Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline to the House the economic impacts of the recent natural disasters?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Moreton for his question, because his area was severely damaged. Those areas south of the river, near the city, did have a very dramatic impact from the floods. Something like 5,000 premises in his area were affected and certainly many of those people would have received support payments from the Commonwealth—of that there is no doubt. I think something like 1,000 businesses as well were impacted in that area. The member for Moreton worked tirelessly through that period with those businesses and the affected households, as indeed did many other members in this House on both sides of the aisle. They were out there working with their local communities to make sure they had access to Centrelink so they could access payments and to make sure that services were being delivered by the agencies, whether the city council or the great not-for-profit organisations that played such a role.

We talked yesterday about the human impact of this flood, but today I want to talk a little bit about the economic impact of the floods and the cyclones not just in Queensland but elsewhere. Treasury estimates that the January floods alone will knock half a percentage point from growth in 2010-11 and most of that will hit in the March quarter. Of course, that is before you have the impact of Cyclone Yasi, and that impact was great in North Queensland and Far North Queensland. There was a dramatic impact particularly on our coal exports, which may be down as much as $5 billion, and rural production, which may be down as much as $2 billion. And, of course, there was damage to other sectors, as a member said before. There was around $300 million in the tourism sector and around half a billion dollars in remaining industries such as manufacturing, retail and transport.

That is all before you get to the price impact—the impact on the CPI and what it actually means to people at the supermarket. Treasury has estimated that the January floods will increase CPI inflation by one quarter of a percentage point in the March quarter, and that is before you get to the impact of Cyclone Yasi, which will probably add another quarter of a percentage point to that figure.

Of course, as the Prime Minister was saying before, up there in North Queensland and Far North Queensland 90 per cent of Australia’s bananas are produced and about one-third of our sugar is produced. So we will see price rises but, thankfully, they will largely be temporary. They will unwind as crops regrow and production comes back online.

Of course, all of this will have an impact, but the thing that we need to remember is that it is not going to knock our economy off its medium-term growth path, and its medium-term growth path is strong. We have a strong investment pipeline, particularly in resources. ABARE estimates there is $380 billion in an investment pipeline in the resources sector alone. We should never forget that we have had very strong job creation—364,000 jobs in 2010—and, of course, we do have a strong fiscal position, returning to surplus faster than any other major developed economy. Of course, today we have had a welcome rebound—a small one—in consumer confidence. That is very good. I firmly believe that Australians can have confidence that, as we move forward, activity will recover and we will rebuild from these events.