Exclusive: Jackie Trad demands urgent meeting with all treasurers to discuss impact of virus on Australian economy

This article is more than 7 months old

This article is more than 7 months old

Federal treasurer Josh Frydenberg has told his state counterparts to wait until April to discuss the economic impact from coronavirus, despite confirming it will be bigger than the Sars pandemic.

Impacted states are pushing to have the discussion much earlier, with Queensland, considered to have one of the most exposed economies, particularly critical of the Morrison government’s handling of the expanding health crisis.

Queensland deputy premier and treasurer Jackie Trad told the Guardian the “let’s chat about it in a couple of months” response from the federal government, in the wake of warnings from the RBA and industry stakeholders of potential impact was “simply not good enough”.

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“This on the day the Reserve Bank has revised down national economic growth because of bushfires, drought and coronavirus,” she said.

“I’m calling on the federal treasurer to convene an urgent meeting of treasurers from every jurisdiction to discuss and plan a response to the impact of the coronavirus on the Australian economy.”

In his letter to the states, Frydenberg outlined why the coronavirus spread was a threat to the economy, but proposed waiting until the next scheduled council of federal financial relations meeting in two months to discuss it.

Frydenberg also said the treasury would be able to give a briefing on the “scenario analysis conducted to date”, while reiterating why the coronavirus was expected to have a bigger impact than the Sars pandemic of 2003.

“China’s share of Australia’s tourism export value has increased by nearly seven-fold since 2002-2003. In 2018-2019, China accounted for 19% of total Australian tourism export value, worth $4.3bn.”

“After the Sars virus was contained, China, the region and Australia all saw significant bounce backs. Once we succeed in containing coronavirus, we would expect a similar recovery. The key question is how long this may take.”

Queensland has previously called for industries expected to be impacted by the coronavirus, such as tourism and trade, to be compensated under the federal government’s disaster relief payments, but has so far been rebuffed.

Changes to the funding would require negotiations between the commonwealth and the states and territories, and state governments want the treasurers’ meeting brought forward to respond to the economic impact of coronavirus and the bushfires.

In the wake of China cancelling international group tours late last month, and then Australia banning travel for non-Australian citizens and residents from China, Australia’s economy is likely to take a hit from coronavirus, from tourism to education and resources.

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Ratings agency S&P slashed its forecast of China’s economic growth for this year by 0.75 percentage points, saying the coronavirus will deliver a big temporary hit to the country’s economy that will spill over to the whole world.

“The global impact will be felt through four real economy channels: sharply reduced tourism revenues, lower exports of consumer and capital goods, lower commodity prices, and industrial supply-chain disruptions,” it said.

Reserve bank chair Philip Lowe has already warned that the coronavirus could do more damage to the Australian economy than the 2003 Sars outbreak.

Queensland premier Annastacia Palaszczuk told the state parliament on Thursday the Cairns region alone had already lost $200m in bookings, and Gold Coast operators are expecting to lose $400m.

“Farmers, fishers, tourism operators and universities all told of lost business impacting now,” Palaszczuk said.

“There are trawlers unable to fish because the market for coral trout and premium mud crab has evaporated overnight.”

Trad said the state was attempting to get ahead of a potential economic disaster, brought on as a secondary impact of the virus’s spread.

“What we are trying to avoid is a situation where literally hundreds of workers are being displaced on a daily basis because we aren’t getting the tourists or the students or for example, the cancellation in agricultural or safety products to Chinese markets,” she said.

“These are all things that are happening right now. And we don’t know how long it will go and how far it will go.

And what the Australian government needs to do, is be a bit more responsive and empathetic, rather than being dismissive.”

Guardian Australia has contacted Frydenberg’s office for comment.