Government funding in the wake of natural disasters should be scaled back, with more dollars spent on mitigation, the Productivity Commission has recommended.
A review into existing funding arrangements has found they are not efficient, equitable or sustainable.
The system is prone to cost-shifting, ad-hoc responses and short-term political opportunism, the commission noted in a report tabled on Friday.
"Groundhog Day anecdotes abound," it said.
The federal government has spent about $8 billion on post-disaster relief and recovery over the past decade, with a further $5.7 billion earmarked over the next four years.
The states and territory governments have also set aside $5.6 billion in the past 10 years.
But the commission is calling for a rethink and is recommending funding for recovery efforts be reduced.
Instead it says a further $200 million a year should be invested in mitigation by both federal and state governments.
"Governments over-invest in post-disaster reconstruction and under-invest in mitigation that would limit the impact of natural disasters in the first place," the commission says.
"As such, natural disaster costs have become a growing, unfunded liability for governments."
Such reforms, it argues, would also allow the states to become more autonomous in their recovery and prevention arrangements.
As well as changes to funding, the commission claims there are opportunities for information on disaster risks to be improved, as well as transparency in land use planning.
The commission urges governments not to "cherry-pick" the recommendations, arguing if they did the important balance would remain elusive.
Justice Minister Michael Keenan has written to his state counterparts foreshadowing consultations on changes.
The government is not proposing any radical reductions in support, but rather a "more modest and gradual approach" to getting the balance of mitigation and recovery funding right, he said in a statement.
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