Coronavirus could put $12 billion hole in Australia’s export revenues
It has already struck thousands of victims but coronavirus could be about to unleash even more pain — this time on Australia’s economy. Now experts are warning of “an enormous hit to trade”.
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Australia is staring down a $12 billion export hit from coronavirus amid warnings the crisis could trigger a recession.
As much as $4 billion could be wiped from minerals exports alone with the education and tourism sectors facing “catastrophic” consequences.
The nation’s elite universities are especially vulnerable with new figures showing more than 40 per cent of their first year enrolments are foreign students mainly from China.
Centre for Independent Studies adjunct scholar Salvatore Babones, whose has completed a report on Australia’s export exposure to the coronavirus epidemic, told the Herald Sun: “This is an enormous hit to trade — particularly for a country the size of Australia.”
“It’s potentially enough to tip Australia into a short technical recession,’’ Assoc Prof Babones said.
“It really depends on how these revenue losses propagate through the broader economy as a whole.”
Assoc Prof Babones’ report, out on Wednesday, estimates lost export revenues of between $8 billion and $12 billion even if the coronavirus epidemic is over by June.
It equates to between 0.4 per cent and 0.6 per cent of Australia’s gross domestic product, but the actual losses could be higher.
The air travel, tourism and education services industries have all been deemed at high risk of disruption.
Mineral export revenue losses could hit $4.1 billion across a six-month epidemic, while the education and tourism sectors faced losses of $3.7 billion and $1.9 billion respectively.
“This is unprecedented for Australia,’’ Assoc Prof Babones said.
“China is our number one export market.
“This is a catastrophic event for education and tourism.”
Our elite universities will be hit hard by the virus because of their reliance on high fee-paying foreign students.
Separate new data shows overseas students, mainly Chinese, comprised 43.6 per cent of all first year enrolments at Monash University last year, up from 24 per cent in 2012.
The corresponding figures for the University of Melbourne University 41.1 and 27.3; Sydney University 45.6 and 22.8; and University of NSW 45.5 and 30.2.
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Dr Bob Birrell, from the Australian Population Research Institute, said the implications for the so-called group of eight universities and the economy were severe.
”They have extraordinarily high dependence on overseas students, most of whom are Chinese paying very high fees of $40,000-plus a year,” he said.
In 2017-18, the overseas student industry was Victoria’s biggest services export, worth $10.6 billion.
Australia exports to China totalled $175 billion last year, making up 9.3 per cent of GDP.