Add Category
New data has revealed the majority of Australians lived in a local government area that was affected by serious natural disasters — mostly floods — in 2022.
- Treasury estimates the cost of the floods to the economy was around $5 billion
- Disasters also drove inflation by pushing up the cost of fruit and vegetables
- The treasurer says as disasters increase in frequency they will put more pressure on the economy
The analysis from Treasury showed that 68 per cent of Australians were living in an area that was covered by a natural disaster declaration in 2022.
Much of last year's disaster declarations were due to wet weather and floods across the east coast of the country, which Treasury estimates wiped $5 billion from the national economy.
Up and down the east coast, rain records were broken last year during extreme weather events that saw flood and insurance payouts hit new peaks.
This year has already seen the flow-on effects of earlier floods throughout the Murray-Darling basin, with towns in South Australia inundated.
Record flooding is also affecting the Kimberley region in Western Australia's north-west and much of central Australia.
Federal Treasury noted that most of the costs came from lost activity in mining, agriculture, retail and construction, but also that the floods had also worsened inflation by forcing up the price of fruit and vegetables.
"Even though we are rightly focused on the human cost of these 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 said.
"When it comes to things like the price of fruit and veggies in our supermarkets, when you consider a lot of our logistics chains are broken but these natural disasters, our prime agricultural land and some of our mining areas [are] as well.
"For all of those reasons, the economy is vulnerable to natural disasters."
Mr Chalmers said the government was focused on making the economy "more resilient" and helping communities get ahead of natural disasters and put in place plans to prepare and mitigate future events.