Open for Business?

Post-disaster community recovery

Policy Innovation Hub
Jan 23 · 4 min read

by Lex Drennan

early a decade ago, the Policy Innovation Hub was commissioned to undertake a series of case studies on communities affected by natural disasters. We developed comprehensive case studies on the communities of:

The case studies were developed through analysis of statistical data, government documents, disaster recovery plans and, most importantly, extensive face-to-face interviews with community members and local officials.

Our findings from this work, commissioned and published by the Regional Australia Institute, are particularly relevant in the wake of the catastrophic fires that have impacted the south east of Australia. Allowing for the significant complexity of disaster recovery, the psycho-social impacts and the trauma experienced by individuals, our key finding was that local economic recovery drives community recovery.

A community cannot recover if its economy does not.

Reconstruction challenges

In the aftermath of the 2019 fires, dozens if not hundreds of such regional and rural communities are struggling to regain their footing and beyond that, thrive. Yet what they face now is a compounding process of decreasing population and economic decline. This negative adaptation spiral has already begun. The challenge for government recovery agencies and local governments is how to pull this process up short before it becomes irreversible for many communities.

Image: Negative Adaptation Spiral

The experience of the Victoria Black Saturday fires is particularly relevant here. In Marysville, a town devastated by the February 7th fires, governments collectively spent $135M on infrastructure and other community recovery activities. In contrast $2.77M was provided in direct grants to businesses through the National Disaster Relief and Recovery Arrangements (NDRRA). This trend was consistent with the other communities we profiled, and is echoed throughout international literature.

There is a tendency of governments to fall prey to thing theory where economic development is premised to flow from building big things (from community centres, to sports facilities to convention centres). Yet this thing focus only serves to drive the most pernicious aspect of disaster recovery, the reconstruction mirage.

In the next year to two years, as reconstruction picks up speed, there is a very real risk of conflating reconstruction activity with local economic recovery. The two are not the same. Once the insurance construction companies complete their work they will leave; both their presence and abrupt departure inflict further upheaval on local economies. Without planning for this economic transition, communities will again be exposed to stagnation.

As governments grapple with the scale of this disaster and identify how to support affected communities, there are some critical items to consider for effective business recovery:

  • Speed is essential and cash is king — the longer a business remains closed the more likely it will fail. Time to reopen is the only factor that influences post-disaster survival rates;
  • Building big ‘things’ does not drive economic recovery;
  • Underlying local economic recovery is masked and distorted by the reconstruction boom.

Further, the presence of functioning ‘drawcard’ businesses, or ‘drawcard’ environment attractions serve as the anchors which spur broader local economic recovery. Rather than being sites of devastation, it is vital that the affected towns are seen as open for business.

The challenges of recovery are complex and intertwined. Having survived these unprecedented fires, communities are about to discover that the hard work is just beginning. Yet there are policy levers available to governments to support this process. In the tragedy of human and environmental loss facing New South Wales and Victoria, it is essential to remember that business recovery exerts a powerful influence on community recovery. The centrality of business recovery as a driver of community recovery must not be overlooked.



Lex is an industry leader in crisis management and business continuity. She has held senior roles in the public and private sector, leading the development and implementation of crisis and business continuity management frameworks. Her broad experience across crisis management fields spans mining oil and gas, natural hazards management, critical infrastructure protection and resilience and business continuity management in infrastructure and financial services. Lex is engaged as an Adjunct Industry Fellow within Griffith Climate Change Response Program at Griffith University, researching in the field of disaster resilience.

The Machinery of Government

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Policy Innovation Hub

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Independent expert analysis and insights from Australia’s best political scientists and policy researchers.

The Machinery of Government

Independent analysis from Australia's best political scientists and policy researchers focusing on policy, elections and governance.

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