Photo by @catrionawallace via Twitter

Australia’s devastating bushfires have taken a huge toll on human life, some of the most stunning parts of this country, and on precious native animals with hundreds of species now feared extinct or facing extinction. Politicians increasingly realise they need to be on the right side of history as the world looks aghast at the Australia fires. But it’s the long-predicted economic cost that’s now becoming abundantly clear that will hopefully force recalcitrant business groups to double down on efforts to minimise future environmental impact.

In line with predictions, the fires are a major blow for the economy, and the scale of the damage is only now starting to become apparent. There is no doubt the news will get worse as the flow on impacts come to light, but for now here is what we know.

Total insurance claims are approaching the $1 billion mark, with this figure set to climb as damage is assessed and fires continue to burn. A spokesperson from the Insurance Council of Australia said that since September about 11,500 insurance claims had been made in relation to the bushfires, amounting to $995 million in total.

Insurers have already indicated that increasing fire risks will continue to raise insurance premiums but that climate adaptation measures and keeping down fuel loads will help keep premiums affordable.

On Monday, Standard & Poor’s said that it expected to see a rise in mortgage defaults in bushfire affected areas due to unemployment in these areas. According to the AFR, the ratings agency also expects a drop in house prices, as seen in the wake of other disasters such as the California wildfires and the 2011 Brisbane floods.

Estimates from Westpac, as published in The West Australian on Monday, have the bushfires costing the Australian economy $5 billion in direct losses, with 0.2 to 0.5 per cent expected to be shaved off economic growth.

The bank puts the cost in terms of insured and uninsured losses at around $5 billion, with disasters typically amounting to double the insured loss in total. It also stressed that it’s still too early to accurately gauge the total cost to the economy because the extent of the damage is still unknown.

Economic losses will take the form of lost livestock and other agricultural damage. The fires have, however, mostly burned through forests rather than agricultural areas. Westpac expects the fires to wreak less economic carnage on the agriculture industry compared to the drought.

The tourism industry has also taken a “hundreds of millions” dollar hit as estimated by Australian Tourism Industry Council executive director Simon Westaway.

He told the ABC that cancellation rates were up by upwards of 50 per cent, and that “a perception the whole country’s on fire” is likely to deter tourists coming from overseas.

The federal government has announced $2 billion in disaster relief funding so far, with $100 million of that available as grants for bushfire affected primary producers, according to The Guardian.

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