Victorian floods worsen as Gillard says disaster recovery costs won’t stop the budget returning to surplus in 2012-13

The Victorian floods have now reached a critical point, with officials warning residents in the city of Kerang to evacuate after nearby levees started to break, threatening to send rushing walls of water hurtling towards the town and surrounding areas.

Evacuation orders have also been issued for the towns of Warracknabeal, which is set between the Wimmera and Avoca rivers – both of which are continuing to rise.

But the immediate focus remains on Kerang. Early this morning SES officials warned the 4,000 residents of the town to evacuate as quickly as possible after the integrity of the nearby levees were seen to be under threat.

“The integrity of the town levee has been compromised in multiple locations,” a spokeswoman for a nearby incident control centre said. “The river is rising, that’s why we have advised people to leave now.”

The Loddon river is breaking under the levee in some locations, SES officials have said, with cracks appearing in other areas of the 150-metre construction.

“Remaining in your home or business will be dangerous and your life may be placed at risk,” an SES spokesperson told Fairfax this morning.

“Even if your home or business is raised it may become a refuge for vermin, snakes and spiders. There may be no water, sewerage, power, telephone or other services and you may be unable to call for help in an emergency.”

Residents in Warracknabeal are waiting today as SES workers expect over 140 properties to be hit, although some are already under water.

The rising floodwaters come just one day after Horsham was inundated, with thousands of residents forced to evacuate and hundreds of properties damaged by the waters. Although power was shut off to many residents yesterday and the CBD was effectively closed, emergency workers say the water is beginning to recede.

The waters are expected to affect towns and properties throughout the next 10 days.

Meanwhile, Prime Minister Julia Gillard has repeated her commitment to bring the Federal budget back into surplus during 2012-13, although various business leaders have said the Government should consider staying in the red temporarily.

Yesterday AIG chief executive Heather Ridout said Queensland and Victorian residents won’t “thank government for getting into surplus by a couple of dollars if they lose their jobs and their businesses shut down”.

Billionaire and flood recovery business taskforce leader Lindsay Fox agreed, saying: “Whether we finish up in a deficit or in a positive balance, it’s more important that we’ve got everyone in Australia working”.

Opposition leader Tony Abbott has also called for the Government to drop the National Broadband Network.

”It’s time for the government to stop spending on unnecessary projects so that it can start spending on unavoidable projects such as the reconstruction that will be needed in Queensland and perhaps in Victoria as well,” he said. His comments were backed by the Business Council of Australia.

But Gillard has remained adamant the surplus will be seen next year.

”That’s my position and the position of the government,” she said yesterday. ”This is going to be a huge task and it’s going to require tough choices, [but] we will work through to make those tough choices.”

Meanwhile, ACMA has warned businesses and individuals to remain aware of spammers and telemarketers using the Queensland flood fundraising appeal to steal money.

These scam emails and text messages appear to be genuine, and may have even copied text from government websites or other literature.

“The ACMA advises that consumers should not respond to, or click on any link, in any email or SMS they have received from an unknown source,” the regulator said in a statement. 

ACMA says the scam emails and messages usually appear to come from unusual email addresses, often contain poor spelling and request to receive funds through a money transfer.