Treasurer Jim Chalmers has warned Australians to expect grocery prices to continue to climb after farmland in regional Victoria was hit by flooding.
Up to 9000 homes have been inundated by floodwaters in northern Victoria and another 34,000 are likely to be inundated or isolated across the southern state, according to Federal Emergency Management Minister Murray Watt.
“It feels like the hits keep coming,” Dr Chalmers told the Today show on Tuesday morning.
“There will be an impact on the economy and there will be an impact on grocery prices.”
“We have seen this before unfortunately where we see prices in our supermarket go up and that’s what we’re facing again.”
Milk is being poured out at dairy farms across the southern state as floodwaters have cut off transportation routes and made it impossible for trucks to collect the essential item.
“Milk collection on farm is definitely being affected,” United Dairy Farmers of Victoria president Mark Billing told 3AW radio station on Tuesday.
“It’s been an absolute massive job given all the road closures and damage. When the water is receding in some cases, roads just simply aren’t there.”
There are concerns it could lead to statewide shortages, with milk having to be dumped at some locations.
“If you can’t get it collected by the tanker, there is some milk that is getting dumped,” Mr Billing said.
However, he said that as Victoria primarily exported its milk, there was no urgent risk of a shortage, but he called on the government to declare a state of emergency and enlist the help of the army to get grocery items to Melbourne.
Dr Chalmers flagged that emergency payments to flood-affected residents would be “crucial” and will get out to those who need them as soon as possible
“There are payments which are already kicking in,” Mr Chalmers said.
The cost to the budget – due on October 25 – is yet to be fully understood with flood recovery likely to add significant pressure to what is already being described as a tough budget.
“We don’t know yet how many billions of dollars this flood and its recovery will cost,” Dr Chalmers said.
“There is obviously going to be a big bill and we will be there.
“As always if there’s more that can be responsibly done obviously we can consider that.”
Dr Chalmers said the government will move ahead with a “responsible” plan to tackle cost of living indicating that cheaper childcare and medicine as well as an extension of paid parental leave will form part of the budget.
“There will be a substantial impact on the cost of living and the budget and there’s no use pretending otherwise,” Dr Chalmers said.
“It’s not an easy balance to strike but we’re trying to strike it.”