Treasurer Jim Chalmers on Monday said the government would have to factor in the cost of the rebuilding efforts and disaster recovery payments,as well as the broader economic disruption.
“Obviously,when you’re talking about absolutely prime agricultural land,making some of the biggest contributions to our grocery aisles,there will be an impact,and it will be a substantial impact I fear,” he said on Monday.
“I think Australians do need to brace for a cost-of-living impact from these floods. These are likely to push up the cost of living when Australians are already under the pump.”
The summer floods were expected to cost the federal government more than $6 billion in disaster relief and recovery works. The latest floods will also cost the government billions of dollars.
The northern Victoria region hit by this month’s deluge is home to more than 200,000 people and covers some of the most important beef,lamb,fruit and vegetable growing land in the Murray-Darling basin. It also produces almost a quarter of the nation’s milk supply.
In March,the federal Treasury estimated the floods that hit northern NSW and Queensland would reduce national GDP by 0.5 percentage points in the short term before being offset as communities were rebuilt.