The state government says the cash injection will speed up the process of regenerating razed communities, cutting red tape involved in clearing damaged property and rebuilding.
“We want to see these communities built back better for the longer term and more resilient to longer, hotter and drier seasons we can expect in the future,” Prime Minister Scott Morrison said.
The Prime Minister urged the agencies and certifiers involved in approving the clean-up to “surge in and get the work moving”, while Victorian Premier Daniel Andrews said the scheme would begin “as soon as possible.”
“We want to see local contractors engaged for this work – they know their communities the best and it will help ensure as much of this money as possible is kept in and spent in bushfire affected areas,” Mr Andrews said.
Insurers have promised not to pocket any savings resulting from the governments footing the bill, saying they will re-inject the money back into affected communities.
The announcement represents the latest collaboration between the Victorian and federal governments on bushfire relief, after the Prime Minister deployed the army to assist local authorities in early January.
The announcement comes after the army reached the trapped community of Noorinbee by helicopter, providing food and water on Friday night.
A resident of the town, which sits just off the closed Princes Highway between Orbost and Mallacoota, said on Saturday that locals were running out of supplies and felt like “prisoners” in their own town.
The clean-up will ensure bushfire victims who may be exposed to asbestos in rubble will not need to risk their own health in clearing damaged buildings.
Dangerous trees, fencing and vehicles may also be removed as part of the program.
About 14,000 insurance claims related to bushfire damage have been lodged since early November across the country, with insured losses estimated at $1.34 billion, according to the Insurance Council of Australia (ICA).
The ICA, which represents major insurance companies, has assured the Victorian government insurers will not profit from the program, which will likely reduce the amount of payouts required to be made to bushfire victims due to the government covering the cost itself.
All savings accrued from not having to pay those with damaged property will be directly passed on to bushfire-affected policy holders, as part of the assurance made to the government.
Rob Whelan, ICA’s chief executive, said the program would “enable insurers to maximise the funds available in their customers’ policies for rebuilding.”
Government-run relief payment schemes have been criticised by some locals in East Gippsland and the state’s north-east for being difficult to access and not being financially significant.
The Prime Minister has promised a major package to assist small business that is expected within days.
The $37.5 million share of the clean-up from the Andrews government comes on top of the $50 million allocated to new agency Bushfire Recovery Victoria, which is responsible for the state’s recovery from the fires.
The federal component of the spending is made up of funding from the $2 billion bushfire relief fund, and from funds allocated to disaster relief.
The final cost of the demand-driven program will depend on how many people take up the offer, with $75 million the maximum outlay.
The Prime Minister said the cost of similar clean-up schemes expected to be established in NSW and South Australia would likely top $100 million.
Paul is a reporter for The Age.