Credit: Mick Pollard Unsplash
The damage from the current fires burning is expected to eclipse the $4.4billion hit that our economy took in 2009, this according to Moody’s credit rating agency.
Given the fires in 2009 burnt 450,000 hectares and the current fires have burned 8.4million hectares, news that the economic impact will also be greater, is unsurprising.
Already the unprecedented bushfires have had an impact on the supply of fresh fruit and vegetables. This impact will be short-term, however, the real impact is expected to last much longer.
Already around $1billion worth of insurance claims have been lodged, and as a result, premium raises have already been raised as a possibility. More claims are still expected to be lodged as further damage is more than likely.
Australia’s tourism has also been feeling the pinch, with popular holiday areas in East Gippsland (Lakes Entrance area) and the New South Wales south coast being devastated.
The bushfires have made international news and this risks scaring away international visitors.
An international advertising campaign featuring Kylie Minogue has been suspended.
Tourism Minister Simon Birmingham has sent the message to tourists that Australia remains a holiday destination ready for tourists to visit.
Domestic holidaymakers have already stayed away during the summer school holiday period. The commercial impact is still too soon to ascertain, but will be in the hundreds of millions of dollars.
Agriculture is another area where it is too soon to gauge. Over 100,000 sheep may have perished on Kangaroo Island alone. In Victoria around 6,000 beehives have been lost.
One of many decimated businesses, Australia’s only listed timber company, Kangaroo Island Plantation Timbers has announced more than 90% of timber has been destroyed and have voluntarily suspended trading.
Eli from ratings agency S&P said the chances of another interest rate cut have become more likely as a result of the bushfires, when they meet again in February.
Already low consumer confidence levels have taken a hit. With Australians already shying away from unnecessary discretionary spending, the widespread effects of the bushfires are added deterrents.
Confidence levels fell to their lowest level in four years.
The Morrison government have already pledged $2billion in fire relief, a figure which will put a dent in the long-promised budget surplus.
Morrison has backed away from the budget surplus, emphasising that “the surplus is of no focus to me. What matters to me is the human cost and meeting whatever cost we need to meet.
Rebuilding efforts could be delayed, since the fires are ongoing and the bushfire season is only beginning.
Australians have responded in typical generous fashion, with so many donations of goods that many charities’ warehouses are overflowing.
Donations of money are now suggested as the most effective way to assist.
Donations can be made at https://www.vic.gov.au/bushfireappeal