‘Unpredictable' threat to budget hopes

Yahoo

2 days ago

The unpredictability of natural disasters is threatening hopes of Labor delivering a third budget surplus, Anthony Albanese's disasters tsar says.
Department of Finance figures released last week showed the Albanese government had shrunk the forecast underlying deficit for 2024-25 to $5.5bn as of May, down from $27.9bn.
But with natural disasters happening more often and states needing greater federal support in their responses, factoring in the cost poses a serious challenge for Jim Chalmers as he vies to keep his budget streak.
Emergency Management Minister Kristy McBain said on Sunday extreme weather events had already cost Commonwealth coffers some $2bn in the first six months of 2025.
'The first six months of the year we've seen a number of events in our communities,' she told Sky News, pointing to ex-tropical cyclone Alfred.
Alfred caused havoc by pounding coastal communities in Queensland and New South Wales with violent waves and winds.
It also affected when the Prime Minister called the election.
'We've had those southwest Queensland floods, flooding in North Queensland,' Ms McBain said.
'Just last month, we saw the mid-North Coast and Hunter floods and an event, obviously over the past week on the South Coast of NSW in particular, also at a time where we've got drought in Victoria and South Australia.'
She said while the states and territories led the disaster responses, the federal government has 'provided over $770m in direct Commonwealth assistance to people in disaster hit areas'.
Ms McBain said federal funds also went into economic recovery, such as supporting primary producers and small businesses.
'So for the first six months of this year, we're close to $2bn that we've spent, and we'll continue to work with the states and territories … to make sure that we are dealing with some of those infrastructure impacts,' she said.
Asked directly if the costs would ultimately dash the Treasurer's chances of landing another budget surplus, Ms McBain said natural disasters were hard to factor in to planning.
'In a budget, you are looking at a range of things that you can measure and predict,' she said.
'And I think what we have come to see is that natural disasters sometimes are unpredictable, and the impact they have on communities can be long and wide ranging.
'And what we've said from day one since the Albanese government was elected, is that we will walk with communities through the long tail of recovery, because recovery isn't … a few days while cameras and lights are in the area.
'It's … the weeks, the months and potentially years afterwards.'