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Australia floods cost billions in lost crops, mining

Heavy rains that began in November caused massive flooding across Australia.

Brisbane: Deadly floodwaters that have swamped huge parts of Australia will cost the nation AUD 1 billion (USD 990 million) in agricultural losses and billions more in lost coal exports, the nation`s treasurer said on Friday.

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," 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 AUD 5.6 billion and likely to rise, Prime Minister Julia Gillard said on Thursday 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 AUD 50,001 and AUD 100,000 would pay 0.5 percent, and those above would pay 1 percent, raising an estimated AUD 1.8 billion. The legislation will be introduced to Parliament next month.

Swan said on Friday that the nation`s gross domestic product growth in the 2010-2011 fiscal year is expected to be half a percent 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 percent of Australia`s exports of coking coal, which represents about 10 percent of the nation`s exports, Swan said.

Damage to Queensland`s crops was also expected to be extensive, with agricultural losses estimated to reach AUD 1 billion, Swan said. Tourism has also taken a hit, with an estimated loss of AUD 300 million.

"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," Swan said. "The floods have wiped out a significant part of our nation`s food bowl."

Meanwhile, a vast inland sea of floodwaters continued to push its way across southeastern Australia on Friday, threatening small communities living along swollen river systems. Dozens of homes in the region have been swamped this week.

Adding to the nation`s woes: a tropical storm that has been hovering over the Coral Sea off Queensland re-formed into a cyclone on Friday and could hit the coast by Monday, the Bureau of Meteorology said.

"This is potentially a very serious situation," Queensland Premier Anna Bligh told reporters in Brisbane.

Bureau Report