Floods likely to leave heavy impact on Australian economy

The floods in Australia that have devastated huge swathes of Australia's eastern seaboard, including the nation's third-largest city, are likely to turn out to be the costliest natural disaster ever in the country known for its climatic extremes, treasurer Wayne Swan said on Monday.

However, the floods that have swept the major resource state of Queensland, over an area the size of South Africa, and across 46 towns in Victoria state would not delay a promised return to surplus in 2012-13, according to Swan.

The steep rebuilding and cleanup costs could necessitate painful spending cuts analysts say.

According to The Australian newspaper, the estimated cost of rebuilding the worst affected Queensland state has been projected at $10 billion.  The newspaper said on Monday, the damage bill would escalate as the waters moved south to northern and western Victoria.

"It looks like this is possibly going to be, in economic terms, the largest natural disaster in our history," he told Australian television.

"This is very big. It's not just something which is going to occupy our time for the next few months. It will be a question of years as we go through the rebuilding."