Disasters to cause huge harm to Australia economy – Current revenues are Aus$110 billion lower than forecast
Canberra, 08 February 2011 (FOCUS News Agency) – A drop in coal and agricultural exports forced by Australia’s flood and cyclone disasters could “thump” its economy in the first quarter, forcing growth into reverse, Treasurer Wayne Swan has warned, AFP reports. The calamitous weather that has battered resource-rich Queensland state since December could cause the robust economy’s first contraction since the height of the global financial crisis, Swan told The Australian newspaper. “There is no doubt that the natural disasters will thump our economy in the first quarter of this year,” Swan told Tuesday’s edition of the paper. “As it stands, you couldn’t rule out a negative in that quarter,” he cautioned. The coal industry, which flooding virtually shut down in Queensland last month, stood to lose about Aus$5 billion ($5 billion) in exports, while agricultural production could take a Aus$2 billion hit, he said. Farming organisations have estimated that top-strength Cyclone Yasi, which bombarded Queensland’s sugar and banana heartland, could cost those industries at least Aus$800 million. Swan said current revenues were Aus$110 billion lower than had been forecast for the period in the 2007-08 budget and said Canberra faced significant challenges balancing the demands of the mining boom with consumer caution. The Treasurer also warned that labour shortages were “not a theoretical construct” but would become a pressing reality, with the jobless rate at 5.0 percent, a level consistent with full employment. “As we go through the next 18 months or so we’ll have an economy that is reaching the limits of its capacity,” he said. …
