Coronavirus, bushfires could slow economic growth

Treasurer Josh Frydenberg warns the decision to shut the borders to China and the ongoing bushfire disaster will have a ‘significant impact’.

Passengers arrive at Melbourne Airport on Sunday. Picture: Stuart McEvoy

Josh Frydenberg says the coronavirus and the bushfires will have a “significant impact” on the economy.

There is increasing pressure on the government’s ability to deliver a surplus in the May budget following the bushfires and the decision to stop inbound travellers from China from entering Australia.

The Treasurer said factors outside of the government’s control – especially the situation in China – would cause problems but it was still not clear what the extent of the damage would be. 

“What we do know is that these events outside of our control are going to have a significant impact on the Australian economy,” he said.

Melbourne Airport's arrivals board displays cancelled flights from China due to coronavirus. Picture: Andrew Henshaw

“China is a critical economic partner for us. They’re the greatest source of foreign students – over 200,000 into Australia. 1.4 million tourists.

“Together, those two sectors provide about $16 billion to the Australian economy. And they are the recipients of around 30 per cent of our trade.

“But it’s too early to give a definite view about the economic impact because we don’t know how severe and how sustained the virus outbreak is.”

Mr Frydenberg knocked back several questions on whether Australia would suffer a negative quarter of growth, but did not rule it out. He also did not rule missing the target of a surplus.

“When it comes to the outbreak of the virus, when it comes to the fires, when it comes to the floods. When it comes to the trade tensions between the United States and China, we can’t control those factors. But it does underline the importance of our disciplined economic management,” he said. 

“The economy has been resilient through tough circumstance that we can’t necessarily control. But the key point here is that you’ll see direct impacts. So trade, tourism, students. You’ll see indirect impacts.

“In terms of having a balanced budget, that’s a significant achievement. In terms of a surplus, you’ll have to tune in on budget night.”

Fires have torn through millions of hectares this summer, destroying countless properties, livestock and livelihoods. Picture: David Caird

The federal government will deny entry to Australia to foreign travellers who have left or passed through mainland China amid the rush to contain the global spread of the deadly coronavirus, of which 12 cases have been confirmed in Australia.

Australian citizens, permanent residents and their immediate family, legal guardians and spouses will be excepted from the strict measures, announced by Scott Morrison on Saturday.

The government has also raised its advice level, warning travellers simply: “Do not go to China”.

On Sunday, Mr Frydenberg said more than 150 Australian citizens due to be evacuated from Wuhan to Christmas Island would not be charged $1000 per head to escape the epicentre of the outbreak as the government had earlier advised.