Summer of disaster hits budget

The federal government is providing $6.6 billion to assist recovery efforts following the summer of disasters which hurt people and communities plus the budget bottom line.

The weather events knocked an estimated half a percentage point off GDP growth and adding in earthquakes in Japan and New Zealand, that rises of 0.75 per cent.

The budget overview says disasters were expected to directly reduce real production by $9 billion, with the Queensland coal industry losing an estimated $6 billion alone.

Agricultural production losses were estimated at $1.9 billion, adding about a half percentage point to inflation.

The government says infrastructure rebuilding will provide an important platform for economic recovery with the Commonwealth providing $5.4 million to the states for rebuilding infrastructure such as roads, bridges and public buildings.

All up, the federal government is providing $6.6 billion to support disaster recovery.

That's coming from the $22 billion in budget savings with the bulk, $4.7 billion going to help those in Queensland hard hit by record floods.

The government has already made an advance payment of more than $2 billion to Queensland . That includes $206 million to local governments to restore utilities and transport infrastructure and pay for the labour needed to rebuild.

More than $950 million is going to areas of far north Queensland hit by Cyclone Yasi.

The Commonwealth has made more than 700,000 disaster relief payments to people in urgent need of food, clothes and shelter. Sixty-one thousand people have received the Disaster Income Recovery Subsidy to replace lost income.

Budget papers say the government is ready to provide a $500 million advance payment to assist Victoria which was also hard hit by floods.

Over the next four years, the federal government plans to provide $379 million to other states to assist in recovery from natural disasters.