Federal budget 2025: Cyclone Alfred’s $1.2bn blow to Qld

Treasurer Jim Chalmers warns Tropical Cyclone Alfred will deliver a $1.2bn hit to Queensland’s economy, and could add to inflation with the price of staples such as fruit and vegetables tipped to increase.

Cyclone Alfred will deliver a $1.2bn hit to Queensland’s economy, and could add to inflation with the price of staples such as fruit and vegetables tipped to increase, federal Treasurer Jim Chalmers has revealed.

The Logan-based MP will address the Queensland Media Club on Tuesday, one week before he hands down the Labor government’s fourth budget.

In an extract of the speech, seen by The Courier-Mail, Mr Chalmers will reveal a $1.2bn hit to Queensland’s economy from last week’s damaging Tropical Cyclone Alfred.

He will note the federal government has also co-sponsored $30m for recovery costs including repairing roads and infrastructure.

“This budget will reflect some of those immediate costs and we’ll make sensible provisions for more to come,” he will say.

“I expect that these costs and these new provisions will be in the order of at least $1.2bn, a substantial amount of money and that means a big new pressure on the Budget.”

In 2023 ex-tropical cyclone Jasper and the Gold Coast, Scenic Rim and Logan Christmas storms cost the state about $2bn.

December’s Commonwealth mid-year budget update booked $11.6bn for disaster support over the forward estimates, but Mr Chalmers will reveal it is expected to rise to at least $13.5bn.

“How we fund the recovery and rebuild communities is the first key influence on the Budget we’ll hand down a week from today,” he will say.

Treasurer Jim Chalmers

“We are still getting a handle on the economic fallout, but it will be substantial.

“The Budget will book Treasury’s best, initial estimates; an immediate hit to GDP of up to $1.2bn.

“This could wipe one quarter of a percentage point off quarterly growth.”

Mr Chalmers will note building and crop damage could put upward pressure on fruit and vegetables.

Some 44,000 insurance claims have been lodged, with early modelling suggesting losses covered by the Cyclone Reinsurance Pool of around $1.7bn.

“We don’t yet know the precise cost to our budget, but again it will be significant,” Mr Chalmers will say.

The March 25 budget is expected to feature fewer headline surprises than usual, with the federal government already announcing major investments such as $7.2bn for the Bruce Highway and holding other announcements until the election.

The Australian Government has also extended its Disaster Recovery Payment to the whole of Brisbane, Ipswich, City of Moreton Bay and Toowoomba, and to localities in the Scenic Rim and Somerset council areas.

Under the payment, a person suffering major damage to their home or serious injury as a result of ex-Tropical Cyclone Alfred is eligible for $1000 per adult and $400 per child.

Separately, the Disaster Recovery Allowance – offering up to 13 weeks of income support for workers and sole traders – will be extended to Bundaberg and Toowoomba.