China tensions to hurt QLD’s virus recovery
Even as businesses celebrate COVID-19 restrictions easing and borders reopening, China is looking elsewhere for its coal – and that could hurt Queensland’s recovery.
QLD Politics
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QUEENSLAND’S COVID-19 recovery could be hurt by growing tensions between Australia and China, with Beijing increasingly turning to Russia and Mozambique for its coking coal, a top economist is warning.
The Deloitte Access Economics business outlook report, to be released today, will warn that Australia’s economy bouncing back quickly will depend on whether Melbourne can get the growing coronavirus outbreak under control.
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While consumers buoyed by Australia largely escaping the worst of the virus have been spending more than forecast in March, they could be spooked if Melbourne’s outbreak runs rampant.
But Deloitte’s leading economist Chris Richardson found Queensland’s resources boom which has helped shield it so far could be coming down.
Coal and gas prices are dropping and China’s threat’s raise “a big question mark over the head of Queensland’s biggest customer”.
“This uncertainty extends not just for trade, but also for tourism and international student numbers,” Mr Richardson said.
“The prices of Queensland’s major commodity exports – coal and gas – have also been left wanting.
“While coal prices have been falling for a while, the global COVID-induced slowdown in industrial production is a worry.”
He said this compounded by China increasingly turning to Russia, Mongolia and Mozambique for its coking coal supply.
Queensland has about $28 billion in trade exports with China each year, not including education or tourism.
Mr Richardson said the JobKeeper wage subsidy had been effective in doing what it’s name promised but would need to be wound down in time, while he advocated keeping JobSeeker unemployment payments “stronger for longer”.
Opposition treasury spokesman Jim Chalmers said the report also showed of not “snapping back” in September by cutting of JobSeeker and JobKeeper entirely.
“The less done to protect jobs and support vulnerable workers, business and communities in the coming months, the harder and longer the recovery will be,” he said.
Both JobSeeker and JobKeeper are due to wind up at the end of September, but are currently under review.
The Federal Government has indicated it will release its plan for what it will do with these payments at it’s July 23 budget update, but JobKeeper is widely expected to be continued for some key industries like tourism and hospitality.