Newcastle earthquake 30 years later, Part V: Newcastle disaster relief fund likely to wind up in 2020 says chairman on eve of 1989 earthquake anniversary

The Newcastle Region Natural Disaster Relief Fund Trustee Ltd was formed in December 1994, when the lord mayor's fund was shut down under its five-year sunset clause.

Fund chairman Michael Johns, a retired Newcastle solicitor and businessman, told the Herald this week that with only three directors left on the board and everyone "getting on a bit" in age, it was time to hand over the reins.

The latest publicly available financial report - for the year to June 30, 2018 - shows the fund had just over $1 million in assets, made up of $166,000 in cash, 708,000 in investments and $160,800 in receivables, representing the balance of four outstanding earthquake loans.

Johns, a director since 2002, said the alternative was to wait until the loans were repaid following the deaths of the recipients, which had been the procedure for most of the loans from the earthquake fund. He said the transfer could be voted on at a January board meeting, with the new custodian to receive the repaid loans.

The other directors are Barrie Lewis, appointed in 1995 after retiring as Newcastle council's town clerk (the closest equivalent position to the modern council CEO's position held by Jeremy Bath); and Margaret Murray, appointed in 2005, who worked on the earthquake fund while employed by the Department of Community Services.

Johns said the fund's assets were likely to go to the Newcastle Permanent Charitable Foundation, which had already received donations of earthquake money, including $3 million in 2007.

He said the plan was unrelated to approaches from Newcastle City Council, which is seeking $400,000 to cover half remaining costs of restoring Shepherd's Hill cottage near King Edward Park, severely battered during the 2015 "east coast low" storm that hit the region and resulted in the drowning deaths of three people at Dungog.

Council general manager Jeremy Bath says the fund and its directors had ignored his requests for a meeting since February 2018, releasing a chain of emails and "unanswered" letters to back his claims.

"Thirty years on, it is outrageous that this fund holds $1 million but has no website or obvious means for people to contact it to apply for help," Bath said. "And it's controlled by three people who don't want to be contacted," Bath said.

Johns defended the board's communications with the council, saying it had "no authority" over the fund. The Shepherd's Hill application "didn't fit" the grant criteria.

Bath said he did not understand how Shepherd's Hill wasn't eliglible, given it was damaged in the same storm that saw the fund give $30,000 to an organisation in Dungog.

In an email to the Herald, Johns indicated that the reasons were technical. The cottage was not a "deductible gift recipient" or DGR, while the community group in Dungog was.

Asked about the modest size of the Dungog donation, Johns said it was limited by the trust's 1994 constitution, which states that more than half of the money granted must go to the five Greater Newcastle local government areas: Newcastle, Lake Macquarie, Cessnock, Maitland and Port Stephens.

As well-intentioned as it was, the "50 per cent" rule was a brake on the fund. Johns said it would likely affect how much money, if any, could go to victims elsewhere of this season's bushfires, who would be obvious targets of help.

With the 30th anniversary of the earthquake approaching, the Herald first approached the relief fund seeking an update on its recent activities.

Little had been heard since 2009, the 20th anniversary, when the fund's inaugural chairman, accountant Alwyn Druce, told Greg Ray about the fund's history. Conceived on quake day, Newcastle lord mayor John McNaughton said at the time that a public appeal was a necessity, given the widespread nature of the damage.

Druce, who died in 2015, said the fund was established as "a safety net".

"Applications went to government first, then if they couldn't help they would be referred to the fund committee. Subcommittees were set up to consider the details of various kinds of claims, including injury and property damage.The committee was given access to government files to help evaluate claims."

He said they met three nights a week for four years and conferred on every decision.

"If the government could fully help then we did nothing. But there were many cases where government rules caused problems and we had to step in."

From the word go, money poured into the fund quickly, although lord mayor McNaughton was continually calling for more donations, saying the money wasn't enough.

The $1-million mark was topped the Sunday after the quake. On January 17, the total was $2.4 million. At month's end it was $3.45 million. A week later, $3.8 million, after a charity auction raised $15,000, including $40 for a palm full of moustache clippings from the extravagant Australian fast bowler Merv Hughes. By March 1990 it had hit $5 million.

On November 29, 1990, Hawke's treasurer Paul Keating infamously announced "recession we had to have". Home loan interest rates were an eye-watering 17 per cent a year, so the earthquake fund's zero -interest loans - which for householders needed not be repaid until the recipient died - were a lifeline for many.

By August 1991, the fund had distributed $6.5 million. And as money started coming back in, it was lent out again. By the wind-up date of December 1994, the fund had collected a reported $7.9 million and paid out $10.5 million, with $1.2 million in the kitty - a little more than remains today, although with considerably more purchasing power back then.

Calls came to distribute the remaining remaining money. The Westpac rescue helicopter service lobbied for $500,000 for a new chopper. Others wanted money directed towards bushfire relief, after fires from August 1993 through to January 1994 raged from the NSW south coast to the Queensland border, and west as far as Bathurst, killing four people.

With earthquake claims having virtually stopped, a NSW Supreme Court decision was sought and obtained to allow a new fund to distribute the money outside of Greater Newcastle, giving rise to the "50 per cent rule".

If this account reads like a litany of controversies, the quake fund played a crucial role in getting it should be remembered that the donated funds were put to good use. Despite generous quake relief promised by the state and federal governments, stories soon appeared of seemingly worthy applicants unable to jump eligibility hoops swaddled in red tape.

John McNaughton remains obviously proud of what the fund achieved - and what he and the others who led the quake response and the city's revival achieved. Now, as then, he believes the efforts of many have been overlooked.

It's almost inevitable that arguments emerge in such situations. In 1992, we reported on two pensioner siblings in adjoining Cooks Hill terraces, who were both helped with their quake repairs. The insured brother had to repay a quake appeal loan of $50,000, while his uninsured sister received a $50,000 government grant.

And there was public anger, too, in 1994, when news broke that 13 people compensated for their Workers Club injuries would have to repay any grants from the quake fund. Quake hero Norm Duffy and Nina Bailey, whose leg was amputated, were both expected to repay $28,000 each. It may have seemed harsh at the time, but it did help the fund to keep on giving.

As McNaughton said on the quake's 10th anniversary: "I clearly remember one 80-year-old lady in real trouble who we helped out, quietly and without fuss. I know more quake stories than you could poke a stick at and many of them have similar happy endings."

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