Roxon said the report shows that more can be done to ensure States and Territories have adequate financial arrangements in place to respond to natural disasters.
While the insurance arrangements that States and Territories have in place to fund post-disaster reconstruction are generally sufficient, the report finds that improvements can be made and further work is required in respect of road assets, Ms Roxon said.
Ensuring States and Territories are disaster-ready is a priority for the Commonwealth and we will work with them to implement the recommendations from this report.
The review found that, aside from the Northern Territory and Tasmania, all States and Territories have insurance arrangements for their non-road assets that are appropriate, cost-effective and which minimised the financial exposure of taxpayers at both levels of Government.
The review also found that, aside from the Australian Capital Territory and Victoria, road assets tend to be uninsured.
The report recommends:

• The Commonwealth consider updating the NDRRA Determination to include compliance with the updated Financial Guidelines as a condition of assistance;
• The Commonwealth consider providing Guidelines to the States on the interpretation and application of the definition of essential public assets; and
• That the Northern Territory and Tasmania adopt an evidence-based assessment for the insurance of State-owned assets and submit a further independent assessment to the Commonwealth for review.

Minister for Finance and Deregulation Penny Wong said it is the responsibility of States and Territories to have appropriate insurance of their assets in order to receive the full NDRRA funding available in the event of a natural disaster.
Under the NDRRA, States and Territories must appropriately assess their risks and insurance options on a cost-benefit basis to minimise the financial exposure borne by taxpayers as a result of natural disasters, Ms Wong said.
Nearly $3 billion was provided to the States and Territories in 2011-2012 under the NDRRA.
The report is available at http://www.finance.gov.au/publications/review-natural-disaster-relief-recovery-arrangements/