Treasurer Jim Chalmers has announced that Cyclone Alfred will cost the federal budget at least $1.2 billion.
“I expect that these costs and these new provisions will be in the order of at least $1.2 billion, a substantial amount of money and that means a big new pressure on the budget,” he said.
The cyclone’s immediate economic impact includes a projected reduction in GDP growth by 0.25 percentage points for the March quarter.
Here’s what you need to know on Cyclone Alfred:
The disaster affected approximately five million Australians, placing nearly two million homes at risk.
Damage assessments have led to around 44,000 insurance claims, with estimated liabilities totaling $1.7 billion.
Chalmers said that Cyclone Alfred also caused significant damage on crops, particularly in the fresh produce section.
He said these supply disruptions could lead to increased inflation and rising consumer prices.
The federal government’s disaster support funding is expected to escalate to at least $13.5 billion, up from the $11.6 billion projected in the Mid-Year Economic and Fiscal Outlook.
Emergency Management Minister Jenny McAllister also confirmed that residents in the local government areas of Bundaberg and Toowoomba will be eligible for disaster recovery funds.
The one-off payment is $1,000 for each eligible adult and $400 for each child.
She also indicated that residents in Brisbane, Ipswich, Moreton Bay, Toowoomba, and Somerset in Queensland, as well as Clarence Valley, Richmond, Bellingen, and Kyogle in New South Wales, will soon be eligible for the disaster recovery payment.
Given these developments, experts are advising policymakers to be cautious about introducing new spending measures before the federal election.
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