Coronavirus to cause business chaos
QUEENSLAND businesses are bracing for a devastating hit to their bottom line and widespread job losses as the escalating coronavirus grinds trade with China to a halt.
Some markets are reporting a staggering 87 per cent free fall in exports as China closes its ports, flights carrying cargo out of Australia cease, orders are cancelled and tourism and international education take a massive hit.
Although Treasury is still scrambling to calculate the full extent of the damage to the state's economy, businesses have been warned the impacts will be worse than SARS in 2003 and the 1989 pilot strike - one of the most expensive and dramatic industrial disputes in Australia's history.
Treasurer Jackie Trad said one in five Queensland jobs were in trade-exposed industries. "Comparisons are being drawn between novel coronavirus and the SARS virus of 2003," she said.
"China's economy is now 6.5 times larger than it was in 2003. China's share of Queensland exports has grown from five per cent to 33 per cent since 2003."
Chamber of Commerce and Industry Queensland advocacy and policy general manager Amanda Rohan said exporters were already hurting, with exports in the live marine, fresh produce and beef industries slashed by 87.5 per cent, 45 per cent and 18 per cent respectively.
"The lockdown in China means ports are closed and no flights are going in or out and while no export bans are imposed, no orders are coming in for many of our Queensland exporters," she said.
"Hardest hit have been our live exports, agribusiness and fresh produce industries with many of the Chinese New Year celebrations being cancelled due to the coronavirus."
The staggering size of the impending disaster was laid bare yesterday as 23 industry groups were called to Parliament House for a briefing at which at least one woman broke down in tears.
Stakeholders at yesterday's crisis meeting heard of the potential for long-term devastation if Queensland cannot maintain its good business relationships and can't recoup business once the crisis passes. China is the sole destination for Queensland coal, LNG and new economy minerals, as well as the state's top market for overseas students.
Queensland Resources Council chief executive Ian Macfarlane said the virus was a major concern for the resources industry, which delivers more than $24 billion in coal, gas and metal exports to China each year. "China is a vital partner for us," he said.
The threat has seen a meeting of the state's Economic Functional Recovery Group called for today in which government, industry and businesses will discuss how to mitigate economic losses and develop recovery plans.
Export Council of Australia chair Dianne Tipping said the virus had "virtually shut down the Chinese seafood trade, causing tonnes of seafood to be stranded in export holding tanks". "Across Australia there was a couple hundred tonne of rock lobster that was caught and wasn't shipped before the China market shutdown," she said.
Torres Strait Seafood owner Sonia Einersen, who has been in the industry since 1989, said she has never seen anything like it. "It's terrible - it's shut us down," she said.
"All of our overseas orders have been cancelled. It's not even viable … they're saying a retail price of live fish in Melbourne was $30 to $35 and leading up to the Chinese New Year the price was $60 to fisherman - so half of what we paid for it.
"When we ship it, our freight costs between $15 and $20 a kilo to get to them."
"We have a couple of full time staff that are going to have to be put off if we don't get any news as to how long this might last for."
Reserve Bank Governor Philip Lowe yesterday warned the impact of coronavirus on the economy could be worse than SARS in 2003.
In a speech to the National Press Club, Mr Lowe said it was still too early to know the overall impact but China's rapid integration into the global economy since 2003 meant any downturn there would lead to larger "spillovers" to the global economy.