Local councils across NSW are facing mounting financial pressure as hundreds of millions of dollars in disaster recovery payments remain overdue, the state’s peak local government body has warned.

Local Government NSW (LGNSW) president Darcy Byrne is giving evidence on Friday to a Parliamentary Inquiry into the operations of the NSW Reconstruction Authority, calling for urgent reforms to speed up payments to impacted councils.

“The massive increase in floods, storms and fires across NSW has devastated many local councils and their communities,” Mayor Byrne said.

“While the Reconstruction Authority is improving, the system for processing claims is inadequate with payments totalling hundreds of millions of dollars overdue to councils who are struggling with recovery.”

Mayor Byrne cited the May 2025 floods, which caused widespread damage along the Mid North Coast. He said MidCoast Council recorded a $226.5 million impact to transport and infrastructure but had received just $6.1 million after spending $43 million on emergency and immediate works.

Similarly, Kempsey Shire Council sustained a $115 million impact and has received $5.7 million to date.

“As we approach the one-year anniversary of these devastating floods, it’s time recovery funding is paid in full,” Mayor Byrne said.

He warned that unpaid claims were threatening the financial viability of rural, regional and remote councils already grappling with sustainability challenges.

LGNSW is also seeking greater transparency, urging the Reconstruction Authority to publish detailed data on claims received, approved and paid, as well as clearer timelines to reduce bureaucratic delays and strengthen long-term disaster resilience planning.