What Are Mayoral Relief Funds, How Do They Work, And Are They Fit For Purpose?

Sunday, 7 July 2024, 3:41 pm
Article: RNZ

Katie Kenny, Digital Explainer Editor

05 July 2024

After natural disasters, councils in affected areas often set up mayoral relief funds. After Cyclone Gabrielle, for example, these funds raised millions of dollars, later paid out in thousands of grants.

Last week, heavy rain on the East Coast led to flooding that damaged nearly 500 homes, with more than 100 rendered uninhabitable.

Minister for Emergency Management and Recovery Mark Mitchell called the scale of the floods "catastrophic". It's been reported the damage could top $40 million.

Wairoa Mayor Craig Little said the flooding was "devastating", and the community still hadn't recovered from Cyclone Gabrielle.

"This flooding event took place on the southern side of town closer to the Wairoa River mouth, as opposed to the Cyclone Gabrielle flooding 16 months ago which affected the northern side of town when 350 homes flooded, and 120 businesses were impacted."

The government would contribute $300,000 to the mayoral relief funds in Hastings, Wairoa and Tairāwhiti, the minister announced. On Wednesday, he promised a further $500,000 to Wairoa.

The money would be spent on "immediate and pressing needs", including the clean up of sections, replacing clothes and bedding, and the hire and purchase of drying and dehumidifying equipment.

What are mayoral relief funds?

Local Government Minister Simeon Brown said mayoral relief funds are a "simple means to administer government contributions and donations from the public".

Set up after a natural disaster and administered by local authorities, they provide one-off financial support to affected individuals, families, community groups and marae.

In various forms, mayoral funds have been around for a long time. For example, Christchurch City Council's Mayoral Welfare Fund was established in the late-1800s - then called the Mayor's Coal and Blanket Fund. In the early days, people received a bag of coal or some wood or blankets.

"Relief funds are not a replacement for insurance and costs covered by other funding sources," Minister Mitchell said in a statement sent to RNZ. "They supplement support that may be available from other agencies, such as the Ministry of Social Development and Ministry for Primary Industries."

Funds in action

Following Cyclone Gabrielle in February, 2023, mayoral relief funds were set up for Northland, Auckland, Tairāwhiti, Thames-Coromandel, Hawke's Bay, Tararua, Wairarapa, Taranaki and Taupō regions.

Corporates, organisations, and members of the public donated to affected communities via the funds. Most of the money was distributed to the community through grant applications.

A fortnight earlier, at the end of January, funds had been set up after devastating flooding in Auckland and Northland. Demand outstripped supply. The Auckland Council Emergency Relief Fund raised close to $4 million, but applications totaled more than $20m.

The most requested support was towards items such as bedding, food, home appliances and furniture, with the average grant being about $1100.

Other funds

The government, through the National Emergency Management Agency (NEMA), can contribute to mayoral relief funds.

But NEMA is also in charge of reimbursing 100 percent of the costs incurred by councils to meet the basic welfare needs of people displaced by an emergency, and 60 percent of the costs incurred by councils to carry out certain response activates and repair council-owned essential infrastructure.

And, if necessary, the government can develop other, bespoke funding arrangements.

A range of other government agencies will also pitch in during emergency response and recovery. There are Work and Income civil defence payments, Inland Revenue tax relief measures, and Te Puni Kōkiri, the Ministry for Pacific Peoples and the Ministry for Ethnic Communities work with leaders, communities, and organisations to support affected groups.

The New Zealand Transport Agency covers emergency road maintenance work, and, depending on the event, further assistance can be unlocked from the Ministry of Social Development, Ministry for Primary Industries, and the Ministry of Business, Innovation and Employment, and other organisations.

Contributions

Mayoral relief funds are generally made up of government contributions and public donations.

The Minister for Emergency Management, together with the Prime Minister or Minister of Finance, can authorise contributions of up to $100,000 per event, per fund. Contributions above that require Cabinet approval.

"Government lump sum contributions to mayoral relief funds are a discretionary and well-established practice," Minister Mitchell said. "This is an important mechanism for early and rapid mobilisation of financial assistance to a local authority in the wake of an emergency event.

"They are intended to help fill gaps quickly where an immediate need exists."

Fit for purpose

Local Government New Zealand President Sam Broughton said local councils played a leading role in an immediate emergency response.

"Mayoral relief funds are a simple way of collecting donations and getting support to where it is needed most. They give mayors the autonomy to get money out the door quickly."

But some regions are innovating.

In June, Taranaki councils combined with a local philanthropic foundation to launch a new fund, the Taranaki Regional Disaster Relief Fund. The fund was set up to provide a single contact for donations and local coordination for efficient allocation to those most in need after an event.

Taranaki Foundation chief executive Josh Hickford told RNZ compared to traditional mayoral funds, the new fund aims to provide a better experience for donors.

"We're a charity, and we specialise in raising donor funds."

The professionally-managed fund was "always on", and welcomed donations from individuals, families, businesses, and other organisations.

In the event of a natural disaster or "acute situation", "we'd be able to pivot the fund, build communications quickly, and [the money] is sitting there, good to go", Hickford said.

Minister Mitchell told RNZ he welcomed Taranaki's streamlined approach.

"Having arrangements like this in place ahead of time will help reduce the administrative burden on councils and community organisations when an emergency does happen and ensure funds can get to where they are needed are quickly as possible."

© Scoop Media

RNZ

New Zealand's public broadcaster, providing comprehensive NZ news and current affairs, specialist audio features and documentaries.

Radio New Zealand is a Crown entity established under the Radio New Zealand Act 1995. Radio New Zealand News are vital elements in our programming, providing impartial news and information to New Zealanders every day. Radio New Zealand (RNZ) provides listeners with exciting and independent radio programmes in accordance with the Radio New Zealand Charter.

Contact RNZ

• Website - www.radionz.co.nz
• Twitter - @rnz_news
• Facebook
• Link - Contact RNZ