Cyclone Alfred to Cost Australia $1.2 Billion

Treasurer Jim Chalmers forecasts Cyclone Alfred will impact agriculture, construction, and the federal budget ahead of elections.

A girl walks on a flooded street in Brisbane, Australia, on March 9, 2025. Australia's east coast is experiencing severe weather as ex-Tropical Cyclone Alfred moves south. Albert Perez/Getty Images

Australia’s Treasury estimates last weekend’s Cyclone Alfred caused about $1.2 billion in economic loss for the country.

This financial setback is expected to shave approximately a quarter of a percentage point off the nation’s GDP, said Treasurer Jim Chalmers as a way of prepping Australians for the impending Mid-Year Economic and Fiscal Outlook he is set to announce.

Chalmers detailed the anticipated economic effects of the cyclone, specifically regarding agriculture and construction.

“We anticipate that there will be some impact on fruit and vegetable costs depending on how much of the farmland has been impacted,” he told reporters in Brisbane on March 17.

He also discussed the potential upward pressure on construction costs, given the destruction of buildings and infrastructure that will likely require extensive rebuilding.

“We made a heap of progress on inflation numbers in the building sector, but we can anticipate some upward pressure on building costs as a consequence [of the cyclone],” he said.

In response to the damage, the federal government will contribute $1.2 billion in additional funding, which will be included in the upcoming budget.

“That new $1.2 billion will be part of $13.5 billion total in the Budget to respond to and rebuild after natural disasters,” Chalmers said.

Australian Treasurer Jim Chalmers speaks at a press conference inside the Budget lockup at Parliament House in Canberra, Australia on May 14, 2024. AAP Image/Lukas Coch

Near $27 Billion Deficit

The Mid-Year Economic and Fiscal Outlook is set for March 25 with Chalmers saying the country’s economy would be on the right path.

“The budget will show that the economy is turning the corner, and we are on the right path.”

This statement comes amid a forecasted deficit of $26.9 billion for the current financial year, with the shortfall expected to rise to $46.9 billion in the 2025-26 financial year.

In addition to the immediate impacts of Cyclone Alfred, Chalmers pointed to global economic uncertainty as another significant factor that is impacting the country’s .

The uncertainty is compounded by several international factors, including a weakening Chinese economy, ongoing conflicts in Eastern Europe, and geopolitical tensions in the Middle East.

“We’ve got what’s happening in D.C. We’ve got a weaker and slowing Chinese economy. We’ve got a war in Eastern Europe. We’ve got a tentative ceasefire in the Middle East,” Chalmers said, underscoring the multitude of external factors contributing to global economic instability.

However, when pressed, Chalmers admitted that this budget would see a deficit.

“Even this year, when we will be printing a deficit for this year, it will be much, much smaller than what we inherited from our political opponents, and that shows the progress we have been able to make,” he responded referring to his two budget surpluses in past.

Opposition Says Public Bearing Brunt of Labor Policies

Shadow Treasurer Angus Taylor accused the Labor government of “raiding household budgets” to cover its spending, particularly in light of the deficits forecast for the coming years.

Taylor argued that the Australian public is bearing the brunt of the government’s mismanagement, pointing out that the average worker paid $3,500 more in taxes last year than before the Albanese government took office.

“What we’ve seen here from Labor is that they are raiding household budgets, $3,500 for the average Australian, $7,000 for double-income families,” Taylor told Sky News.

He further criticised the government’s inability to manage its budget effectively.

“There’s an old saying that when left-wing governments run out of money, they come after yours. And that’s exactly what we are seeing right here,” Taylor concluded.

Disaster Recovery Payments for Affected Residents

Meanwhile, government announced additional relief for the cyclone hit areas.

Residents in Bundaberg and Toowoomba will soon be able to access the disaster recovery allowance, announced Emergency Management Minister Jenny McAllister.

The one-off payment will provide $1,000 for each eligible adult and $400 per child, providing immediate financial relief.

The allowance is designed to offer short-term income support to individuals who have lost their income due to major disasters.

McAllister also announced that residents in several other affected areas will be eligible, including those in Brisbane, Ipswich, Moreton Bay, Toowoomba, and Somerset in Queensland, as well as Clarence Valley, Richmond, Bellingen, and Kyogle in New South Wales.