Farmers will be on the frontline of climate change as droughts worsen and become more frequent, the treasurer has warned.
Crop yields could decrease four per cent by 2063 and cost the nation about $1.8 billion in GDP, Jim Chalmers said.
"All this means that the challenge of climate is global in scope but regional in impact," Dr Chalmers told a national drought forum in Rockhampton on Tuesday.
"We know that our farmers are on the frontline but you are resilient and innovative and the government is ready to support you."
A review of the Future Drought Fund, set up to support farmers and communities build drought resilience, has revealed its potential as well as practical challenges.
About $420 million has been allocated to drought resilience initiatives through the fund since June 2020 and a Productivity Commission report suggests these schemes are generally working as intended.
Yet the review found room for improvement, including the need for more integrated programs and better knowledge sharing.
"We agree, and that's why we want to share information more widely and effectively to help prepare communities for the changes that may be required in the long run," Dr Chalmers said following the review's release.
The report also highlighted drought was just one part of the climate change picture.
The pressures of a changing climate and "constant, cascading and cumulative" natural disasters will set the taxpayer back billions over coming decades, the treasurer said.
Disaster recovery spending has ballooned from $335 million to about $2.5 billion in the past five financial years.
"The latest analysis out of Treasury tells us that disasters and a warming climate have big, economy wide effects," Dr Chalmers said.
"They're making a big impact on the budget, especially when it comes to our disaster response."
Parts of Australia are preparing for the worst bushfire season since the Black Summer fires across 2019/20 after the Bureau of Meteorology officially declared an El Nino, which will bring drier days.
Damage from the Black Summer fires and October 2022 floods cost the economy about $3 billion.
Shadow treasurer Angus Taylor said disaster recovery was an important area of public spending.
"We also do need to do everything we can to prevent damage to property and the sort of damage that we get from those sorts of events," he told ABC radio on Tuesday.
Funding disaster recovery and other climate resilience measures would come down to taxpayers, he said.
"Which is why the government always has to look at every dollar it spends, make sure it's spending it well."
Greens leader Adam Bandt said the best thing Labor could be doing to prevent droughts and floods was to stop opening new coal and gas projects.
