Australia Govt lifts economic cost of floods

CANBERRA: Massive floods and a cyclone that hit large parts of Australia's eastern coast this year will cost the economy around A$9 billion ($9.35 billion), with most of that being felt in resources and agricultural production, the government said on Sunday.

The twin natural disasters in resource-rich Queensland State in January and February, as well as widespread flooding in Victoria, would cost well above earlier estimates of A$5.6 billion, Treasurer Wayne Swan said in a weekly economic update.

"Lost coal production could total A$6 billion, which is A$1 billion more than previously estimated.

Damage to crops will be close to A$2 billion, and the loss of activity to the tourism industry is expected to amount to A$400 million," Swan said.

"With the hit to government revenue and business activity, these tragic events have certainly heightened the challenges facing our economy and made the difficult task of compiling next month's budget even more difficult."

The revised estimate comes as Prime Minister Julia Gillard and Swan struggle to find enough money to keep their promise of returning the national budget to surplus by 2013, and as yet another cyclonic low threatened Western Australia State.