Australia’s natural disasters bill hits $3.5 billion in 2022, billions more to come

SYDNEY — Floods and natural disasters that hit all however one Australian state and territory in 2022 price the economic system A$5 billion ($3.48 billion) and stoked inflation in accordance to Treasury estimates which forecast billions more spending in 2023.

Australia suffered 4 main bouts of flooding final yr, with international reinsurer Munich Re estimating that February and March flooding throughout northern New South Wales state that killed more than 20 was the fourth most expensive international catastrophe in 2022.

Natural disasters price the economic system A$5 billion or 0.25% of actual GDP for final monetary yr, in accordance to Treasury estimates, significantly delays to mining and development plus the destruction of crops. The figures didn’t embody injury or destruction of infrastructure and different belongings.

“We’ve put that number out there really just as a reminder that even though we are rightly focused on the human cost of these natural disasters, which are becoming more and more frequent, there is a cost to the economy as well and a cost to the budget,” Treasurer Jim Chalmers instructed ABC radio on Friday forward of a tour of Lismore, a city 700 kilometers (435 miles) north of Sydney devastated by floods final yr.

Flooding worsened final yr’s report inflation, in accordance to the Treasury, with washed out crops and disrupted logistics contributing to a 16.2% rise in fruit and greens costs in contrast to the pre-COVID decade common of two.5%.

Days after inflation stunned forecasters to the upside, the Treasury believes contemporary meals costs will proceed to rise.

Mr. Chalmers additionally flagged more calls for on the price range he’ll ship in Might, with billions of extra disaster-related spending anticipated this yr on prime of A$3.5 billion spent in 2022.

The federal government will concentrate on mitigating future disasters, he stated, as a substitute of insurance policies like subsidizing costly insurance coverage for individuals who stay in disaster-prone areas.

“We need to be careful about how we expose the government’s balance sheet to some of these big risks,” he stated. — Reuters

Source link