The bushfire season has begun months early and the government has pledged financial aid for despairing farmers, already laden with debt after five straight years of drought. Some may earn no income at all this year, and there are fears that the suicide rate in the countryside, which is already high, will soar further.
The federal Treasurer, Peter Costello, said the countryside was facing a "rural recession".
But some politicians and environmental groups say that sympathetic words are not enough. They point to the increased frequency and severity of drought-causing El Niño weather patterns, attributed to global warming, and to Australia's leading role in poisoning the Earth's atmosphere with greenhouse gases.
Australians are among the world's biggest energy consumers, and the country is one of the top per capita producers of carbon dioxide emissions. Nonetheless, it is one of only two industrialised nations, along with the United States, that has refused to sign the 1997 Kyoto Protocol, arguing that it would harm the economy.
Now the economy looks likely to get a good shaking, as a result of the unseasonably high temperatures and pitifully low rainfall in recent months.
In New South Wales alone, 92 per cent of the state is officially in drought, and farmers have begun offloading stock before the hot, dry summer sets in, forcing them to buy feed and water. Sheep sales in the state are 70 per cent higher than last year, and at one saleyard last week, a record 67,000 sheep were sold in one day.
Agricultural economists, meanwhile, have slashed their winter crop forecasts by more than a third, and wheat exports have been suspended to meet domestic demand.
While some farmers are braced for their first total crop failure in half a century, consumers in urban areas are being warned to expect significantly higher food bills.
The Prime Minister, John Howard, said the drought would almost certainly affect gross domestic product, which has been growing at an unprecedented rate for more than a decade. But he urged Australians to retain a sense of perspective, saying that "the country overall is still doing very well".
Bushfires, meanwhile, were raging throughout south-eastern Australia yesterday, although summer does not officially start for more than six weeks, and fires of this ferocity are not normally seen until after Christmas.
With the vegetation tinder-dry after one of the driest winters on record, hundreds of fires were burning across four states, fanned by high temperatures and strong winds. Much of the south-east was on an extreme fire danger alert. In Tasmania, scores of homes were threatened by fires advancing on the suburbs of Hobart, the state capital, this week.
Scientists warned the bushfire threat would increase over coming decades, as climate change brought more frequent hot weather, accompanied by less rainfall.
Penny Whetton, of the government's own scientific body, the Commonwealth Scientific and Industrial Research Organisation, said: "The frequency of days of very high fire danger are increasing 20 to 30 per cent over the next few decades."
Phil Koperberg, New South Wales fire service commissioner, said it was "virtually unheard of" to have fires at this time of year in places like the Snowy Mountains and Kosciusko National Park. "I've been in the business for 40 years ... it's a spectacularly unusual event," he said.
Some scientists and environmental groups are predicting that the drought is here to stay, and are calling for better land and water management practices.
Australia is one of the world's driest continents. But a national audit of water resources, released yesterday, found that dwindling water supplies were being wasted, despite restrictions imposed in six major cities, including Sydney.
Thanks to the drought, dams are drying up. One dam alone in New South Wales has lost a volume of water equivalent to Sydney Harbour, because of evaporation. River beds in bone-dry rural areas are empty and cracked. One newspaper yesterday carried a front-page photograph of a little girl jumping over a muddy trickle on her parents' property - all that remains of the once powerful Darling, Australia's longest river. The river is part of the Murray-Darling system, which feeds the country's food basket. The National Climate Centre warned that without rain, the rivers will soon run dry.
The leader of the Green Party, Bob Brown, blamed government policies for helping to create the bushfires and droughts. He accused Mr Howard's conservative government of encouraging Australian industries to burn coal, while starving renewable energy scientists of funding.
Greg Hunt, the parliamentary secretary to Ian Campbell, the Environment minister, said thatAustralia was meeting international targets for reduced greenhouse gas emissions, and investing in renewable energy and clean coal technology.
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