Counting the cost of Australia’s raging inferno
Bushfire damage could be as high as $9 billion and trim .5% off GDP with worst of blazes still to come
Australia’s economy will take years to recover from the bushfires that have devastated four states since September, with the damage bill already estimated at A$5 billion (US$3.4 billion) and the worst of the blazes still to come.
There could also be a significant political cost, as Prime Minister Scott Morrison’s indecisive response and adamant refusal to acknowledge a climate change link to the fires have seen his popularity and support nosedive.
Twenty-eight people have been killed and at least 2,300 homes destroyed as the fires burned through 8.4 billion hectares (50,000 square kilometers) of mostly rural land in New South Wales (NSW), Victoria, South Australia and Queensland — a geographical area bigger than the entire territory of Denmark.
Losses will continue to rise, as the peak period of bushfire activity does not start until February, the hottest month in southeastern Australia. It is expected to drag on well into March unless there is rainfall; some areas have had heavy falls in recent days, but not enough to end the fiery crisis.
With insurance claims of A$1 billion ($690 million) already submitted for damage to private property, Westpac bank’s economics unit has calculated that the fires will trim between 0.2-0.5% off growth in 2020 alone.
“That would put the cost in terms of insured and uninsured losses at around $5 billion,” the bank said in a report, noting that the total bill from disasters is generally about double the losses from insured claims.
AMP Capital earlier forecast economic losses amounting to 0.25-1% of gross domestic product (GDP), or a range of A$3-13 billion ($2-9 billion), which could give Australia zero or even negative growth this quarter.
To date the most damaging bushfires were a 2009 inferno that ripped through southeastern Victoria, costing the state A$4.4 billion ($3 billion).
Westpac noted that affected areas this time, mostly on the south coast of NSW and the same region of Victoria burned out a decade ago, account for only 1% of the economy. However, they are major producers of fruit and vegetables, beef, seafood, timber and wine. They are also big tourism areas.
The tourist industry lost at least A$1 billion ($675 million) during the crucial Christmas holiday period due to cancellations— 100% in many destinations — and there is no doubt more to come.
About 60% of bookings in areas unaffected by the bushfires were also scrapped due to adverse media coverage worldwide.
“People have basically stopped travel,” Simon Westaway, executive director of the Australian Tourism Industry Council, told Reuters news agency. “And that’s absolutely understandable: human nature kicks in.”
Damage to telecommunications, power supplies, roads, bridges and other infrastructure is still being evaluated but will also account for millions of dollars, as will the loss of inventories and profits for thousands of small businesses.
Moody’s Analytics economist Katrina Ell said air pollution, which has affected 30% of the population, would result in reduced worker productivity, increased health spending, and lower crop yields. Moody’s, a ratings agency, has said the fires have been more destructive than the 2009 blazes.
Morrison’s conservative government, which staunchly backs fossil fuel use for power generation and rejects claims that climate change has aggravated the fires, was slow initially to respond to the disaster, though it has now offered more than A$2 billion ($1.3 billion) in emergency and reconstruction aid.
The prime minister left for a holiday to Hawaii as NSW was burning, returning only after a media outcry. He was then heckled by victims of the fires on the NSW south coast and criticized by state legislators in his own party.
A Newspoll survey, the first conducted since the worst fires began, found that 59% of respondents were dissatisfied with Morrison’s performance and only 37% satisfied. He now trails Labor’s Anthony Albanese by four percentage points, the survey showed.
Labor, the main opposition party, leads the governing coalition 51% to 49% in two-party preferred terms two years out from the next election. That spread could widen depending on Morrison’s perceived performance in handling the fires’ aftermath.
Morrison contends that it is not his government’s job to fight fires, but conceded that he “could have handled on the ground much better.” Now he has agreed to call a royal commission — the highest level of official inquiry — into the government’s response, providing more fuel to his critics.
Even as the summer fires are quenched, Morrison will continue to feel the political heat. Indeed, there are already rumblings that he may face a leadership challenge among his own ranks in the months ahead
A veterinary surgeon offers gum leaves to a mother and joey koala rescued from bushfires. Other koalas have had to be rescued from floods. Photo: AFP/Paul Crock
Fires, then floods: How much can a koala bear?
Koalas which were under threat from bushfires last week have now had to be rescued from a flood
One week ago, koalas at an Australian wildlife park were in the path of raging bushfires. On Friday, they were soaking wet and being carried to safety from flash floods.
Months of drought that have contributed to Australia’s catastrophic bushfire season have this week given way to huge downpours in some of the blaze-ravaged areas.
At the Australian Reptile Park on the nation’s east coast near Sydney, heavy rains on Friday morning sent torrents of water through its bushland setting.
Images released by the park showed soaking wet koalas clinging to gum trees, and a zookeeper carrying two of the marsupials to safety through rushing waters.
Water levels in the lagoon for the park’s alligators also rose up close to the top of the fence.
A zookeeper is seen leaning over the fence and trying to push an alligator back down with a broom as it stretches up in an apparent bid to escape.
“This is incredible, just last week, we were having daily meetings to discuss the imminent threat of bushfires,” park director Tim Faulkner said.
“Today, we’ve had the whole team out there, drenched, acting fast to secure the safety of our animals and defend the park from the onslaught of water.
“We haven’t seen flooding like this at the park for over 15 years.”
The bushfires, which began in September, have claimed 28 lives and are estimated to have killed more than a billion animals across eastern and southern Australia.
The wet weather this week has given exhausted firefighters a huge boost, helping to reduce or contain some blazes.
But dozens of fires remain out of control, and authorities have warned the crisis could worsen again with Australia only halfway through its summer.
“The contrast between the current bushfire crisis and this sudden flooding is striking,” Faulkner said.
“But we are well aware that a huge part of Australia is still burning, and millions of animals are still under threat.”
– AFP
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