SYDNEY, Jan 29: Australia ramped up its military response to deadly flooding in the country’s northeast on Tuesday, as troops prepared for a massive clean-up following storms which killed four and swamped thousands of homes.

Heavy rain and flooding triggered by ex-tropical cyclone Oswald have inundated the states of Queensland and New South Wales, with the most recent fatality a three-year-old boy killed by a falling tree.

In Queensland two men are still missing days after they failed to turn up for work, the Australian Associated Press reported.

The car of one of them was found fully submerged in a flooded creek west of the state capital Brisbane.

Tens of thousands have been left isolated or displaced by the torrents, but after rivers peaked in most areas late Tuesday waters began to drop gradually and troops started to prepare for a mammoth recovery effort.

“We’re planning to have some troops on the ground hopefully within the next 24 hours. It looks like waters will recede and we'll be able to gain access,” Brigadier Greg Bilton told reporters.

The sugar-farming town of Bundaberg was devastated as the swollen Burnett River peaked at a record 9.6 metres, with officials saying some 2,000 homes and 300 businesses had been flooded.

Queensland Police Minister Jack Dempsey said about 7,500 residents had been displaced by the floodwaters, with 1,000 people plucked from the roofs of their homes in daring evening rescues after the river broke its banks late on Monday.

“We did have a situation of fast-rising floodwaters and people being very rapidly isolated on ever-diminishing islands of ground,” Queensland Premier Campbell Newman said.

Prime Minister Julia Gillard said four military helicopters, 100 troops and three transport aircraft had been deployed to the emergency, with the evacuation of 131 patients from Bundaberg's hospital to Brisbane a priority.

Some of the most dramatic footage from the floods in Queensland showed a toddler being winched to safety in a bag from the back of a truck.

Robin Collie, 22, who is four months pregnant, said Tuesday she felt “sick”as her sobbing 14-month-old son Luke was lifted from her arms by a helicopter rescue team.

She had been driving to the town of Biloela in northeastern Queensland when her utility truck hit a submerged tree and stalled in rising floodwaters.

Luke was too small to fit into the rescue harness and had to be zipped into a waterproof equipment bag.

“The worst part was seeing him go up in the bag,” she told Seven News.

“(I felt) sick, it's your baby, it's your life. Putting him in a bag and zipping it up, God, above water that could carry him away.”There was limited flooding in Brisbane itself, but the deluge damaged water treatment plants. Newman warned that some of the city's reservoirs could dry up overnight unless people restrict their use to drinking, cooking and washing.

Insurers had already received some 6,100 claims from Queensland worth Aus$72 million (US$75 million), according to the Insurance Council of Australia.

Wild storms hit neighbouring New South Wales overnight, with floodwaters isolating 41,000 people and prompting authorities to order 2,100 people to evacuate from the town of Grafton.

NSW Premier Barry O'Farrell said the worst appeared to be over Tuesday evening, though towns downstream would face significant inundation in coming days.

“Now we are in recovery mode,” said Murray Kear, commissioner of the NSW State Emergency Service.—AFP