A ban on Chinese tourists visiting Australia could plunge the economy into a recession for the first time in three decades.
A veteran economist also fears a global coronavirus pandemic could spark a new global financial crisis, which could potentially unleash a 40 per cent plummet in Australian house prices.
With the summer bushfires and weak retail sales already undermining the economy, Digital Finance Analytics principal Martin North, an economist, said he feared the coronavirus could plunge Australia into recession this year for the first time since 1991.
‘Chinese tourism, very critical: definitely gone off the boil and my owns sense is that it’s probably going to hit people hard,’ he told Daily Mail Australia on Friday.
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A ban on Chinese tourists visiting Australia could plunge the economy into a recession for the first time in three decades. A veteran economist also fears a global coronavirus pandemic could spark a new global financial crisis, which could potentially unleash a 40 per cent plummet in Australian house prices. Pictured: people in Sydney wearing face masks in January following newws about the coronavirus outbreak
‘The unknown, of course, is how long this is going to go on for.
‘Before coronavirus, we were going to be in some difficulty: this is just another weight on the camel’s back.’
One Nation leader Pauline Hanson wants the border closed with 21 Australians so far testing positive to the coronavirus, including six in China and Japan.
The respiratory disease with no cure has killed more than 1,300 people in China and it’s expected to get worse, with Hong Kong epidemiologist Professor Gabrielle Leung fearing it could infect 60 per cent of the world’s population if left unchecked.
Before the onset of the deadly flu-like illness, China was Australia’s biggest source of international tourists with 1.458million visiting in the year to November, Australian Bureau of Statistics data showed.
China, Australia’s biggest trading partner, is also the No.1 source of international students, who contribute $12billion a year to the economy.
Prime Minister Scott Morrison has today extended by another two weeks a travel ban on holidaymakers who have transited through China – Australia’s biggest source of international tourists. Pictured: Norwegian cruise ship Jewel in Sydney Harbour after a passenger tested positive to coronavirus
They made up 38.3 per cent of foreign education enrollments in 2018, with Department of Education figures showing 152,591 were studying in Australia.
The summer bushfire crisis had ravaged the New South Wales South Coast and Victoria’s East Gippsland region in late January when the Chinese authorities confirmed the first cases of coronavirus in Wuhan.
In another ominous sign, the Australian Banking Association feared the coronavirus could hurt small businesses.
Its chief executive Anna Bligh, a former Queensland Labor premier, urged struggling business borrowers to ask their bank to allow them to refinance or defer their loan repayments.
‘Thousands of businesses have had a horror start to the year with drought, bushfires and floods,’ she said today.
‘Now the coronavirus having a severe impact on both their ability to create products and also export them to markets overseas.
‘Banks have hardship teams in place to walk businesses through the assistance on offer if they have been impacted by events outside of their control.’
Mr North said the coronavirus announcement from Australia’s banking lobby group was a sign the economy was in danger of sinking into a technical recession, as spending from China dried up.
‘That’s a sign that this is already starting to hit,’ he said.
‘I personally think that the tourism and the education dollar is going to have a very significant impact on the economy here unless things turn around.’
With household debt to income levels close to a record high, this in turn, could spark a 40 per cent slide in Australian house prices. Pictured: apartments in Sydney’s eastern suburbs
The coronavirus is expected to hit the global economy in 2020 than the SARS outbreak did in 2003.
In a worst-case scenario, Mr North feared it could spark a new global financial crisis, which would be worse than the American sub-prime mortgage crisis a decade ago.
‘The coronavirus could be a big, external shock so essentially, if that goes really badly then it could be the sort of trigger that would create a GFC Mark II,’ he said.
‘I don’t think Australia would be immune partly because we’re so leveraged from a banking perspective.’
With household debt to income levels close to a record high, this in turn, could spark a 40 per cent slide in Australian house prices.
‘This is still looking pretty shaky,’ Mr North said.
‘We’ve always got that risk of properties reverting to that 40 per cent drop.’
AUSTRALIANS WITH THE CORONAVIRUS
NEW SOUTH WALES: 4
- Three men aged 43, 53, and 35 who had recently travelled to China are confirmed to have contracted the disease.
- Two flew in from Wuhan while the other arrived in Sydney from Shenzhen, south China.
- They are being treated in isolation at Westmead Hospital and are in stable condition.
- A 21-year-old woman is identified as the fourth person to test positive for the illness in NSW.
- The woman, a student at UNSW, flew into Sydney International Airport on flight MU749 on January 23 and presented to the emergency department 24 hours later after developing flu-like symptoms.
- She is being treated in isolation at Westmead Hospital.
- A Chinese national aged in his 50s becomes the first confirmed case of the coronavirus in Australia.
- The man flew to Melbourne on China Southern flight CZ321 from Wuhan via Guangzhou on January 19.
- He is now in quarantined isolation at Monash Hospital in Clayton in Melbourne’s east.
- A Victorian man in his 60s is diagnosed with the coronavirus.
- He became unwell on January 23 – two days after returning from the Chinese city of Wuhan, the epicentre of the outbreak.
- The man was confirmed as positive on January 29 and was subsequently seen by doctors at the Monash Medical Centre. He was assessed as being well enough to stay at home.
- A woman in her 40s is found to have coronavirus.
- She was visiting from China and mostly spent time with her family.
- She is being treated at Royal Melbourne Hospital.
- A woman in her 20s in Melbourne is found to have the virus
- Queensland confirms its first case after a 44-year-old Chinese national wass diagnosed with the virus.
- He is being treated at Gold Coast University Hospital.
- A 42-year-old Chinese woman who was travelling in the same Wuhan tour group as the 44-year-old man tests positive. She is in Gold Coast University Hospital in stable condition.
- An eight-year-old boy has been diagnosed coronavirus. He is also from the tour group where the other Queensland cases came from
- The case was found in a 37-year-old man, who was a member of a group of nine Chinese tourists in quarantine on the Gold Coast
- A 37-year-old woman has been diagnosed with coronavirus from the same travel group that flew to Queensland from Melbourne on January 27
SOUTH AUSTRALIA: 2
- A Chinese couple in their 60s who arrived in Adelaide from Wuhan to visit relatives are confirmed to have coronavirus.
- Two Australians have been confirmed as having the virus in Wuhan itself. Australia has raised the travel alert level to ‘do not travel’ for the city of Wuhan – the epicentre of the outbreak – and for the entire Hubei province.
- Chief Medical Officer Brendan Murphy says unless people have contact with someone who is unwell and has come from that part of China, there is no need for current concern.
- Four Australians are among 65 newly-confirmed coronavirus cases aboard the quarantined Diamond Princess cruise ship docked at Yokohama.