UPDATE: The City of Newcastle (CN) is facing an urgent crisis as landslip victims in New Lambton grapple with escalating financial and psychological distress. As residents approach a second year displaced from their homes, their insurance-funded temporary accommodation is set to end no later than May 2026, leaving them vulnerable to full market rent payments or dual housing costs on properties they cannot access.
In a critical meeting this week, CN councillors will decide whether to push the state government for special disaster funding to support the 16 affected households. The motion highlights that these residents have received “no practical assistance,” despite being impacted by the same natural disaster that has garnered financial support for communities north of Newcastle.
Councillors argue that existing state support packages, including a $50 million Housing Support Package, do not extend to New Lambton residents. The motion describes the harrowing emotional toll on locals: “Residents continue to experience psychological stress, exhaustion, and trauma; loss of community connection due to displacement; impacts on children’s education; and ongoing uncertainty about future housing.”
On May 23, 2025, residents of 15 homes were forcibly evacuated, and one additional home was evacuated in late August. Many residents are now unable to retrieve essential belongings due to insurance delays, compounding their distress. Neighbors are also expressing fears about potential future evacuations, rising insurance premiums, and diminished property values.
The council is considering applying for assistance under Category D of the Australian Government Disaster Recovery Funding Arrangements (DRFA). This funding aims to provide tailored support when standard disaster relief is insufficient. The council’s motion states that other local government areas have received Category D support, including temporary housing programs and financial aid, while New Lambton residents have been left without any similar measures.
Inconsistencies in support have raised serious equity concerns. The council has sought clarity regarding this differential treatment but has received no substantive explanation. A spokeswoman for the NSW Reconstruction Authority (RA) acknowledged the significant impact of the landslip, stressing that a series of geological and engineering assessments are necessary to inform future decisions.
Without state intervention, CN warns that displaced residents will face long-term financial, social, and mental health challenges. The proposed funding could include housing assistance to mitigate rental costs, financial support to alleviate mortgage stress, and coverage for demolition and cleanup expenses.
The council’s decision is set for Tuesday, and the urgency is palpable as families continue to suffer amid uncertainty. As this situation develops, the community watches closely for a resolution that could significantly alter their path toward recovery and stability.
Stay tuned for updates on this critical matter affecting New Lambton residents as the council deliberates and potential funding applications unfold.
