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Key Points
  • A new Treasury analysis estimates natural disasters caused a $2.2 billion decline in economic activity in 2025.
  • Major disasters include Cyclone Alfred and widespread flooding in NSW and Queensland.
  • Retail trade and household spending were impacted and over 10,000 homes and businesses were damaged or destroyed by the disasters.
The cost of lost economic activity because of natural disasters in 2025 has been estimated at $2.2 billion, after Treasury analysed the impacts of Cyclone Alfred and floods across NSW and Queensland.
Partial data for the March quarter shows natural disasters particularly impacted retail trade and household spending.
The $2.2 billion figure is based on Treasury’s initial assessment at the time of the disasters and there may be rebuilding activity in future quarters.

The significant drop in economic activity is anticipated to predominantly affect the March quarter, as reflected in the March quarter National Accounts set to be published on Wednesday.

Treasurer Jim Chalmers said the government’s first priority was helping fund recovery and rebuilding for communities.
“The human impacts matter to us most but the economic cost is very significant too and we’ll see that in Wednesday’s National Accounts,” he said.

“Thanks to the collective efforts of Australians, resulting in lower inflation, reduced debt, and low unemployment rates, we are better poised to offer assistance when it’s most needed by communities.”

Nominal retail trade in Queensland fell 0.3 per cent in February and 0.4 per cent in March.
In volume terms, the Australian Bureau of Statistics Monthly Household Spending Indicator was flat in the March quarter, with a 0.2 per cent fall in Queensland contributing to this.
In early March, Tropical Cyclone Alfred crossed the coast on Moreton Island, and subsequently caused widespread damage and flooding to communities across South-East Queensland and northern NSW.
Prolonged downpours in southwest and central Queensland in late March and early April flooded a vast area spanning about one million square kilometres.
The government’s Disaster Assist website lists 27 separate natural disasters from January-May, consisting of flooding, storms, cyclones and bushfires.
Minister for Emergency Management Kristy McBain said the government was funding measures to increase resilience, adaptability and preparedness, and the Disaster Ready Fund initiative would provide another $200 million 2025-26.
“I have recently been on the ground in NSW seeing first-hand the effects a disaster can have, and it is my priority to work closely with all levels of government to ensure support is provided as quickly as possible,” she said.
“We have activated multiple disaster payments and we will continue to work with NSW on any other funding requests and I have been meeting with small business and primary producers who have been hit hard.”

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