The federal government has scrapped proposed changes to the Disaster Recovery Funding Framework after a campaign by Queensland councils and politicians.

The planned overhaul would have reduced Canberra’s contribution to the funding from 64%-75% to a 50-50 split with states.

This week, an open letter from Queensland Disaster Recovery Minister Ann Leahy to the Prime Minister – signed by 130 mayors and businesses including RACQ – said: “Your proposed funding cuts will mean Queensland communities are forced to choose which assets not to rebuild, while facing higher insurance premiums, reduced community safety and bankrupt councils.

“Queensland already pays its fair share. Per capita, Queensland residents pay over 50% more for disaster response and recovery than NSW residents, and three to five times as much as residents of other states and territories.

“Your proposed cuts reduce the Commonwealth’s contribution to disaster recovery by billions of dollars over the forward estimates, diminish a successful program with a proven record of improving resilience, and leave states, councils and local communities to fund the difference.”

In July, the Local Government Association of Queensland said the state would have missed out on $2.8 billion of federal funding if the proposed changes had been in place since 2018.

Today, the federal government announced the planned changes will be withdrawn.

Treasurer Jim Chalmers said: “The Commonwealth will retain the current cost‑sharing arrangements, providing up to 75% of disaster recovery funding when certain criteria are met, because we know communities need certainty when disasters hit.

“Further changes include retaining the ability for councils to claim costs under counter-disaster operations and revising funding activation thresholds to ensure all communities get the support they need when they need it.

“The changes we’ve announced today, following extensive consultation with locals in disaster‑affected communities, will mean that our policy works even more effectively, with more funding [and] easier access to funding in a more timely fashion.”

Mr Chalmers says today’s announcement “is the direct result of strong advocacy from councils and Queensland federal Labor colleagues”.