In a preview to the Federal Budget, Australia's Treasurer Jim Chalmers said the cost of the ex-Tropical Cyclone Alred at around A$1.2 billion as clean up of the storm's destruction continues to take place.
Chalmers will also warn that that storm caused upward pressure on inflation due to businesses being forced to close during a speech to the Queensland Press Club on Tuesday.
The speech will take place around a week before his final budget is handed down before the Federal Election.
Chalmers said estimates point to a quarter of a percentage point hit to quarterly growth.
"We don't yet know the precise cost to our budget, but again it will be significant," he will reportedly tell the room.
"I expect that these costs and these new provisions will be in the order of at least $1.2 billion, a substantial amount of money and that means a big new pressure on the budget."
This will be added to the already budgeted disaster relief.
“At MYEFO, we’d already booked $11.6 billion for disaster support nationally over the forward estimates,” he will announce.
"With all of this extra funding, we expect that to rise to at least $13.5 billion when accounting for our provisioning, social security costs and other disaster-related support.”
Around 44,000 insurance claims have been lodged since the cyclone hit, which is expected to cost a further $1.7 billion and will be covered by the Cyclone Reinsurance Pool.
The treasurer also revealed that around 12 million work hours were lost during the cyclone due to power outages that impacted around 450,000 people and businesses.
The government has already co-sponsored affected states with $30 million in support for immediate recovery support.
Deloitte Access Economics predicts a deficit of nearly $50 billion in the 2025-26 Budget.
He is also set to outline the possible economic consequences of growing trade tensions, amid new tariffs implemented by United States President Donald Trump.
