Storms and heavy flooding could wash away Australiaās budget bottom line despite inflation levels receding.
Communities in far north Queensland and the stateās southeast have been battered by severe rain, while residents in Victoria, South Australia and NSW have been hit by storm activity.
The storms would affect the budget but it may be some time before the full impacts are known, Treasurer Jim Chalmers said.
āThe human consequences of this heavy weather are what matters most but there will be consequences for our economy and for our budget as well,ā he told reporters in Brisbane on Monday.
āWe will get a clearer picture of the economic and budget consequences of these natural disasters in the coming months.ā
While inflation levels are below the peak of more than seven per cent at the end of 2022, the treasurer said figures were still expected to be volatile during early 2024.
Novemberās monthly inflation data will be released on Wednesday.
āInflation has come off substantially since its quarterly peak before the 2022 election and since its annual peak around this time last year,ā Dr Chalmers said.
āWe have been making some encouraging progress overall, but that progress isnāt always in a straight line.ā
Octoberās inflation was 4.9 per cent.
The inflation figures will follow wages increasing at their fastest rate since 2009.
Aggregate wages grew by four per cent in the year to September 2023, Treasury figures revealed on Monday.
Wages in the lowest paid and second-lowest paid categories increased by 6.7 and five per cent respectively during the same period.
āWeāve seen a couple of quarters now of real wages growth, we want to see more of that,ā Dr Clamers said.
āThese new numbers show that weāre making welcome and encouraging progress.ā
But people werenāt feeling the increase, which had been eaten up by inflation, Opposition Leader Peter Dutton said.
āFamilies are doing it tough at the moment, people are struggling to pay their power bills, theyāre struggling to pay their insurance premiums, theyāre struggling to fill a car,ā he said.
āSmall businesses know that thereās a downturn in the amount of money that people are spending in their businesses and people are really tightening their belts.ā
A mid-year federal budget update released in December forecast wage growth to move ahead of inflation by early 2024.
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Andrew Brown, Dominic Giannini and Duncan Murray
(Australian Associated Press)