Treasurer Josh Frydenberg has warned the economic impact of the coronavirus will be “significant” as Australian businesses brace for a hit to their bottomlines.

The federal treasury is scrambling to model a range of scenarios with some forecasts suggesting the local economy could suffer a hit of up to $2.3 billion.

“We don’t know how severe and sustained the spread of the coronavirus will be,” Mr Frydenberg said.

“We know the impact on the economy will be significant but what we are doing is ensuring we have the flexibility to respond as required.”

Australia China Business Council CEO Helen Sawczak told SBS News businesses were already feeling the effect of fewer Chinese tourists and students.

“There is definitely a loss of confidence given the virus outbreak,” she said.

“Until the situation is alleviated there is going to be a significant impact on the Australian economy.”

AAP

The federal government has imposed a travel ban on non-citizens travelling from China with this action blocking thousands of Chinese students and tourists heading to the country.

Mr Frydenberg has pledged to support those industries affected by the outbreak and try to mitigate the potential economic costs.

The SARS outbreak of 2003, which lasted about six months, is estimated to have cost $US40 billion to contain globally.

"When the SARS virus hit we saw tourist numbers fall, we saw student numbers fall, and we saw trade numbers fall. But it did rebound strongly after that," the treasurer said.

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However, he said China's economy is now four times the size it was in 2003 and its trade relationship with Australia has developed significantly.

There have been more than 28,000 confirmed cases of coronavirus globally, resulting in more than 560 deaths, with 14 cases confirmed in Australia.

Macquarie University Centre for the Health Economy director Henry Cutler told SBS News the economic cost of this latest outbreak is uncertain.

“It is difficult to say when this is going to stop but it seems to be getting worse before it is going to be getting better,” he said.

“What we are saying here is there are pockets of the economy that will be more impacted than others.”

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Mr Cutler said the most exposed small businesses were in retail, restaurants and tourism operators with less capacity to deal with a sudden or protracted loss of income.

“Any severe or protracted international travel restrictions would mean that small businesses in Australia will be impacted,” he said.

“The question is how well are small businesses able to hold out while they wait for the coronavirus to dissipate.”

Australian food exports to China have fallen due to the closure of restaurants while parts of the country remain in lockdown to stem the virus’s spread.

In the long-term, a slowdown in infrastructure development in China could also threaten Australia's most valuable export - commodities.

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Research by PricewaterhouseCoopers, which estimated the impact of China restricting the number of its citizens who could visit or study in Australia, put the cost at $2.3 billion.

But the Australia China Business Council cautioned against adding to the hysteria of the situation.

“We’re hoping this is just a temporary outbreak and hopefully business will regain its confidence after that,” Ms Sawczak said.

Reserve Bank Governor Philip Lowe on Wednesday told the National Press Club Australia’s economic fundamentals “remain very strong” despite the coronavirus outbreak.

“It is important that we don’t catastrophise here,” he said.

“It’s possible that this cannot work out well, but it is possible that the SARS experience is a reasonable guide.”