The flooding is the product of our wettest spring/summer ever. With rainfall up-to 6 times the average. This is only a temporary respite however, as most of the country remains in drought, ironically due to our hottest/driest decade ever. Western Australia is currently experiencing a Cyclone and the south is currently experiencing a heatwave and snow (yes, you read that right).
Latest Update (1/1/11): The city of Rockhampton with a population of 75,000 is currently being flooded. The CBD is approaching 9 metres depth. Forced evacuations are currently underway via air. Road and rail are cut off. The military has been called in to deliver aid to cut off areas.
Euronews Video: http://www.youtube.com/watch?v=XPUrjfFss68
ABC News (with Audio and Video): http://www.abc.net.au/news/stories/2010/12/31/3104640.htm