The Morrison government will use next week’s budget to establish a national recovery and resilience agency and create a new climate service to help manage the risk of natural disasters.
The government will allocate $600m to the agency to fund resilience projects such as bushfire and cyclone-proofing houses, building levees for flood control, and improving the resilience of telecommunications and essential supplies.
Senior government figures, including Scott Morrison and the deputy prime minister, Michael McCormack, are on the road in regional Queensland ahead of next Tuesday’s economic statement in Canberra.
The Coalition on Wednesday will also foreshadow a new round of the Building Better Regions Fund with a budget of $250m, as well as funding for business cases for water infrastructure projects in Victoria, New South Wales, South Australia and Tasmania to the tune of $22.3m.
In the six months before the last federal election, the government awarded more than $630m worth of grants from programs like the better regions fund, which faced significant criticism for its distribution of cash to Coalition electorates.
Ahead of what is shaping up to be a big-spending budget, with initiatives in mental health, aged care, and childcare, the Reserve Bank of Australia revised its economic growth projections upwards on Tuesday. The central bank is now predicting the Australian economy will grow by 4.75% in 2021 and 3.5% in 2022.
The reserve bank cited a pickup in business investment and household spending “supported by the strengthening in balance sheets over the past year” as reasons for the more optimistic growth forecast. The bank predicts Australia’s unemployment rate will hit 5% by the end of 2021 and 4.5% by the end of 2022.
While forecasting a strengthening in the economy, the RBA kept interest rates on hold, explaining it will not lift the cash rate until “actual inflation is sustainably within the 2 to 3% target range” which is “unlikely to be until 2024 at the earliest”.
In a recent speech framing the objectives of next Tuesday’s budget, the treasurer, Josh Frydenberg, said the government would avoid austerity budgeting until the economic recovery from the first recession in 30 years is secured. The government will embark on fiscal repair once unemployment has dropped below 4%.
The government says the recovery and resilience agency, which is part of the response to the royal commission that followed the catastrophic bushfires in the summer of 2019-20, will oversee the bushfire recovery, including the $2bn fund the government has already allocated, and drought and flood responses.
The agency will be led by Shane Stone, the former chief minister of the Northern Territory and federal president of the Liberal party during the Howard era, who currently chairs the National Drought and North Queensland Flood Response and Recovery Agency and the Advisory Board to the National Drought and North Queensland Flood Response and Recovery Agency.
The government says from July 2021, the agency will incorporate the disaster risk reduction and recovery functions from the Department of Home Affairs, and absorb rural financial counsellors currently managed by the Department of Agriculture, Water and the Environment.
In a statement, the government said it would upgrade the national situation room in Emergency Management Australia, and create the new climate service within the environment department “to generate new information and insights that will better inform policy development, program design and better understand future climate and natural disaster risks”.
The environment minister, Sussan Ley, said Australia needed to be prepared for more extreme weather events due to climate change. “The collaboration between the Bureau of Meteorology, the CSIRO, the Australian Bureau of Statistics and Geoscience Australia is critical to delivering rich insights drawn from an expanded range of data sources,” the minister said.
Morrison says the disaster agency is required because “in the past two years Australians have faced floods, bushfires, cyclones, drought and now the Covid-19 pandemic and I’m determined to keep Australians safe and support the recovery of communities and regions right across Australia”.
McCormack will use a speech in Queensland on Wednesday to declare regional and rural communities are at the heart of the government’s economic recovery plan after the pandemic.
According to speech extracts, McCormack will say: “This extra money for a sixth round of the Building Better Regions Fund is a $250m vote of confidence in the future of our regions”.