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Floods cost Australia billions

Deadly floodwaters that have swamped huge parts of Australia will cost the nation one billion Australian dollars (£622.8 million) in agricultural losses and billions more in lost coal exports, the nation's treasurer has said.

The damage figures released by federal Treasurer Wayne Swan were the first official estimates of the financial fallout from the floods, and come one day after the government unveiled a proposal to institute a temporary tax to help pay for the disaster.

"This is going to be, most likely, our most costly economic disaster in our history," Mr Swan said.

Heavy rains that began in November caused massive flooding across the country that has claimed 35 lives and damaged or destroyed 30,000 homes and businesses.

Brisbane, the country's third-largest city and the capital of hard-hit Queensland state, was under water for days.

Initial estimates of the overall damage plus the cost of emergency grants to flood-affected communities for the federal government is 5.6 billion Australian dollars and likely to rise, prime minister Julia Gillard said as she announced a plan for a temporary tax to help pay the bill.

The tax would apply to those with above-average incomes and exclude anyone affected by the floods. Those with incomes between 50,001 and 100,000 Australian dollars would pay 0.5%, and those above would pay 1%, raising an estimated 1.8 billion Australian dollars. The legislation will be introduced to Parliament next month.

Mr Swan said that the nation's gross domestic product growth in the 2010-2011 fiscal year is expected to be 0.5% lower than previously forecast because of the floods.

One of the main triggers for the drop is the billions of dollars in expected production losses from Queensland's lucrative coal industry. Queensland produces about 80% of Australia's exports of coking coal, which represents about 10% of the nation's exports, Mr Swan said.

Damage to Queensland's crops was also expected to be extensive, with agricultural losses estimated to reach one billion Australian dollars, Mr Swan said. Tourism has also taken a hit, with an estimated loss of 300 million Australian dollars. "Australians are going to see the impact of this on the economy, particularly in the March quarter, and they're going to feel it at the supermarket checkout," Mr Swan said. "The floods have wiped out a significant part of our nation's food bowl."


From Belfast Telegraph