Prime Minister Julia Gillard (right) said the cost of the floods would not delay a return to budget surplus in 2012-13, but J.P. Morgan predicted the disaster would crimp growth this year and could delay another increase in interest rates.
The worst floods in 50 years have at times covered an area the size of France and Germany combined in Queensland state. Six people have been killed while dozens of towns have been isolated or partially submerged. More monsoon rains are expected all week.
"People need to think about how to get out and if you don't need to travel, stay off the roads," said Police Chief Superintendent Alistair Dawson, referring to some of the smaller towns near Brisbane, Queensland's state capital.
Toowoomba, a major rural city west of Brisbane, was hit by a two-meter-deep wall of mud-filled floodwater which swept two people to their deaths and left others clinging to the tops of vehicles carried along streets by the torrent, police said.
In Brisbane, a city of 2 million, people in low-lying areas were given sandbags and warned the worst of the flooding might not occur until Tuesday or Wednesday.
Flooding in Australia Continues
Police urged motorists to stay off the roads in the state's heavily populated southeast, home to the Sunshine and Gold Coast tourist strips, Australia's premier tourism destinations.
Queensland Tourism said rains and flooding would hurt the industry, but it was too early to quantify the impact. (Left: Kangaroo marooned by flood)
Australia's A$32 billion tourism sector was already in trouble due to the strength of the local dollar driving off overseas visitors and enticing Australians to go abroad.
The floods have caused an estimated A$6 billion ($6 billion) in damage and economists say they will cut economic growth in 2011 and heighten inflation as food prices rise and reconstruction begins in the nation's second largest state.
TOTAL DAMAGE BILL UNKNOWN
Gillard announced more aid on Monday, but said the floods would not derail an expected 2012-13 return to a budget surplus, with economic expansion now well into the 20th year and annual growth at 2.7 percent in December.
"I can't at this stage tell people what the total cost of recovering from these floods is going to be, because I can't predict the draw-down on infrastructure money until we see what's under the floodwaters," she said.In Queensland's north, floodwaters are flushing toxic, pesticide-laden sediment into the Great Barrier Reef, (left) and could threaten fragile corals and marine life in the world's largest living organism, environmentalists said on Monday.
Flood plumes from the swollen Fitzroy and Burnett rivers in Queensland state had muddied reef waters as far as the Keppel Island Group (map at right), about 40 km (24 miles) offshore, at the southern end of the World Heritage-listed reef.
"Toxic pollution from flooded farms and towns along the Queensland coast will have a disastrous impact on the Great Barrier Reefs corals and will likely have a significant impact on dugongs, turtles and other marine life," the World Wild Life Fund (WWF) said in a statement.
The Great Barrier Reef Marine Park Authority, which manages the 345,000 square km (133,000 sq mile) reef off Australia's east coast, said sediment, fresh water, nutrients and high temperatures would damage or stress corals.
Marine experts expected to see coral bleaching (right) as a result of the flooding now sweeping across central and southern Queensland.
"It's fair to say the floods are not good news for the coral reef," said park authority General Manager Andrew Skeats.
The damage to the Great Barrier Reef would be exacerbated because the floods are "bigger, dirtier and more dangerous due to excessive tree clearing, overgrazing and soil compaction", the WWF said.
Experts expect the reef to recover, but depending on the coral resilience, that could take up to 100 years.
Skeats said the worst affected area at the moment was a relatively small part of the Great Barrier Reef and the Southern Barrier Reef, and the impact on the rest of the reef could be contained to a small area, if the weather was favorable. (Goat fish at Great Barrier Reef)
The Great Barrier Reef contributes A$5.4 billion ($5.4 billion) to the Australian economy each year from fishing, recreational use and tourism.
COAL INDUSTRY HIT HARD
Queensland's $20 billion coking coal export industry has been brought to a virtual standstill. Cargo ships loaded with coal sit in harbor as the floods endanger the coal industry as news of washed out key rail and road links are reported. Some of the infrastructure damage may take years to repair.
"With more rain falling it could be months before the floodwaters clear and the extent of the damage to essential infrastructure is known," said J.P. Morgan chief economist Stephen Walters.
Floods have also paralyzed operations that produce 35 percent of Australia's estimated 259 million tons of exportable coal. Australia contributes two-thirds of global coking-coal exports, needed to make steel.
Coal seam gas drilling in the Surat Basin, a major source of gas for an estimated $200 billion in proposed liquefied natural gas projects to be built this decade, has been halted by flooding.
Global miners Anglo American, Rio Tinto, Xstrata and BHP Billiton, have been hit by the floods, and all have made force majeure declarations, which release firms from delivery commitments.
Flooding has begun to recede in the main Bowen Basin coal region, but many mines remain flooded and will take weeks to drain and resume full production. While some rail links between mines and the ports have resumed, others remain under water.
Coal stocks were running low at the key coal port of Dalrymple Bay, but it was receiving enough to keep loading ships, while the port of Gladstone said it could be days to weeks before it starts getting coal supplies back to normal.
Reuters,"Flash floods hit Australia's third biggest city", accessed January 10, 2011
Reuters,"Floods threaten Australia's Great Barrier Reef",accessed January 10, 2011