Australia's councils call for big polluters to fund safer, stronger communities

Climate Media Centre

Local government leaders from across Australia meeting in Canberra this week, are calling for a national Climate Compensation Fund, so councils can keep their communities safe and resilient in the face of worsening extreme weather due to climate pollution.

The motion, which asks the Federal Government to investigate ways the coal, oil and gas corporations could help fund disaster relief, mitigation and adaptation, was put forward by the City of Sydney and is backed by the Australian Local Government Association, which represents all councils.

Jess Miller, Deputy Lord Mayor of the City of Sydney, said: "Councils are increasingly feeling the unsustainable financial burden created by responding to more frequent and more severe climate impacts. From storms, flooding and mould, to sinkholes in our roads, to heat stress affecting our residents and the costs of adapting our cities to make them safe. The costs are mounting and something has to change."

Australia's 537 councils are responsible for maintaining a third of the nation's community infrastructure, valued at nearly half a trillion dollars, yet their revenue base is growing far more slowly than the climate costs they are being asked to absorb.

The insured costs of climate disasters are now twelve times higher than twenty years ago, while local government revenue has grown only three times over the same period.

The Climate Compensation Fund seeks to address this imbalance giving councils the resources to manage climate damage and help their communities thrive.

Between 2019 and 2023, more than 80 per cent of Australia's local councils faced climate disasters.

Nationally, fires, floods and cyclones cost Australia $38 billion per year, equivalent to $3,800 per household, predicted to rise to $73 billion by 2060.

Toby Heydon, Mayor of Mount Alexander Shire Council, said: "It's time for polluters to pay their fair share to clean up disasters they are responsible for, and to help ensure our communities are better prepared for the next one."

The motion calls on the Federal Government to establish a Parliamentary Inquiry into the adequacy of the 2025 National Adaptation Plan, create a dedicated funding stream for local governments that matches the scale of financial risks identified in the 2025 National Climate Risk Assessment, and identify taxes or levies on the coal, oil and gas industries aligned with the damage their products cause, to finance the fund.

City of Parramatta is the latest council to pass the motion in-house after a unanimous vote Monday.

Councillor Dr Judy Greenwood from City of Parramatta, said: "The council's unanimous support for this motion demonstrates that support for a more sustainable financial model for councils to manage accelerating costs of climate damage is an essential community need, not a partisan issue."

ALGA's National General Assembly is taking place in Canberra from 23–25 June 2026.

The motion will be voted on at the first motions session on Wednesday 24 June.

David Law, Councillor for Division 10 Sunshine Coast Council, said: "A Climate Compensation Fund would provide a fair and practical solution. By requiring major coal and gas corporations to contribute to the costs of climate damage, it would give councils access to a dedicated funding stream for recovery and resilience, and reduce the need for ongoing rate increases."

MEDIA CONTACT: Laura Corrigan, Media Advisor, Climate Media Centre – 0423 690 152 – [email protected]

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BACKGROUND

The Australian Local Government Association (ALGA) National General Assembly takes place 23–25 June 2026 in Canberra. The voting session for motions will be held on Wednesday 24 June at 3.00 pm.
City of Sydney Motion #92, National Climate Adaptation Funding and Accountability for Australian Cities, has been reviewed by the ALGA Board’s Motions Sub-Committee and deemed consistent with ALGA’s current national policy. It has been recommended to be voted en bloc.
The motion calls on the Federal Government to: establish a Parliamentary Inquiry into the adequacy of the 2025 National Adaptation Plan; create a National Climate Compensation Fund with a dedicated funding stream for local governments; and introduce a Climate Pollution Levy on coal, oil and gas corporations.
ALGA has called for $400 million per year in federal funding for local government climate adaptation and $900 million per year for disaster management capacity.
The insured costs of climate disasters have risen more than twelve times in twenty years, while local government revenue has grown only three times over the same period (Australia Institute, 2025).
Fires, floods and cyclones currently cost Australia $38 billion per year, equivalent to $3,800 per household, rising to $73 billion projected by 2060.
434 of Australia's 537 councils were impacted by climate disasters between 2019 and 2023.
Australia's councils are responsible for maintaining a third of the nation’s community infrastructure, valued at nearly half a trillion dollars, including 75 per cent of the nation’s roads (ALGA).
Local government taxation revenue accounted for about 3.38 per cent of the $593.2 billion in total revenues collected by all governments in 2020–21 (ALGA).
Federal and state governments provide approximately $14.9 billion annually in fossil fuel subsidies, more than 14 times the nation's $4.75 billion disaster response fund (Australia Institute, 2025).
Sunshine Coast Council's 2026–27 budget includes a 9.7 per cent rates increase and allocates $1.7 million for disaster management and resilience. The council is operating with a projected $7.6 million operating deficit in 2026–27 (Sunshine Coast Council budget, June 2026).
Coal, oil and gas corporations are responsible for three quarters of Australia's climate pollution.
Santos reported ten consecutive years of zero corporate tax payments to 2024–25, despite $47 billion in sales.
The Communities for Climate Compensation campaign is calling on the Federal Government to establish a National Climate Compensation Fund, financed through a levy on major coal, oil and gas corporations, to fund disaster recovery, infrastructure repair and community resilience.

FULL QUOTES

Jess Miller, Deputy Lord Mayor of the City of Sydney, NSW:

"Councils, including the City of Sydney, are increasingly feeling the unsustainable financial burden created by responding to more frequent and more severe climate impacts. From storms, flooding and mould, to sinkholes in our roads, to heat stress affecting our residents and the costs of adapting our cities to make them safe. The costs are mounting and something has to change.

"The 2025 National Adaptation Plan creates a mandate for councils to deliver adaptation and emergency management services on top of the frontline services we already provide. But the Government has failed to provide the funds necessary to deliver these critical services. It is an unfunded mandate that is eating away at council budgets and bottom lines."

Toby Heydon, Mayor of Mount Alexander Shire Council, Victoria:

"The fires that affected our communities earlier this year have had a large and ongoing impact for residents, the community as a whole and for the council. These devastating events take a massive toll on wellbeing, household finances and government budgets as we rebuild.

"As disasters become more intense and frequent, the costs will continue to mount, not just for us but for state and federal governments too. Mount Alexander Shire is just one of many councils calling for increased and more sustainable funding for communities to manage these crises. It’s why we supported the City of Sydney motion following our own unanimous council motion in March this year.

"It's time for polluters to pay their fair share to clean up disasters they are responsible for, and to help ensure our communities are better prepared for the next one."

David Law, Councillor for Division 10 Sunshine Coast Council, Queensland:

"The Sunshine Coast is not alone in facing substantial financial challenges in the wake of consecutive disasters due to extreme weather events. For example, three severe peak flooding disasters within 46 days in 2025 caused by extreme rainfall cost the council millions of dollars to protect our community and repair infrastructure.

"As a low-lying, coastal region with an extensive hinterland we face multiple hazards including inundation, coastal erosion, flooding and riverine flooding, land slip and bush fires. As these disasters become more frequent, the costs are becoming increasingly unsustainable.

"A Climate Compensation Fund would provide a fair and practical solution. By requiring major coal and gas corporations to contribute to the costs of climate damage, it would give councils access to a dedicated funding stream for recovery and resilience, and reduce the need for ongoing rate increases."

Dr Judy Greenwood, Councillor at City of Parramatta:

"The Parramatta Council has voted unanimously to support a Climate Compensation Fund paid for by a levy on polluters this week. As one of the most flood affected areas in Australia and one of the hottest parts of Sydney, our council and residents are vulnerable to the increasing costs of climate change.

"In 2019, our community sweltered through 47 days with temperatures over 35 degrees. We see it at Westmead Hospital, where research has shown that extreme heat drives a significant spike in emergency presentations. These are real costs landing on our community, our health system and our council budget, and the corporations whose climate pollution is driving this have contributed almost nothing to fixing it.

"The council's unanimous support for this motion demonstrates that support for a more sustainable financial model for councils to manage accelerating costs of climate damage is an essential community need, not a partisan issue.

"This week at ALGA, Parramatta is supporting the City of Sydney motion calling on the federal Government to implement a Climate Compensation fund, paid for by polluters, with a dedicated funding stream for councils to support the ever increasing costs and requirements of adaptation and emergency management."

Contact details:

Laura Corrigan, Media Advisor, Climate Media Centre – 0423 690 152 – [email protected]