Natural disasters cost Australian economy an estimated $2.2 billion in 2025

Treasurer Jim Chalmers said the human impacts of recent disasters mattered the most to his government "but the economic cost is very significant too".

A person in an orange hi-vis jacket stands in front of a flooded street of shops.

Partial data for the first quarter of 2025 shows natural disasters particularly impacted retail trade and household spending. Source: AAP / Lindsay Moller / AAP

Key Points
  • A new Treasury analysis estimates natural disasters caused a $2.2 billion decline in economic activity in 2025.
  • Major disasters include Cyclone Alfred and widespread flooding in NSW and Queensland.
  • Partial data for March quarter shows disasters particularly impacted retail trade and household spending.
The cost of lost economic activity because of natural disasters in 2025 has been estimated at $2.2 billion, after Treasury analysed the impacts of Cyclone Alfred and floods across NSW and Queensland.

Partial data for the March quarter shows natural disasters particularly impacted retail trade and household spending.

The $2.2 billion figure is based on Treasury's initial assessment at the time of the disasters and there may be rebuilding activity in future quarters.

Most of the overall immediate loss in economic activity is expected to impact the March quarter, which will be reflected in the March quarter National Accounts, to be released on Wednesday.
Treasurer Jim Chalmers said the government's top priority was to help fund the recovery and rebuilding of communities.

"The human impacts matter to us most but the economic cost is very significant too and we'll see that in Wednesday's National Accounts," he said.

"Because of the progress Australians have made together in the economy, with inflation down, debt down and unemployment low, we're in a stronger position to provide support when communities need it most."
Nominal retail trade in Queensland fell 0.3 per cent in February and 0.4 per cent in March.

In volume terms, the Australian Bureau of Statistics' monthly household spending indicator was flat in the March quarter, with a 0.2 per cent fall in Queensland contributing to this.

Flooding in NSW in late May, from the Hunter to the mid-north coast, has left 10,000 homes and businesses damaged or destroyed. The Insurance Council of Australia reported that more than 6,000 insurance claims have been made.
In early March, Tropical Cyclone Alfred crossed the coast on Moreton Island and subsequently caused widespread damage and flooding to communities across south-east Queensland and northern NSW.

Prolonged downpours in south-west and central Queensland in late March and early April flooded a vast area spanning about one million square kilometres.

The government's Disaster Assist website lists 27 separate natural disasters from January-May, consisting of flooding, storms, cyclones and bushfires.

Opposition leader Sussan Ley will visit flood-affected communities on the mid-north coast on Monday with local MPs.
Emergency Management Minister Kristy McBain said the government was funding measures to increase resilience, adaptability and preparedness, and the Disaster Ready Fund initiative would provide another $200 million in 2025-26.

"I have recently been on the ground in NSW seeing first-hand the effects a disaster can have, and it is my priority to work closely with all levels of government to ensure support is provided as quickly as possible.

"We have activated multiple disaster payments and we will continue to work with NSW on any other funding requests and I have been meeting with small business and primary producers who have been hit hard."


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Source: AAP


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Natural disasters cost Australian economy an estimated $2.2 billion in 2025 | SBS News