Media File #3

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Queensland estimates flood bill to top $5b

28 Jan 2011, SMH

This article is touching on the elaborate price tag for the recent Queensland floods; at least 5billion dollars. To help reduce this huge deficit the Gillard government has devised a temporary tax rise and budget cuts. This will slow the economy because there will be less spending by consumers with more taxes and economic leakages like government taxation. On top of all that basic fruit item costs will rise as a result of damaged crops which will also slow economic growth. This shows that a natural disaster can damage the economy in some cases as much as a dramatic interest rate rise. The insurance companies will suffer the most from all this because they are billions of dollars to pay off to all the suffering holders; as a result premiums will also go up for unaffected insurance holders. This is more money for consumers to have to pay and further economic decline.