Storms and heavy flooding could wash away Australia’s budget bottom line despite inflation levels receding.

Communities in far north Queensland and the state’s southeast have been battered by severe rain, while residents in Victoria, South Australia and NSW have been hit by storm activity.

The storms would affect the budget but it may be some time before the full impacts are known, Treasurer Jim Chalmers said.

“The human consequences of this heavy weather are what matters most but there will be consequences for our economy and for our budget as well,” he told reporters in Brisbane on Monday.

“We will get a clearer picture of the economic and budget consequences of these natural disasters in the coming months.”

While inflation levels are below the peak of more than seven per cent at the end of 2022, the treasurer said figures were still expected to be volatile during early 2024.

November’s monthly inflation data will be released on Wednesday.

“Inflation has come off substantially since its quarterly peak before the 2022 election and since its annual peak around this time last year,” Dr Chalmers said.

“We have been making some encouraging progress overall, but that progress isn’t always in a straight line.”

October’s inflation was 4.9 per cent.

The inflation figures will follow wages increasing at their fastest rate since 2009.

Aggregate wages grew by four per cent in the year to September 2023, Treasury figures revealed on Monday.

Wages in the lowest paid and second-lowest paid categories increased by 6.7 and five per cent respectively during the same period.

“We’ve seen a couple of quarters now of real wages growth, we want to see more of that,” Dr Clamers said.

“These new numbers show that we’re making welcome and encouraging progress.”

But people weren’t feeling the increase, which had been eaten up by inflation, Opposition Leader Peter Dutton said. 

“Families are doing it tough at the moment, people are struggling to pay their power bills, they’re struggling to pay their insurance premiums, they’re struggling to fill a car,” he said. 

“Small businesses know that there’s a downturn in the amount of money that people are spending in their businesses and people are really tightening their belts.”

A mid-year federal budget update released in December forecast wage growth to move ahead of inflation by early 2024.

By Andrew Brown, Dominic Giannini and Duncan Murray in Canberra