The Bush fires
The widespread bush fires all over Australia have spread havoc to the country having already charred over 8.4 million hectares. Because of the mass devastation of the bush fires, the Australian economy has taken a massive hit in many sectors. Agriculture has been significantly halted in terms of production with other income producers like tourists and international dealers have been declining. Australia has lost many resources and money trying to combat the never ending onslaught of the fires. The working class citizens are also reducing the amount of income being made due to the poor conditions and social consequences of the fires. AMP capital chief economist Shane Oliver estimates that bush fires could cut between 0.25 to 1% of GDP growth. The last quarter only lost about 0.4% of GDP growth. This shows the potential of the amount of damage the bush fires can have on our economy.
Agricultural impacts
The sector that the bush fires are harming the most is agriculture. The bush fires are so intense that it is affecting the macro economy due to so much farmland and properties being burnt down. The Australian economy is taking a massive toll on both the amount of money is being outputted and the social image. Due to the amount of farmland being destroyed, the amount of food being produced has dropped significantly. Not only do we lose the food that we were growing but we also lose time waiting for the farmland to be reusable again; along with money to repair the land. Farmers in NSW, Tumut, states that it will take years for farms to produce the same amount as they used to; saying that apple orchards will take 5 years and pine farms taking 20 years. The decrease in food supply means that the price of foods will increase dramatically. This means that Australia will rely more on imported foods. However due to Australia receiving less imports(for reasons such as corona virus); the prices on food will only increase from now on. It will take many years for the price of food to decrease to what it used to be.
How we are affected
The effect on tourism and the working class from the bush fires will severely limit the output of goods, services and money. Unluckily, the time the bush fires started coincides with the peak of the amount of tourist coming to Australia. Less tourists are coming due to the appalling conditions of air, transport and power (for example some highways in Australia were closed for 12 days). Because of this decrease in tourism, the income coming from tourism is decreasing; resulting in less money for the Australian economy. Until these problems are fixed, tourism is going to keep decreasing resulting in less money. The public in Australia is also being negatively affected by the bush fires. The air quality is damaging the health of the working class; affecting their ability to work. Sydney loses between $12 and $50 million each day due to the disruption of the haze (including sickness, transport disruption, accidental tripping of fire alarms).People are more likely to become sick and stay home, decreasing the efficiency of their firms. It is predicted that air pollution has contributed to 30% of people’s sick days. On New Year’s Day air quality index ratings were said to be at 7700 which is 40 times the recommended safe level of 200.
This will result in a massive drop in production and a massive drop in income for the economy. Producing goods and services is a key component in having an economy so if production is decreasing, then all sectors of the economy is affected. Areas such as exports and entertainment and so many other sectors will see a drop in income due to the decrease in workers.
More statistics on the effect of the bush fires include:
- Since January 8th there have been 8200 insurance claims worth about $644 million
- The Reserve bank is cutting their already record low interest rates from 0.75% to 0.5%
- Canberra hotels have lost 15% in bookings during the bush fires
- By the 16th of January, experts predict that the economy has lost about $3.5 billion
- The NSW rural fire service has around 70 000 volunteers. Some areas of the bush fires make it too expensive to deploy paid fire fighters so many volunteers are needed
Conclusion
The Australian bush fires have disrupted the flow of the Australian economy. All areas of the economy have been affected in one way or another. The bush fires have drained a lot of the existing resources that we already had and have lost even more to repair the damage. Environmental damage this large must be taken seriously if we are to recover from this natural disaster and we must focus on making sure this never happens again.
References
https://www.aljazeera.com/news/2020/01/australian-bushfires-blazes-toll-economy-200116103729989.html
https://thediplomat.com/2020/01/up-in-smoke-australias-bushfires-darken-economic-outlook/
Year 11 MHS Economics 2020 
Good post. Used statistics and was not illiterate. Is also one of the bois. 10/10 – 2/10 for jooden reasons. 8/10.
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Following up on namlecn’s comment, I will (have to) comment on the actual topic of the blog (Kaderle made us do this). how long will it take the environment and the economy to recover from these bushfires?
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