Feeling the strain: Virus to hit hardest in Queensland economy

The novel coronavirus has so far been contained in Queensland but the economic impact is unavoidable – and could be long lasting.

Feb 10, 2020, updated Feb 10, 2020
(AP Photo/Beto Barata)

(AP Photo/Beto Barata)

Queensland has more cases of the novel coronavirus than any other state and faces a much broader economic crisis if China cannot bring the outbreak under control.

Since being discovered in Wuhan, more than 6500km from Australia, the virus has prompted global travel restrictions and a trading slowdown that shows no signs of easing.

Barely a month into the crisis, Queensland has already had thousands of students kept from universities and schools, the cancellation of seafood and other export orders, tougher controls on shipping and Chinese tourists disappearing from shops and hotels.

Globally, there have so far been 871 reported deaths from about 38,000 confirmed cases of the virus. Australia has had 15 cases – five in Queensland alone – and imposed quarantine requirements on hundreds more people returning from China.

The five members of a nine-person Chinese tour group have tested positive and are being treated in the Gold Coast University Hospital. Their four travelling companions also remain in isolation, with the staggered diagnosis of each case of the virus resetting the clock on their mandatory 14-day isolation period.

The Palaszczuk Government has also been making arrangements for hotels on the Gold Coast and in Cairns to be used for isolation or quarantine should no other facilities be available. At the same time, tourism campaigns have also been brought forward, to attract visitors from other countries and interstate, while authorities debate how long the crisis will last.

While there are fears the sometimes-deadly virus will continue to spread and mutate before a vaccine can be developed, there are also concerns for the financial harm to industries and communities long reliant on Chinese visitors and investment.

Federal Treasurer Josh Frydenberg, in a letter to Premier Annastacia Palaszczuk, has conceded the travel restrictions “should help to contain the virus quickly, but may also exacerbate the economic shock in the short-term”. Palaszczuk’s request for Commonwealth disaster relief funding has been rejected.

Frydenberg has suggested treasurers discuss the likely economic impact at their scheduled April meeting, however Deputy Premier Jackie Trad has called for more urgent discussions to consider economic stimulus.

“It’s quite a wait when you think, particularly, the universities and the tourism-impacted communities and other areas that would be reeling,” Trad told InQueensland.

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The University of Queensland has 6000 students still offshore, and affected by the travel restrictions, while Griffith University has almost 2000 and the Queensland University of Technology roughly 1200.

Not only do those students normally contribute to the local economy, their families often visit during their stay, providing another dimension to the inevitable tourism downturn caused by the cancellation of inbound flights from China. One in 10 Queenslanders are employed in tourism, and China is the biggest market, with half a million travellers injecting more than $1.6 billion into the economy annually.

Trad said Queensland Treasury was still obtaining data from tourism operators on the extent of short-term cancellations and the likely flow-on effects, which she said might range from companies putting off casual workers to curtailing operations altogether.

“To say that we don’t need to immediately consider this and think about how we can mitigate the impact or cushion the blow is just being a little non-empathetic,” Trad said.

Having brought forward the state Budget in an election year, Trad is also anxiously watching the Chinese economy, in the knowledge that Queensland has partly fuelled its growth through coal exports. Every one per cent in lost coal export volume will cost the state $40 million in revenue, at a time when the state is trying to provide whatever economic stimulus it can.

“It will be impossible for the state to fill the entire gap if the coronavirus goes for longer than SARS and has a much deeper impact than SARS,” Trad said.

SARS, a severe acute respiratory syndrome first recognised in China in 2002, caused fewer deaths but was contained within six months. Already there are fears the novel coronavirus may take longer to contain, and the impact on China itself will reverberate more widely than SARS given China’s rise in global markets this century.


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