At the same time, the China ban was maintained for another week although the government is working with the university sector behind the scenes to relax restrictions on Chinese students, even exploring the option of bringing them in in limited numbers on a state-by-state basis.

The coronavirus scare triggered the ASX 200 index to drop for the fourth straight day, by 0.8 per cent to 6657 by the end of the session. Almost 7 per cent has been lost off the benchmark this week, wiping out all of the previous gains recorded so far this year.

The activation of the plan, preparations for which first began on February 18, means the Commonwealth will have Australian Border Force screen arrivals for the disease. It will also work with the states to ensure their hospitals have the capacity to deal with large numbers of cases.

This includes ensuring entire floors or wards are dedicated to treating coronavirus cases, making sure there are adequate staff, including back-up staff to replace those who may come down with the disease, ensuring medical personnel have access to protective equipment such as masks from the national medical stockpile, and ensuring aged care homes have lock-down plans in place.

Health Minister Greg Hunt said it was about making sure there were no gaps in the system, nationwide.

Mr Morrison again warned the hit to the economy would be very significant although Treasury has yet to provide the government with a final estimate as to how bad.

The government's slim hopes of returning a budget surplus this financial year grew narrower after Mr Morrison also announced targeted assistance for affected sectors.


Deloitte Access Economics head Dr Pradeep Philip writing in today's Financial Review says the firm's modelling shows around two-thirds of Australia’s expected growth in national income in the first half of 2020 - about $5.5 billion - will be wiped out, rising to $5.9 billion if things get a little worse.

A week after ruling out assistance for the universities and the tourism sector, saying taxpayers could not act as insurers for such an event, Mr Morrison said he has had a change of heart.

Treasury has been charged with plans to provide "targeted, modest and scaleable'' assistance or stimulus to sectors including education, tourism, exporters and small business.

Scaleable means more will be provided if needed.

Two weeks ago, the Group of Eight, which represents to nation's top eight universities, presented Treasury with economic modelling which showed for each 10 per cent decline in Chinese students, up to 7500 jobs would be put at risk and ore than $1 billion wiped off the economy.

The modelling by London Economics shows the effects of a student downturn go well beyond the university sector and into the services the students use.

Mr Morrison acknowledged this.

"That's not just the fact they're not in a university,'' he said of the students stuck in China.


"It means they're not in the country which means they're not participating in the economy. The second round effects of these issues is what can be impacted.''

No need for economywide spending

Mr Morrison reiterated there would be no economy-wide stimulus measures.

"It's a health crisis with very real economic impacts and the government is extremely mindful of that and we want to be able to get our responses right,'' he said.

"In terms of broader, larger, fiscal stimulus-type responses, that is not the advice we're receiving from Treasury. Quite the opposite.''

Privately, the government is very worried about the potential for panic and is keen to emphasise that Australia was well prepared for what may eventuate.

Health Minister Greg Hunt said "the very clear message for the Australian people is we are not immune but we are well prepared''.

Mr Morrison, too, said there was no need to panic or to avoid public gatherings, and the government was simply acting with an "abundance of caution".


"You can still go to the football and play with your friends down the street, you can go to the concert and you can go out for a Chinese meal," Mr Morrison said.

"You can do all of these things because Australia has acted quickly, Australia has gone ahead at this point in time. But to stay ahead of it we need to now elevate our response to the next phase."

Labor leader Anthony Albanese played down the announcement, saying the the plan had been public since February 18.

"The opposition will receive a briefing but it seems to us... that this is pretty similar essentially to the announcement that was made, maybe even identical to the announcement that was made, on the 18th,'' he said.

Mr Morrison disagreed.

"What has occurred in particular in the last 24 hours is the data regarding the rate of transmission of the virus outside of China is fundamentally changing the way we need to now look at how this issue is being managed here in Australia.''

He said there were "some challenging months ahead".

Australia has had 15 recorded cases, all of whom no longer have the disease. Another eight Australians caught the disease while aboard the plague ship, the Diamond Princess. There has been no known community transmission of the disease.