Australia says economic cost of floods to top other disasters

Floods devastating huge areas of Australia's eastern seaboard, including the nation's third-largest city, look set to be the costliest natural disaster ever in a country known for climatic extremes, Treasurer Wayne Swan said on Monday.
The floods in the major resource state of Queensland, which have swept through an area the size of South Africa, and overnight in 46 towns in Victoria state would not delay a promised return to surplus in 2012-13, Swan said.
But the huge rebuilding and cleanup cost could force difficult spending cuts. The estimated cost of rebuilding the worst hit Queensland state alone stood at A$10 billion ($9.8 billion), The Australian newspaper said on Monday, and the damage bill was rising fast as record flooding moved south to northern and western Victoria. "It looks like this is possibly going to be, in economic terms, the largest natural disaster in our history," he told Australian television.
The floods have been blamed on the strongest ever recorded La Nina weather phenomenon in the Pacific, which saw Australia record its third wettest year on record in 2010. La Nina has also caused major flooding across a third of Sri Lanka, destroying 21 percent of the nation's staple rice crop and raising fears of food inflation, while one million people were affected by heavy rains in the Philippines.
On January 5, the UN's Food and Agriculture Organisation said global food prices reached their highest levels since its records began in 1990 and grains prices could climb further due to adverse weather patterns around the world. Flash flooding in Brazil has killed at least 626 people in the past week.
Food inflation has risen to the top of the agenda for many policymakers with memories still fresh of the 2008 food crisis, when soaring prices sparked riots in several countries, high inflation and in several cases deep trade deficits. Flooding has hit four Australian states since December and the death toll from Queensland, now at 24, is expected to rise. The scale of the disaster has exceeded a 1974 cyclone in Darwin which left 43,000 homeless, although deadly 2009 bushfires in Victoria state claimed 131 lives, but caused less damage.
Queensland Premier Anna Bligh announced a judicial inquiry into the devastating floods on Monday, looking at issues including the operation of dams built to protect major cities. Central bank board member Warwick McKibbin last week warned that the Queensland floods could cut 1 percent off growth - equal to almost $13 billion, when lost production and infrastructure destruction were taken into account.