The economic damage from Australia Bushfires devastating almost the entire eastern seaboard is likely to exceed over $4.4 billion. Economists say that the fires would further cripple Australia’s already fragile consumer confidence. This would increase the changes of a rate cut in the coming months and cause damage to the economy. This damage would through increased air pollution and direct harm to industries such as tourism and farming. Plus, with the current weather conditions, wildlife will also face a tremendous amount of habitat inundation due to lack of food and water.
As of January 2020, the Australia Bushfires have charred at least 8.4 million hectares across the whole country. The damage caused by Black Saturday in comparison was around 450,000 hectares. So, you can imagine the toll this disaster has brought with it. Tourism is the lifeblood of the New South Wales’s South Coast. There is a concern if it would recover before the next bushfire season.
The 2009 Australia bushfires, which ripped through relatively densely populated rural areas north of Melbourne, killed around 173 people. The bushfires completely destroyed the town of Marysville which made the residents flee. So far, the death toll of this season is up to 25 with damages in many towns including Cobargo and Mogo on the NSW south coast. The bushfires also affected many parts of Victoria. However, the biggest impact of this disaster has been on wildlife. Research indicates that the bushfires have killed nearly 480 million animals and thousands have left their natural habitats.
The Aftermath of Australia Bushfires
The risk of there broader macroeconomic spillovers this season is high given the scale of the bushfires. Australia already had a big problem on its hands with the long drought which affected local industries and farmers. So, the fires have only made things worse. Damage to fresh produce has put upward pressure on consumer prices. Tourism bodies say that it will cost hundreds of millions of dollars to rebuild. There has been a significant decline in summer hot spots as smoke haze and safety uncertainty got a point where it kept the tourists away.
So far, the Morrison government has pledged $2 billion in fire relief. However, this money will flow over two years. Considering the circumstances, the ongoing fires will delay rebuilding for months. This is because this is usually the start of the bushfire season. The economic impact is most severe on Kangaroo Island, off the coast of South Australia, where tourists have been evacuated, farms devastated and timber plantations burned to a crisp. Kangaroo Island Plantation Timber told the stock exchange that the fires have affected 90% of its timber, which has burned the western third of the whole island.