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Clean up begins in small Victorian town ravaged by floodwaters

A mammoth clean-up is set to get underway in the small Victorian town of Rochester, which has been completely inundated and cut off from other communities during the state's flooding crisis.

The floodwaters claimed the life of 71-year-old man Kevin Wills yesterday and have led to more than 160 rescues taking place in the town of just 3113 people.

Resident Darcy Craig, who sheltered in the town's flooded pub overnight, has told Today the past 48 hours have been a horrifying waiting game for the tight-knit community.

READ MORE: More warnings as floodwaters continue to inundate Victoria

"It's devastating," he said.

He said the main shock occurred yesterday, and that water levels peaked at about 3am on Sunday before now slowly beginning to recede.

"I've come out this morning and had a look. It's down to below ankle height, which is good," he said.

He showed footage of the town's local pub filled with water in all its rooms.

READ MORE: Why more Aussies are getting trapped in a 'mortgage prison'

Craig said the flooding had been "just another kick in the guts" for the rural township as businesses were still getting back on their feet following the impacts of the COVID-19 pandemic.

"The tight-knit community has only really – especially from the business side of things – only really just got over COVID and started opening doors again, started having functions."

Craig said the Rochester community was strong but would need all the help it could get to recover from the floods.

"They are a really resilient community here," he said.

READ MORE: Victorian residents furiously create sandbags as flood crisis continues

"I was just talking to the guy yesterday from Mitre 10 and he was saying they're going to help out a heap with getting people back on their feet.

"The more hands, the better. It's what's going to get it done and get it done the quickest, especially for businesses to be able to open again and trade again."

Craig has four units in the town that were flooded yesterday.

He visited them in a tinny yesterday to witness the damage himself.

Resident Brian Gemmill was reduced to tears when he discovered he had lost everything yesterday.

READ MORE: Victoria could see 'some of the largest evacuations' in the state's history

"Four feet now, everything's gone," Gemmill said.

The Rochester resident was comforted by a man who faced the same loss.

Dozens of residents have been evacuated on buses an hour away to Bendigo, more communities across the state's north continue to flood.

Residents can find the latest warnings and evacuation orders on the VicEmergency website and weather updates on the Bureau of Meteorology website.

Xi Jinping changed China. Today, he'll change it again

Every decade or so, China's political system is wrenched by change. Some of these events are headline-grabbing – the Tiananmen massacre of 1989 or the brutal crushing of the Falun Gong spiritual movement in 1999.

Others are more subtle, such as the eruptions of 2012, when China's current leader, Xi Jinping, took power. That year included the toppling of a major Communist Party leader, the disgrace of a senior political adviser and the revelations that the family of the country's beloved premier accumulated billions in wealth during his tenure.

By contrast, this year seems quiet. There are reports that Chinese leader Xi Jinping is being challenged by his premier Li Keqiang, or that he is under pressure because people are fed up with the country's relentless zero-COVID strategy. But, even if true, these are relatively paltry cracks in the façade.

READ MORE: UK spy chief says China's tech aims are a 'threat to us all'

Xi Jinping is going to Uzbekistan for his first foreign trip since COVID-19.

And yet 2022 actually marks a huge upheaval in Chinese politics – one that we're going to feel over the coming years. This will come in the form of clashes with democratic countries over foreign policy, a slower-growing economy and political uncertainty.

This upheaval isn't being driven by attacks on Xi but by Xi's own actions, which have upended a 30-year consensus over how to choose top leaders. That's because Xi is poised at the Communist Party congress, which begins today, to take an unprecedented third term in office, destroying a system put in place a generation earlier.

The evolution of China's term limits

The system was meant to protect China from the turmoil of the Communists' first decades in power. That era started with the founding of the People's Republic of China in 1949 and lasted until the death of its first leader, Mao Zedong, in 1976.

Mao ran roughshod over other leaders, subjecting China to wild swings in policy that caused tens of millions of deaths, fomented revolution abroad, and left the country poor.

The person who took over from Mao was Deng Xiaoping. During the 1980s Deng also imposed his will on China, casting aside leaders he didn't like. But as he approached the end of his life in the 1990s (he died in 1997), Deng set in place a system of centralised power softened by term limits.

READ MORE: Taiwan leader tells China war 'absolutely not an option'

Statue of Mao Zedong in Changsha (Getty)

Under Deng's system, the top leader's power came from holding three positions at the same time. In order of importance, they are: general secretary of the Communist Party, which meant the leader ran the political party that runs the country; chair of the Central Military Commission, meaning control of the military; and the title of "president" of China, which is a ceremonial post that means the person is head of state and thus gets a 21-gun salute abroad.

To make sure that this person didn't abuse this immense power, Deng set up an informal rule that the person get only two five-year terms. The leader would be appointed at a Communist Party congress – a national meeting held every five years. They would then be reelected at the next party congress five years later and retire at the third.

Then along came Xi

This system worked for Deng's two hand-picked successors, Jiang Zemin and Hu Jintao. Jiang retired more or less on schedule in 2002, as did Hu in 2012.

If Xi had followed this system, he would retire at the party congress this week. Not only that, but in fact we would have known his successor in 2017, just as we knew a decade earlier, in 2007, that Xi was going to succeed Hu.

Another part of Deng's system of orderly succession was telegraphing halfway through one leader's term who their successor would be. That was meant to forge consensus and prevent wild swings in policy.

READ MORE: Penny Wong warns of 'catastrophic' impact of Indo-Pacific war

Xi Jinping has been president of China since 2013.

But no successor was appointed in 2017, meaning we knew around then that Xi wanted a third term. His intentions became clearer in 2018 when China's parliament lifted term limits on the presidency.

Even though ceremonial, the post had term limits enshrined in the constitution. Changing the constitution to lift those limits made clear that come 2022, Xi was going to go for a third term as supreme leader.

What China will look like under Xi

So in some ways what is happening this year was set in motion years earlier, but it's still hugely significant. This will play out in ways that people around the world will experience in three important ways.

The first is in continued tension and conflict in foreign policy. Under Xi, China began projecting power beyond its borders. Under his watch, China massively built up its military presence in the South China Sea, constructed military bases in South Asia and Africa and instructed its diplomats to use very blunt, aggressive language in dealing with other countries – something known as "wolf warrior" diplomacy.

Most importantly, China took a new, harder-line approach toward Taiwan. In August, his administration released a white paper that carries a marked change in tone from previous white papers in 1993 and 2000.

Unification with Taiwan is now described as "indispensable" for Xi's key overarching policy goal of "the rejuvenation of the Chinese nation". That likely means more tensions with democratic countries over Taiwan and an increased threat of Chinese invasion.

Second is slower economic growth. Xi's government has initiated few market-oriented reforms, leaving huge swaths of the economy still in state hands. That's contributed to slowing economic growth during his decade in power and growing youth unemployment.

Over the past few decades, one thing that the world economy could count on was strong Chinese economic growth. That may no longer be the case.

Finally, China faces political uncertainty for the first time in decades. Even though Deng's system lasted only a generation, it did give China a period of political stability that it hadn't enjoyed in more than a century.

Older, not wiser

Superficially, this is still the case: Xi rules supreme, with no challenger in sight. China seems to be very, very stable.

But what of the future? Xi is 69 and cannot rule forever, but is not expected to anoint a successor at the party congress this week. Most analysts believe he will take a fourth term, too.

As Xi ages, and further tightens his grip, his circle of friends and advisors will inevitably shrink, as will his ability to process new information and new ideas.

We've already seen this in the Xi administration's decision to blindly follow its "zero-COVID" policy, despite overwhelming evidence that it is now counter-productive. Will this sort of inability to correct course become the norm?

In this situation, it's not out of the question to foresee a period of slow but steady decline setting in, with the leadership around Xi unwilling to engage in economic reforms or allow the sort of freewheeling intellectual life that in previous decades had allowed China to flourish.

Instead, repression is likely to continue, not only for parts of the country with large minority population, such as Xinjiang, but in the country's ethnic Chinese heartland.

During its nearly 75 years in power, the Chinese Communist Party has shown a remarkable ability to adapt. That's included massive course corrections, which set China on its current path to prosperity. Such changes, however, only took place during periods of crisis when the leadership was forced to make painful choices.

This week's party congress, however, signals the opposite: a government set to keep doing what it's been doing for the past decade, even though the country badly needs a change.

Why more Aussies are getting trapped in a 'mortgage prison'

As property prices continue to drop across Australia and interest rates trend upwards, some borrowers are finding themselves trapped in their current mortgages with no way out.

It's estimated the median house price in Sydney could drop by more than $175,000 by the end of 2023 while in Melbourne it could fall by more than $156,000, according to NAB forecasts.

This could trap new homebuyers with smaller deposits in a sticky situation, known as a mortgage prison, as the property market slumps.

Here we unpack what a mortgage prisoner is and how to get out if you are trapped.

EXPLAINED: Why are Australia's interest rates still rising?

What is a mortgage prisoner?

Mortgage prisoner is the apt term for a borrower trapped in their current mortgage who is unable to refinance their loan.

There can be a mix of factors leading to a borrower becoming trapped in their current loan including their home declining in value, interest rate hikes, or income changes.

Finance Brokers Association Australia director Peter White said banks assess a borrower's "serviceability" or how much you can afford to pay at a different rate.

For example, interest rates could sit at 5 per cent but the lender will look at your ability to pay up to 8 per cent.

Not only are the current interest rate rises driving more people into the trap but White said banks have "the nasty habit of repricing the back book".

"They look at existing customers and put their home loan rate 0.45 to 0.7 per cent above what other people are paying," White said.

This means people who are already in a mortgage prison become even further entrapped and White warned more and more people are getting stuck.

Why are more people becoming mortgage prisoners?

Interest rate rises are the common denominator for property prices falling and therefore more people getting trapped in their home loans.

The Reserve Bank of Australia has hiked interest rates six times consecutively. The cash rate now sits at 2.60 per cent as an attempt from the central bank to settle spiralling inflation.

READ MORE: Most Aussie homeowners worried about meeting mortgage repayments

So now with interest rates expected to continue to rise and property prices continuing to drop, more borrowers' loan-to-value ratios will be pushed out.

The loan-to-value ratio refers to the value of a home compared to the amount of money borrowed on a home loan.

For borrowers with a small deposit, if the value of their house declines and their equity (or more simply, how much of the house they own) falls below 20 per cent then the loan-to-value ratio could change.

The higher the loan-to-value ratio means the borrower becomes a higher risk and the lender is less inclined to allow them to refinance their loan.

"They are likely to have to pay lenders mortgage insurance, a cost that can run into the tens of thousands of dollars and could easily negate savings made from refinancing," RateCity.com.au said.

"In some cases, lenders might decide not to take them on at all due to their equity position."

Why are property prices falling?

Basically, as interest rates rise, mortgages become more expensive.

People will have less of the bank's money to spend and will compete for cheaper properties meaning the market needs to match that – equalling a property price drop.

READ MORE: Cost of living pressures become the biggest source of stress

The auction clearance rate has edged higher for two months in a row as home sellers reduce their price expectations to meet those of cautious buyers.

NAB forecasts that property prices will decline by 20 per cent across Australia's capital cities and the RBA is set to hike the cash rate again.

"Every time the RBA hikes rates, the maximum amount people can borrow from the bank takes a hit, and with a number of rate hikes potentially waiting in the wings, the drops in property prices are likely to continue," RateCity.com.au research director Sally Tindall said.

"In the boom, a 'fear of missing out' drove property prices higher. Now a 'fear of getting in', is having the reverse effect.

Will interest rates keep rising?

Short answer – yes.

The RBA is still trying to battle inflation and says it will "do what is necessary to achieve that", which means more interest rate hikes are on the horizon but by how much is not yet known.

"The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board's assessment of the outlook for inflation and the labour market," governor Philip Lowe said after the latest hike.

White predicts interest rates will rise another 75 basis points up to 3.35 per cent meaning home loans will hit around 5 per cent.

With the continual rises and property prices fluctuating, White added borrowers can get "trapped very quickly" if they're not aware.

So, what do you do to avoid becoming a mortgage prisoner and what do you do if you are?

Tindall said anyone stuck in a mortgage prison should still be negotiating with their lender for a better rate on their loan.

"This will help them make their monthly repayments, and potentially extra so they can break out of mortgage prison faster."

White said fixing your rate is an option to keep the future secure for a while which is what some borrowers did during the pandemic while interest rates remained low.

Otherwise, White recommended "just riding the wave" through the rate hikes but most importantly he said to seek independent financial advice from a mortgage broker as there is no one size fits all answer.

READ MORE: Another country could be poised to join Russia's war on Ukraine

Mortgage rates

"There is no easy answer to this. It's about getting the best guidance you can and working out the best outcome," he said.

"You need to look very critically and in detail about your circumstances and what you want to do, for example renovating, going on a big holiday, buying a new car, all those things you need to weigh up.

"That's where getting a professional to help is important."

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

Victoria could see 'some of the largest evacuations' in the state's history

A man has died, hundreds of homes have flooded and more than 60 alerts have been issued by emergency services as a flooding crisis grips Victoria.

The crisis has turned deadly after a 71-year-old man was found dead in floodwaters in Rochester in the state's north.

Kevin Wills, 71, was found in the backyard of his High Street property around 9.30am on Saturday.

READ MORE: Flood crisis 'not over', could last for days

Aerial images show extent of Wangaratta flooding.

Police said his wife found herself trapped but was rescued by emergency services and taken to a nearby relief centre.

As floodwaters continue to rise, emergency services chiefs have warned the state could experience "some of the largest evacuations" in the state's history.

Residents can find the latest warnings and evacuation orders on the VicEmergency website and weather updates on the Bureau of Meteorology website.

'We're not out of the woods'

Premier Daniel Andrews has warned Victoria is far from being "out of the woods" with more than 12 emergency warnings issued since 7am.

He warned communities such as Shepparton, Charlton and Echuca are "very likely" to see rising water and flooding over the next few days.

All three communities are being urged to evacuate, along with several others.

READ MORE: Rain easing after thousands of homes inundated or isolated

https://twitter.com/DanielAndrewsMP/status/1581128629513490435

"The most important thing is that while the skies might be blue, there's a massive amount of water in catchments that'll be moving down rivers in the coming days," he wrote on Twitter.

"That means this event is far from over."

Andrews said around the state there are about 500 homes flooded and more which are inaccessible.

"Those numbers will rise," he said.

"We've got 13 relief centres open for families that can't go home – and we're working with the Commonwealth government to get Mickleham open so they'll have a roof over their heads."

He said around 3000 families have applied for emergency payments which are being paid "as quickly as we can".

The premier also said he's written letters to bank CEOs, asking them to defer mortgage payments for those impacted.

"They've agreed," he said.

Floodwaters surge at Charlton, Victoria.

He expressed his condolences after the death of the 71-year-old Rochester man.

"I know how close-knit the Rochester community is, and this will be impacting you all," he said.

"Our hearts go out to you."

Meanwhile, an energy provider is warning if floodwaters reach "significant levels" and inundate substations at Mooroopna and Charlton "it could pose a serious safety risk, and customers could be without power for an extended period".

https://twitter.com/PowercorAust/status/1581103834062913536

More than 350 flood rescues

A renewed call for people not to drive through floodwaters and heed evacuation warnings has been issued.

"The consequences of not heeding a warning have been seen in some areas where we have responded to homes that were asked to evacuate and we have had to rescue people," Victoria Police Assistant Commissioner David Clayton said.

Clayton said there have been more than 350 flood rescues so far.

"More than 200 have been to homes, 150 to people driving through floodwaters and 10 to capsized tinnies," he said.

READ MORE: Woolworths says 2.2 million customers exposed in MyDeal data breach

Floodwaters at Rochester, Victoria.

Clean up begins for residents in Maribyrnong

Residents along the Maribyrnong River are beginning the mammoth clean up after floodwaters peaked on Friday.

In Maribyrnong, 60 properties were flooded and the only way to access parts of the suburb was by boat.

Damage from floods revealed in Maribyrnong, Victoria.

Maribyrnong MP Bill Shorten said residents have a "very resilient spirit" as they face the daunting clean up effort.

One of the biggest challenges will be the smelly mud that is slathered across roads, homes and driveways.

"Mud is a beast when it gets across the floorboards and it's smelly, it's a big job to be done here," Shorten said.

Shorten said the Maribyrnong River reached levels above residents' heads but the speed at which it broke the banks was "shocking".

Photo shows Solly and his daughter Serine cleaning up after the flooding of the Maribyrnong River. Solly has lived on Chifley Drive for 15 years and says this is by far the worst flood he has seen here.

Flooding crisis may ease for a few days before another storm hits

Emergency Management Commissioner Andrew Crisp said there will be stable weather over the next few days but on Wednesday a low-pressure system will hit the east coast.

"On Wednesday night, we could see falls in the north west and central Victoria of around two to 10mm," he said.

"There could be some storm activity with heavier falls around 20mm.

"On Thursday, we could see rainfall increasing so five to 10mm as it moves across into central Victoria and the north-east.

"We could see localised falls of 20 to 30mm.

"Friday, it's moving more across to the north east and we could see rainfall up to 50mm."

Aerial images show extent of Wangaratta flooding. Floodwaters in Elmore, Victoria.

Crisp said on top of the rainfall that has already occurred it could cause further flooding.

Meteorologist Jonathan How said the weather system will wreak more havoc next week.

"Even though we will see a few days of reprieve across Tasmania, NSW and Victoria, there is another weather system coming through from the west," he said.

"That will start to produce showers and thunderstorms across South Australia and inland Queensland from Tuesday and then extend to the rest of the East Coast from Wednesday to Saturday."

He added this weather system will bring renewed flooding for already saturated areas.

New South Wales

New South Wales currently has more than 60 weather warnings in place across the state.

As of 7pm on Saturday, this includes nine emergency warnings, 27 watch and act warnings and 28 advice warnings.

The NSW SES have directed people in parts of Narrandera South to evacuate due to impacts from moderate flooding, while emergency warnings are in place for parts of Forbes, in the state's central west.

Emergency warnings are in place for parts of Forbes in NSW central west.

Several watch and act alerts have also been issued for southern parts of the state, with flooding expected along parts of the Murray River.

NSW SES said it is monitoring conditions at Moama and will issue warnings as the situation evolves.

SES volunteers have been kept busy with two flood rescues and 93 requests for assistance across the day.

Residents can keep up to date with the latest warnings and safety advice on the NSW SES website.