The majority of Australians (68%) lived in local government areas affected by severe natural disasters, mostly floods, in 2022, according to Treasury’s analysis.
The Treasury claimed that most of the disaster declarations last year were due to wet weather and floods across the east coast, wiping approximately $5 billion from the country’s economy, with most of the costs coming from lost activity in mining, agriculture, retail, and construction. The floods also worsened inflation by pushing up the prices of fruits 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,” said Treasurer Jim Chalmers, as reported by ABC.
“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.”
Chalmers said the government continues to focus on making the economy “more resilient” to extreme weather events and helping communities prepare for natural disasters.
Australia faced one flood after another in 2022, but the most notable was the Eastern Australian flood that occurred from late February to March – deemed the costliest flood in Australia and one of last year’s largest event losses outside the US.
The Eastern Australian floods generated a whopping US$4.7 billion in industry loss, according to the CRESTA Industry Loss Index (CLIX).
In an initial estimate of the Australian insurance market loss related to the event, PERILS expected AU$3,991 million in losses, covering property and motor hull lines of business.
