20 February 2026
Delays in disaster recovery funding leave councils in financial peril
LGNSW President Mayor Darcy Byrne gave evidence today to a Parliamentary Inquiry into the operations of the NSW Reconstruction Authority detailing the urgent need for disaster recovery payments to be expedited for impacted councils.
With the exponential increase in disaster costs for local communities across NSW in recent years, there are many local councils and communities that will face financial crises if overdue funds don’t flow urgently.
Mayor Byrne highlighted the need for a more streamlined payment of claims to councils and a greater investment in long-term resilience to avoid the impacts of disasters in the first place.
“The massive increase in floods, storms and fires across NSW has devastated many local councils and their communities,” Mayor Byrne said. “While the Reconstruction Authority is improving, the system for processing claims is inadequate with payments totalling hundreds of millions of dollars overdue to councils who are struggling with recovery.
“In Minister Saffin, regional communities have a proven champion who is fighting to fix this broken system and the need of these communities is urgent and cannot be ignored.”
Mayor Byrne pointed to recent examples of MidCoast Council and Kempsey Shire Council, which are still awaiting the processing of claims totalling tens of millions of dollars each in the wake of the flooding events of May 2025.
“In the MidCoast Council area, the floods had an impact of $226.5 million on council transport and infrastructure. To date, the council has spent $43 million on emergency and immediate reconstruction works on its transport network and has only received $6.1 million from the NSW Reconstruction Authority,” Mayor Byrne said.
“In the nearby council area of Kempsey, there was a $115 million impact, and that council has only received $5.7 million in funding. As we approach the one year anniversary of these devastating floods, it’s time recovery funding is paid in full.
“We know the local government sector is facing some real challenges with financial sustainability – particularly in rural, regional and remote communities. Having these unpaid claims on the books threatens the financial viability of these severely impacted councils.
“Too often we’re seeing claims for funding getting bogged down in red tape – leaving these councils out of pocket – often by millions of dollars for months if not years on end.
“This is grossly unfair – with councils facing a financial crisis that is absolutely not of their making. The harm from natural disasters is being compounded by bureaucratic delays.”
LGNSW is calling for immediate improvements to funding, coordination and resilience planning to protect communities now and into the future.
“We are calling for greater transparency from the NSW Reconstruction Authority in order to drive improvement. As a starting point, we want them to transparently publish data clearly showing the number of claims received, how many have been approved and paid and also detail the decision making and processing timelines.”
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