Federal Government to spend $6bn on flood relief but fails to meet Premier Annastacia Palaszczuk’s request

The Federal Government expects flood relief will cost them a whopping $6 billion, but Prime Minister Scott Morrison has so far failed to meet the Premier’s demands for a split rebuild package.

The devastating floods in Queensland and northern New South Wales is expected to cost the federal budget $6bn, but cash to cover Premier Annastacia Palaszczuk’s demands to go halves on a $771m rebuild package has not been satisfied — yet.

Despite lodging her demands nearly a fortnight ago to split a rebuild package that included voluntary buy backs of homes in the direct firing line of floods, the release of the federal budget on Tuesday night revealed the Morrison government was yet to make a decision on the request.

Premier Annastacia Palaszczuk hasn’t had her demands just yet, despite lodging them nearly a fortnight ago. Picture: John Gass.

But federal authorities point to contingency plans — worth $3bn, or half of the total expected spend — to accommodate any other potential spending on the flood rebuild.

In effect, discussions with Queensland remain ongoing.

What the Budget does detail is the federal government’s expectation that $2.2bn will flow to households for income support, temporary accommodation and social services.

A further $665m is expected to go to businesses and farmers for repairs, new equipment and support services while $588.6m has been set aside for community clean-up and recovery.

But the “full cost of recovery and rebuilding will only become clear once the damage from the floods can be assessed” according to Treasury boffins, and “may not be completely realised for some years”.

“Nothing I can say can overcome the personal pain and loss of so many Australians,” Treasurer Josh Frydenberg said in his speech.

“Total support to families, farmers, small businesses, local governments and their communities is expected to exceed $6bn.

“It will deliver hope, work and the prospect of returning to a better life.”

The clean up in Brisbane is ongoing. Picture: Dan Peled

Overall the floods is expected to drag real GDP growth by about half a per cent in the March quarter due to a drop in mining, agriculture and accommodation activity among others.

But in the long term the increased spending to rebuild after the flood will be good for the economy.

In the short term though the rebuilding effort is expected to put additional pressure on the “already strained supply” of building materials and labour in the construction sector.

Originally published as Federal Government to spend $6bn on flood relief but fails to meet Premier Annastacia Palaszczuk’s request