ForexTV NewsDesk | January 30 2013 4:45 EST
ForexTV.com (New York) by Kaveh Eslampour
The Insurance Council of Australia has declared a state of catastrophe for Queensland. The AUD has fallen sharply today on the heels of tropical cyclone Oswald and a mounting political standoff.
Last week, tropical storm Oswald struck eastern Australia, causing widespread flooding and property damage. The storm has caused five confirmed deaths and at least A$126 million (US$131.6 million) in damages.
The Insurance Council of Australia’s members are responsible for more than 90 percent of their county’s premiums. The first tropical storm of the season will hit Suncorp, IAG and QBE the hardest among local insurers. The companies’ stocks fell between 1.5 and 2.3 percent yesterday amid estimated insurances losses of A$44 million. The A$126 million dollar tab will add to the 4 billion in insured losses from natural disasters in Australia over the past two years.
The states hardest hit, Queensland and New South Wales, account for nearly half of Australia’s economy and experienced a roughly A$9 billion loss in output following cyclone Yasi in 2011. There are concerns that tropical storm Oswald could have an even more dramatic effect on the Australian currency and economy.
The turbulence Australians experienced the past two years due to natural disasters has been mirrored in the political arena. Despite the current crisis, political infighting continues to dominate the headlines. As Australia’s first female Prime Minister, Julia Gillard has led a tenuous Labor party minority.
Today, she announced that federal elections will be held in mid-September. The announcement kicks off what is expected to be a punishing nine month campaign season.
Within minutes of the announcement, Liberal-National coalition leader Tony Abbott took to social media to criticize the timing of the election. Shadow treasurer Joe Hockey accused Ms. Gillard of “timing the elections to obfuscate the results of the annual budget”, scheduled to be released later in the year.
These types of attacks have become the norm for Australian political system. Prime Minister Julia Gillard replaced Kevin Rudd in a 2010 party coup, and has been politically hobbled ever since. Last February her leadership was publically challenged by her former Foreign Minister, Mr. Rudd. In November, opposition leaders brought allegations of corruption against Ms. Gillard for her practices as a labor lawyer.
Former opposition leader and current member of Parliament Malcolm Turnbull voiced his opposition to the September 14th election date via Twitter, saying he was “deeply disappointed that Julia Gillard chose to hold the election on Yom Kippur – the most solemn and sacred day of the Jewish year."
In her announcement, she acknowledged that the patience of Australians had been tested by “months of boiling hot political debate.” However, the campaign season promises increasingly public affronts on Ms. Gillard’s political and economic policies, as well as her personal conduct.
Ms. Gillard remains confident she would win the election against Mr. Abbott. She boasts a strong environmental record, having passed legislation on a national carbon emission trading system and taxes for big mining companies.
For now, many Australians have more pressing environmental concerns. The recovery from Oswald and direction of the Australian economy will be colored by ongoing political tensions.
Forex research by ForexTV.com