Australian state a disaster zone after flooding

Parts of northeastern Australia have been declared a disaster zone after flooding from days of torrential rain.

The worst floods in half a century in Australia have inundated towns across the state of Queensland, forcing the evacuation of entire communities as dams larger than Sydney Harbour threaten to breach their banks.

The Australian government promised aid to the worst affected and provided two Black Hawk helicopters to help evacuate all 300 residents from the inland town of Theodore.

The office of Prime Minister Julia Gillard announced that 31 of Queensland's 73 communities were now receiving government disaster assistance.

The coastal city of Bundaberg — declared a disaster area — was bracing for its highest flood peak in 50 years.

In Rockhampton, a city to the north, residents could face forced evacuations later this week as floodwaters rise. Emergency Management Queensland boss Bruce Grady told the media that Rockhampton would see "a significant flood, likely to close road and rail access."

The town of Dalby, three hours drive west of the state capital Brisbane, meanwhile, had just two days of drinking water left.

The rain has been falling on Queensland since Dec. 18. Forecasters predicted the weather would clear over the next 48 hours, but water built up in river catchment areas meant the worst of flooding in some areas was still to come.

Economists estimate the floods will strip up to $6 billion from the national economy, as ruined crops and water-logged mines are expected to depress export volumes over the next three months.

Although a recovery in exports is expected later next year, the flooding was likely to push up food prices, increasing inflation.

AMP chief economist Shane Oliver told The Australian newspaper that the floods were pushing up prices of some rural commodities such as wheat and sugar, as well as coal, and this would offset the effect on national income. He said there would be a noticeable effect on export volumes that could pass 0.5 per cent of GDP, or $6 billion.

Australian Treasurer Wayne Swan said this week: "There's no doubt the flooding we've seen in parts of eastern Australia is hurting our farming sector, and parts of other industries such as mining are also being affected."

AgForce grains president Wayne Newton said the floods had knocked $400 million from the value of winter crops yet to be harvested and that the effects of the flood would continue into next year.