Federal Treasurer - Australia Faces Worst Drought In Its History - Age

[hatrack]

AUSTRALIA could be facing its worst drought this summer since records began, leaving hundreds of farmers dependent on government assistance, federal Treasurer Peter Costello has warned. In an interview with The Age, Mr Costello flagged new measures to make it easier for farmers to claim drought relief, in a season when many are likely to have no farm income at all. He also signalled a turning point in Australia's economic cycle, saying the record commodity prices that have powered the economy since 2003 have now peaked, and will fall in the next two years.

Mr Costello said this would end the huge revenue windfalls for the Government, but give welcome relief to households, retailers and the economy, with petrol cheaper and less pressure on inflation — and hence, implicitly, on interest rates. But the Treasurer saw no relief ahead from the drought. He warned that it would be "very severe, worse than people have anticipated".

The drought has revived to a new level of intensity this year. For the six months to September, the Bureau of Meteorology's maps show most of Victoria in a red zone of rainfall "very much below average". It is similar in other states. October is normally a wet month, but so far virtually no rain has fallen in the vast Murray Darling basin. The bureau said yesterday that climate patterns in the Pacific "are typical for the development phase of an El Nino event" (implying a drought ahead). "The material that's coming back to me is that this could be the worst drought we've ever suffered," Mr Costello said. "It looks like we are gearing up for a very hot summer.

"In eastern Australia, and in a good part of western Australia, there is going to be no crop. I am told that it's already too late in eastern Australia. Even if the rain came tomorrow, it's too late for a crop." In a speech the previous night to the Energy Supply Association of Australia, Mr Costello, while endorsing Government policy on global warming, added a strong personal view that reducing it should be a priority along with economic growth. "My view is that, as the hottest and driest continent on Earth, we have an interest in not making Australia hotter or drier," he told energy industry leaders.

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Gee, Mr. Costello, ya think?

http://www.theage.com.au/news/national/worst-drought-ever-tips-treasurer/2006/10/11/1160246197015.html