2024-25 Budget: Will Disaster Relief and Preparedness Measures Help Small Businesses?
The 2024-25 Australian Budget promises substantial support for disaster relief and preparedness.
But will the proposed measures truly benefit small businesses?
Let’s break down the key initiatives and their potential impact.
National Emergency Management Agency (NEMA) Funding
The budget allocates $236 million over four years to support disaster recovery and resilience initiatives. This translates to $59 million per year.
With approximately 2.3 million small businesses in Australia, this equates to about $25.65 per business annually.
Given the historical cost of natural disasters in Australia, estimated at $18.2 billion annually by the Australian Business Roundtable, this allocation appears insufficient. Effective disaster recovery requires substantial funding beyond what is currently provided.
Disaster Recovery Funding Arrangements (DRFA)
The budget includes $1.4 billion over four years for the Disaster Recovery Funding Arrangements.
This funding translates to $350 million per year, or approximately $152.17 per small business annually.
While this is more substantial, it still falls short of the historical costs associated with natural disasters. The DRFA aims to provide immediate recovery assistance, but long-term resilience building needs more robust support.
National Bushfire Recovery Fund
The budget allocates $200 million over two years to the National Bushfire Recovery Fund.
This amounts to $100 million per year, or roughly $43.48 per small business annually.
This funding is crucial for bushfire recovery, given the frequency and severity of bushfires in Australia. However, the amount may not be sufficient to cover the extensive damage and loss incurred by small businesses in bushfire-prone areas.
Emergency Response Fund (ERF)
The Emergency Response Fund is set to provide up to $150 million annually for natural disaster recovery and resilience projects.
This translates to about $65.22 per small business per year.
While the ERF provides flexible funding for various disaster-related projects, the allocation needs to be significantly higher to meet comprehensive disaster preparedness and resilience needs.
Local Economic Recovery and Resilience Projects
The budget includes $600 million over four years for local economic recovery and resilience projects.
This funding equates to $150 million per year, or approximately $65.22 per small business annually.
Local recovery and resilience projects are essential, but the funding per business is limited given the scale and frequency of natural disasters.
Community Recovery and Resilience
The budget allocates $100 million over two years to support community recovery and resilience initiatives.
This amounts to $50 million per year, or roughly $21.74 per small business annually.
Community-level initiatives are critical, but the per-business allocation suggests limited impact. Greater investment in community resilience is required to effectively support small businesses in disaster-prone areas.
Historical Context and Forward Spending Impact
Australia’s natural disasters cost the economy an estimated $18.2 billion annually.
The forward spending allocations in the 2024-25 budget fall significantly short of this figure. The per-business allocations derived from the budget appear minimal when compared to the actual costs incurred during disaster events.
The 2024-25 Australian Budget introduces several measures aimed at enhancing disaster relief and preparedness for small businesses. However, the analysis of forward estimates reveals significant challenges in terms of the adequacy of funding relative to the historical costs of natural disasters.
While the initiatives provide some level of support, more comprehensive and sustained strategies are needed to effectively support small businesses in disaster preparedness and recovery.
Continuous investment and adaptive strategies are essential to ensure these measures achieve their intended outcomes and provide meaningful support to small businesses affected by natural disasters.
