2025 natural disasters to cost Australia $2.2b — Capital Brief

The news: New Treasury analysis estimates that the immediate loss of economic activity from natural disasters in 2025 to date will be $2.2 billion.

The context: The analysis includes the impact of flooding in the New South Wales Hunter and mid-North Coast regions, as well as Cyclone Alfred and flooding in western Queensland and Far North Queensland. The estimates come from Treasury’s initial assessment at the time of disasters, meaning that rebuilding activity will be assessed in future quarters.

The immediate economic loss in economic activity is forecast to impact the March quarter, which will be evident in the quarter’s National Accounts scheduled for release on Wednesday.

The numbers: Partial data for the March quarter showed that the disasters have borne an impact on retail trade and household spending, with QLD’s nominal retail trade falling 0.3% in February and 0.4% in March.

In volumes terms, the Australian Bureau of Statistics’ Monthly Household Spending Indicator was flat in the March quarter this year, with the 0.2% fall in QLD contributing to the flat result.

What they said: Treasurer Jim Chalmers said: “Our government’s first priority is helping to fund the recovery and rebuild for communities hit hard by all the heavy weather we’re seeing more and more frequently. The human impacts matter to us most, but the economic cost is very significant too and we’ll see that in Wednesday’s National Accounts…We’ve activated disaster assistance to the Hunter and mid-North Coast regions of NSW, just as we did earlier in the year in Queensland and northern NSW.”

Minister for Emergency Management Kristy McBain added: “We are committed to funding support to increase resilience, adaptability and preparedness. Our Disaster Ready Fund initiative will provide another $200 million of investment in 2025-26…We have activated multiple disaster payments and we will continue to work with NSW on any other funding requests and I have been meeting with small business and primary producers who have been hit hard.”

The source: Treasury press release