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​On 13 February 2017, this widespread flooding event was proclaimed an eligible disaster under the Western Australia Natural Disaster Relief and Recovery Arrangements (WANDRRA).

Flooding in Western Australia - January and February 2017

23 May 2017

​Day labour exemption: local governments to be fully reimbursed 

Overheads ​​

The Commonwealth Government has confirmed that they will accept Western Australia’s proposal to allow local governments to include overhead costs when using their own resources to undertake recovery works following a proclaimed disaster event. 

This is excellent news for local governments as it enables them to be fully reimbursed when using their own labour for recovery works. 

The previous Day Labour Exemption (9 May 2017) did not allow local governments to be fully reimbursed when using their own labour, as only salaries could be reimbursed. Now overheads, such as vehicle expenses, insurance and sick and holiday pay are covered. 

It is important to note: 

  • This temporary exemption can only be utilised for events occurring since January 2017. Repairs to damage caused by prior events should already be well underway, given the damage is to an essential public asset. Main Roads and OEM will, however, review specific local government requests for prior events on a case by case basis.

  • An important requirement for this exemption is that all local governments demonstrate the cost-effectiveness of using their own labour, plant and equipment, compared to contractors.

  • Local governments must claim overheads in accordance with the local government legislation and the Australian Accounting Standards. 

Chang​es to the Temporary Framework 

Since the release of the Temporary Exemption framework and supporting templates, the OEM has worked with users to review the documents and further streamline the process. The Supporting Guidelines and Templates on the OEM website have been updated. Guidance on the specific overheads can be found in the WANDRRA Guidelines. If you have downloaded previous versions, please update your documents. 

In the early development of the framework it was initially proposed that local governments would receive a 40% up-front payment once the estimate to repair damaged assets was agreed. Once 40% of work was complete an additional 40% would be provided, with a final 20% payment made upon completion of the works. This was referred to as the 40:40:20 payment. 

This part of the framework cannot be implemented at this stage as the magnitude of the claims for up-front payments presents a significant issue and requires a comprehensive review. In addition, it was only intended for local governments’ day labour and not work undertaken by contractors and as a result it creates an uneven playing field between contractors and local governments. 

However, recognising the challenges for local governments in managing their cash flows, it has been agreed that, if required, local governments can make more frequent claims for the work done. This may be a monthly claim if it assists in the management of their cash flow. Main Roads WA and WANDRRA have also committed to processing payments to local governments as quickly as possible. 

The new Natural Disaster Relief and Recovery Arrangements (NDRRA) are proposed to start in July 2018. Until then, the temporary exemption for labour, plant and equipment applies. This will provide an opportunity for Western Australia to test elements of the new system and provide feedback to the Commonwealth on any issues that are identified. Main Roads WA, WALGA and OEM will also meet regularly to monitor and review this system. 

State Recovery Coordinator visits flood areas 

During recent weeks the State Recovery Coordinator Steve Joske has visited some of the most flood affected areas in WA. 

Accompanied by the OEM district advisors, Steve visited Lake Grace, Ravensthorpe and City of Swan. He met with a number of local government officers, discussed recovery issues and visited flood affected sites. 

Upon his return to Perth from his Lake Grace and Ravensthorpe visit, Steve said: 

“It was important to see first-hand the damage the flooding event has caused in Lake Grace and Ravensthorpe and to hear directly from CEOs, councillors, primary producers and community members about the effects of the flood on local business and community welfare."

“This has been the largest flooding event in WA. The catastrophic damage will take many months to recover from and cost millions of dollars.” 

“I was inspired by the determination of the local community to resume their everyday lives, work and business as soon as possible, while still recognising that the flooding had deeply affected families, businesses, community and industry.” 

“The OEM is working closely with local governments, various state government agencies and the Commonwealth Government to expedite the recovery measures for the flood affected communities across the State.”​

​​​Project Team for construction of temporary Phillips bridge.jpg

Image taken in late March of the project team for the construction of the temporary Phillips River bridge: Des Snook, Zac Smith, Francis Musso and Andrew Duffield.​ Image courtesy of Main Road​s WA.