Australian floods and cyclone cost economy $6.6 billion
The devastating floods and cyclone that ravaged Australia last summer has cost the country’s economy more than $6.6 billion dollars; as the country begins to rebuild, the economy must deal with the loss of nearly $9 billion dollars, half a percentage point of real GDP, in production revenues, primarily from the coal and agriculture industry; the government plans to spend nearly $7 billion over the next six years to help communities rebuild, despite an expected loss in tax revenues of $1.75 billion
The devastating floods and cyclone that ravaged Australia last summer has cost the country’s economy more than $6.6 billion dollars.
As the country begins to rebuild, the economy must deal with the loss of nearly $9 billion dollars, half a percentage point of real GDP, in production revenues, primarily from the coal and agriculture industry.
The Japanese earthquake was a further blow to Australia’s economy as exports to Japan are now expected to decrease by roughly $2 billion.
The government plans to spend nearly $7 billion over the next six years to help communities rebuild, despite an expected loss in tax revenues of $1.75 billion.
In addition the damage from Cyclone Yasi is now projected at $950 million, far higher than initial estimates of $500 million.
Rather than put infrastructure projects on hold and use that money to fund relief efforts, the government has decided to reverse its decision and will go ahead with five projects to repair the Bruce Highway in Queensland for $285 million.
Following the flood, the government issued a flood tax to help generate income for rebuilding projects, but given the size of disaster relief payments it will not recoup its losses.
The tax raised a total of $1.725 billion, $75 million less than anticipated.
The Australian government is obligated under long-standing disaster-relief arrangements with states to fund $5.4 billion in reconstruction projects to rebuild damaged state infrastructure.
