Small businesses in flood-affected areas of Queensland will receive government grants of up to $25,000 to be used for clean up and recovery efforts, as the state battles its worst flooding in almost a century.
Prime Minister Julia Gillard and Queensland Premier Anna Bligh made the joint announcement yesterday, with grants to be made available immediately to 13 local government areas.
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The areas are Banana, Barcaldine, Bundaberg, Central Highlands, Cherbourg, Lockyer Valley, North Burnett, Scenic Rim, Somerset, South Burnett, Southern Downs, Western Downs and Woorabinda.
Gillard said the grants will help small business owners resume trading as soon as possible, including establishment costs in temporary premises. The assistance does not compensate for income losses and is not intended to replace insurance.
The grant scheme will run until September 30, 2011 and comes on top of assistance measures already announced by the two governments.
Concessional interest rate loans of up to $250,000 for small business operators and farmers, as well as freight subsidies of up to $5,000, are available across 23 local government areas.
People significantly affected by the floods can also access payments of $1,000 for each eligible adult and $400 for each eligible child under the Australian Government Disaster Recovery Payment.
Bligh said it is too early to determine the long-term impact of the floods, but thousands of Queensland families and businesses are already suffering.
Ivan Colhoun, head of Australian economics and property research at ANZ, says fresh fruit and vegetable prices are likely to rise in the March quarter as a result of significant damage to Queensland crops.
He says although the floods are extremely widespread and of record proportion, the long-term macroeconomic impact appears to be relatively small.
“It’s too early to be precise about the size of the impact on the Australian economy… [However,] financial markets are not assessing the floods as being a major economic event.”
Queensland Rail says the widespread and unseasonal rain is having an adverse affect on coal hauled, due to temporary closures across a number of coal systems and significant flooding of access roads across the state.
ANZ predicts the floods will reduce gross domestic product by approximately 0.25%, primarily as a result of lost exports.
“It’s important to remember that to the extent that it’s coal export delays, this will be only a transitory impact on exports and the economy, not a permanent one,” Colhoun says.