Floodwaters could cost Australia 1 percent of the GDP in damages

Australian Flood -- Emergency personnel patrol the flooded Bruce Highway by boat after the Fitzroy River broke its banks and inundated much of Rockhampton.

TEXT OF INTERVIEW

STEVE CHIOTAKIS: Nearly two dozen people have died and hundreds of thousands have been left homeless after the worst flooding Australia's seen in decades. And the Australian economy is also taking a big hit. Picture the size of Texas, and then add another half of that state, and you'll get an idea of how much of Australia is under water.

Reporter Stuart Cohen is with us from Sydney with the latest. Good morning Stuart.

STUART COHEN: Good morning Steve.

CHIOTAKIS: I want to talk about the latest affect on the national economy there. What's going on?

COHEN: Just a week ago the estimates were that the total cost both in terms of clean up and the loss of income were going to be around $5 billion, and that's roughly about half of a percent of the entire GDP of Australia. Now that number has been tossed out and they're talking about the cost more like an entire single 1 percent of the GDP which is pretty big for just one natural disaster. The project is now that this is going to cost more than the devastation of Hurricane Katrina did in the U.S.

CHIOTAKIS: And what about the cost beyond Australia's borders?

COHEN: The biggest affect worldwide is likely to be from the Australian coal mining industry. Australia is the world's biggest supplier of coking coal, which is used in the making of steel. They're are projections that the floods could remove over 5 percent of the coking coal from world markets this year, and analysts are saying that could raise prices by a third or more. And Queensland itself is also a big exporter of sugar, cotton and wheat, so in our big globalized economy, you remove on major producer like that and it's going to have an affect on prices of dozens of food products, manufactured goods, you name it.

CHIOTAKIS: Reporter Stuart Cohen in Sydney. Stuart, thank you.

COHEN: Steve, you're welcome.

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