Rescuers save kids on bus

Swift-water rescue teams have saved 16 children after their bus was trapped by flash flooding in southern Brisbane in a huge storm dumping heavy rain on southeast Queensland.

The bus became stranded between two parts of a road that were rapidly flooding yesterday.

The Department of Community Safety says three crews including swift-water technicians used inflatable boats to ferry the children to safety.

The storm was expected to dump up to 200 millimetres of rain on parts of the state's southeast. Torrential rain between Brisbane and Bundaberg was expected to cause flash flooding. The Mary River, in southeast Queensland, had about 40mm to 60mm of rain over a six-hour period.

The Brisbane City Council set up sandbag distribution points at four locations in the city as people prepared for heavier rain.

In New South Wales, about 70 locals were being evacuated from their homes after a tornado-style storm dumped asbestos and other building materials on parks, backyards and streets in Kiama.

Gale-force winds uprooted trees, stripped roofs and wiped out buildings as the storm front hit on Sunday.

"Seeing the roof of the fire station missing, seeing mature trees that look like they have been through a Mixmaster, seeing blue tarpaulins along a defined corridor: this is an event that you associate with a tornado going through parts of America," said NSW Premier Barry O'Farrell.

"What is clear is that it cut a path, it followed a path across the land."

More than 170 homes suffered damage of some kind and the State Emergency Services believes at least 10 homes have been destroyed.

Power was yet to be restored to a number of homes as emergency volunteers scrambled to put tarpaulins on homes before more rain predicted in the coming days.

After observing the devastation from a helicopter, O'Farrell said the Cabinet was working to declare it a natural disaster zone and he hoped assistance for homeowners, businesses and farmers would be unlocked within 24 hours.

Kiama Mayor Brian Petschler said about 70 people lived in the asbestos exclusion zone created by debris from the town's leisure centre and a number of houses, including one that "blew up" on the edge of town.

They were being evacuated yesterday and were expected to be allowed to return home in two days. "They will have to stay out of there until the area has been cleared," Petschler said. "We're very concerned and we've got major problems with the leisure centre, which is largely built of asbestos materials."

Born in flood

A newborn baby has been flown to hospital after his mother gave birth among rising floodwaters.

The 37-year-old delivered the boy before emergency crews could get to her property at Palmvale, near the NSW-Queensland border. Rescue crews eventually reached her by boat but a chopper from Queensland was called. The mother and baby were then airlifted to Gold Coast Hospital. The boy was named Sabre and both were in a stable condition.

-AAP