Knee-deep water inundated communities in south-east Australia today, splitting one town in two, as swollen rivers carried flood fears downstream and officials urged residents to evacuate.

The state of Victoria is the latest area of Australia afflicted to be hit in the weeks-long flooding crisis that has left 30 people dead, caused once a century floods in many areas and could become the country’s costliest natural disaster.

Horsham, in Victoria state, resembled a lake after the Wimmera river overflowed its banks and bisected the community before starting to recede several hours later. About 500 homes in the city, which has a population of 14,000, were surrounded by water.

Across north-central Victoria state, more than 3,500 people have left their homes, with 51 towns and 1,500 properties affected by the rising waters.

In north-west Victoria, floodwater has left 1,000 households without power, and thousands more homes face the threat of cuts as substations and low-lying power lines are submerged.

The Australian prime minister, Julia Gillard, announced the formation of a business task force to assist with rebuilding devastated infrastructure in Queensland.

A day earlier, she said the floods that ravaged Queensland could be the country’s most expensive natural disaster.

Most of the 30 people who died in Queensland were killed a flash flood that hit towns west of the state capital, Brisbane. The state’s flooding affected 30,000 homes and businesses, and left 12 people missing.

The price tag from the floods was approximately 5 billion dollars before waters swamped Brisbane last week.