Queensland business affected by floods in the state will face an average revenue loss of $20,000, while others will face losses well over $1 million, according to the Chamber of Commerce & Industry Queensland.
Parts of Toowoomba have been submerged following dramatic flash flooding, with Brisbane’s CBD set to be hit by severe floods today. The latest deluge follows similar flooding across much of regional Queensland.
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Half of Queensland businesses have been directly affected by the flood, while the other half will be affected indirectly by lost trading through the flooding of transport infrastructure, suppliers or customers.
CCIQ president David Goodwin says on average, affected businesses anticipate at least a week’s lost trading. However, disruptions will be more medium- to long-term for some businesses.
“The indirect, longer-term impact of flooding on the revenue of some local businesses will be influenced by the pace of recovery of the tourism, mining and agricultural sectors, which in turn will depend on how quickly the full capacity of local transport infrastructure can be restored,” Goodwin says.
While most businesses will be insured for damage to physical assets, only 50% of businesses have insurance policies covering lost income.
“This implies that income loss will be the major issue for businesses affected by the floods. Business’ employment is expected to be impacted considerably in the short-term, with… a small percentage of businesses most likely having to reduce staff in the aftermath of the flooding,” Goodwin says.
“However, 90% of businesses will not record any long-term effect of the flood on their employment intentions.”
The CCIQ has called for greater government support for businesses affected by the floods including strategies to compensate for lost income.
The Queensland government has already received 1,000 inquiries from business owners and primary producers for emergency grants of up to $25,000 for temporary costs. Low-interest loans of up to $250,000 are also available.
The Federal Government has also announced a package for people who have lost jobs or who cannot return to work.
Prime Minister Julia Gillard says eligible people will be paid at the unemployment rate, of about $500 a fortnight, for more than three months.
Payments are also aimed at encouraging seasonal workers to remain in affected areas as businesses try to recover from the floods.
“It’s important economically for us to hold labour, particularly seasonal labour, in locations so that as communities move to recovery, they don’t immediately experience a skills shortage,” Gillard says.
Floods have affected grain, sugar, vegetables and fruit farmers, while small businesses in Gympie, Chinchilla and Rockhampton have been forced to close.
There appears to be no relief for Queensland businesses, with a recent report revealing Queenslanders have the highest number of bankruptcies in the country.
According to statistics for the December 2010 quarter, from Insolvency and Trustee Service Australia, insolvency numbers fell by only 2.1% in Queensland, despite a national decrease of 11.4%.
During this period, 2,289 Queenslanders became bankrupt, or entered into debt or personal insolvency agreements, as a result of the State’s poor performing property market.
Nationally, 7,871 people became insolvent in the December quarter, down from 8,884 in 2009.