Cyclone Alfred slashed 0.25 percentage points off quarterly GDP: Treasury
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The news: The economic impact of Cyclone Alfred is expected to be significant, shaving 0.25 percentage points off quarterly GDP.
Treasurer Jim Chalmers will use an upcoming speech at the Queensland Media Club to share the latest Treasury estimates of the impact and the upcoming spending to support those affected, both of which will be reflected in the federal budget on 25 March.
The numbers: Treasury estimates that the immediate hit to GDP totalled up to $1.2 billion. About 12 million work hours were lost as a result of businesses closing temporarily due to the event. And Chalmers is warning that it “could also lead to upward pressure on inflation” for items like fruit and vegetables but also building.
Early modelling indicates that losses covered by the Cyclone Reinsurance Pool total about $1.7 billion, and 44,000 claims have been lodged.
The federal and state governments have provided $30 million for immediate recovery costs, such as repairs and clean up. There have also been millions of dollars paid out in hardship support.
Chalmers flagged there would be “sensible provisions” made in the budget, bringing the total cost to about $1.2 billion.
This means that disaster support is expected to rise from the $11.6 billion expected during the mid-year update to a minimum of $13.5 billion.
What they said: "How we fund the recovery and rebuild communities is the first key influence on the Budget we’ll hand down a week from today,” Chalmers is due to say in his speech on Tuesday.
“The human impacts matter most to us here but the economic cost will be very significant too ... We don’t yet know the precise cost to our budget, but again it will be significant."
The source: Treasurer Jim Chalmers speech excerpt
