Australian floods could increase employment, GDP
TEXT OF STORY
STEVE CHIOTAKIS: In Australia, the government’s announced a proposal for a temporary tax to help pay for damage from historic flooding there. The country’s reeling from heavy rains and high waters in Queensland State. That has economic repercussions around the world because of agriculture and coal that’s produced there. But the cleanup could also help the economy in Australia.
Gemma Daley is a reporter for Bloomberg News and she’s with us from the country’s capitol, Canberra. Good morning.
GEMMA DALEY: Good morning.
CHIOTAKIS: Give us an idea of what the recovery is going to look like over there.
DALEY: The recovery is going to be enormous. People have told me that the road rebuilding will be a project of which we’ve never seen before. Schools, have been washed away, culverts have been destroyed. Airports have been washed away. This is the biggest reconstruction Australia has ever been through.
CHIOTAKIS: What kind of money are we talking about here?
DALEY: The Federal government said today that their share of reconstruction would be $5.6 billion, but also that’s very preliminary figures. The water hasn’t actually gone down in a lot of areas yet. And there are rising waters in other states like Victoria. Some economists have forecast that it will be more to the tune of $20 billion.
CHIOTAKIS: There are a lot of people who are suffering, obviously, in Australia because of this flooding. You say in your piece though there’s a stimulus working here. How will this recovery affect the economy there? That’s going to put a lot of people to work right?
DALEY: That’s right. And the government today also said they are going to make it easier for skilled migrants from overseas to come and work here. The unemployment rate is very low, and there labor shortages across Australia because of a mining boom to feed China’s appetite for resource. There are estimates from economists over 1 percent addition to GDP. Yet there are lots of ramifications, e.i. fruit and vegetable prices will go up because the loss of crops. In Queensland, many people have to rebuild or repair their house,on their tiles, on their bricks, on their curtains, on their couches and televisions, so there will be some increase in the demand for consumers in Queensland.
CHIOTAKIS: Gemma Daley, reporter for Bloomberg reporting from Australia for us, Gemma, thank you so much.
DALEY: No problem thanks Steve.
You can view Marketplace’s photo gallery of Australia’s recovery efforts here.
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