The prime minister says civilians will always be at the centre of flood rescue and recovery strategies as his government faces criticism for not deploying defence forces in flood-ravaged areas sooner.
Scott Morrison declared a national emergency in NSW late on Friday, triggering additional resources for the state and allowing the federal government to access stockpiled resources and remove red tape in terms of business and welfare support.
But the prime minister said locals would naturally be able to respond faster in disaster areas.
"That has always been an important part of our natural disaster response, and always will be," Mr Morrison said as he toured the flooded Windsor region on Saturday.
He also said 20 mobile home units had been set up in the Lismore area, with more than 100 more on the way, in a region where it's estimated two-in-three flood-damaged homes will need to be demolished or undergo substantial repairs.
The federal government is splitting a $250 million housing package with the NSW government which also include rent relief as people are left homeless.
"It's going to be a long road back," Mr Morrison said.
Governor-General David Hurley issued the national emergency declaration after a meeting with the prime minister in Canberra on Friday night.
The gazette notice for the declaration, which came into effect at 10.25pm, said it would last for three months and only covered NSW.
Mr Morrison said Queensland Premier Annastacia Palaszczuk had knocked back a similar offer for the Sunshine State, with Ms Palaszczuk saying on Thursday it had been needed a week ago.
On Saturday Mr Morrison said if Ms Palaszczuk had wanted a national emergency declaration she should have requested one. "But she didn't," Mr Morrison said.
He also urged insurers to "pay out" and honour contracts with customers saying improving resilience and adaptation works was key to keeping disaster-prone areas insurable.
"In dealing with climate change you have to get emissions down ... dealing with climate change is about resilience and adaptation as well," Mr Morrison said.
A $4 billion capital fund set up by the Morrison government in the wake of the Black Summer bushfires to fuel disaster mitigation work has only spent $50 million despite accruing more than $800 million in interest since its establishment.
The national emergency declaration comes as assistance is extended to a further 12 local government areas in NSW following severe flooding and storms throughout March.
The support will be provided through the jointly-funded Commonwealth-State Disaster Recovery Funding Arrangements as some regions remain in the emergency stage despite waters receding in other parts of the state.
NSW Emergency Services and Flood Recovery Minister Steph Cooke said the support would extend to thousands of households, small businesses, primary producers, non-profits and councils.
"The immense scale of the flooding is unprecedented and we are working closely with the Commonwealth to put equally unprecedented resources into the significant clean-up and long-term recovery effort," Ms Cooke said.
The LGAs include Cessnock, Cumberland, Dungog Shire, Goulburn-Mulwaree, Lithgow, Maitland, the mid-western region in the Central Tablelands, Muswellbrook Shire, Queanbeyan-Palerang, Singleton Shire, Snowy-Monaro, and Upper Hunter Shire.
