The Flagged Impact of the Wuhan coronavirus outbreak has begun to strain on the Australian economy, with commodities, aviation, and education absorbing the worst of the shake.
This comes at a time when the government representatives from Western Australia’s education and tourism sectors held a conference last week and mentioned that it was too early to predict the effects of a ban on group travel by the Chinese government would have on the state’s industries.
Iron Ore price dropping by more than $US10 per tonne over the weekend, the benchmark iron ore price fell to $US81.35/t, after having floated at around $US90/t throughout January.
This represents the lowest price for iron ore this year, and a worry for the state’s finances; budget documents from May 2019 projected that for every $US1/t reduction in the iron ore price, state government revenue drops by approximately $81million.
The Australian stock market faced similar troubles, with the S&P/ASX 200 index closing today 93.92 points down.
The Wuhan coronavirus outbreak has so far killed about 360 people on the Chinese mainland, and one person in The Philippines.
There have been 12 confirmed cases in Australia but none in WA.
Australian and other airlines have begun taking precautions in the wake of the disease’s spread, with Qantas announcing it would suspend its direct services to Shanghai and Beijing until late March due to logistical issues following entry restrictions imposed by the Singaporean and US governments.
While that will only affect departures from Sydney, a representative from Perth Airport confirmed that China Eastern Airlines and China Southern would suspends their flights from Shanghai and Guangzhou, respectively, with the latter route to recommence in late March.
Whilst Flights between Shanghai and Perth were part of a trial initiative that was set to run until February 17.
The cancellation of that trial initiative gives a major blow to tourism operators and the state government, who had promoted the scalability the flights would have on WA’s economy.
The education sector has faced issues in recent days, with The University of Notre Dame, Curtin University, The University of Western Australia and other Universities across Australia requesting all students who had travelled to mainland China within the past 14 days to self-isolate for a two-weeks in accordance with directives from the Scott Morrison government.
Study Perth chief executive Phil Payne mentioned that last week the problem had so far been logistical in nature, and that he feared misunderstandings over the virus could affect the broader community.
In the interim, Chinese-owned iron ore miner has also placed staff who had visited China since January 17 into isolation for a 14-days.
At the miner’s Pilbara site a total of 20 people are currently in isolation at the projects main accommodation village, where their wellbeing is being closely monitored and care management arrangements finalised.
Were the company said none of the employees are considered suspected coronavirus cases.
The McGowan government has emphasised caution on the issue, with the Premier
Appearing alongside Health Minister Roger Cook and Treasurer Ben Wyatt at allay public concern.
The Government is bullish as the relationship with China was paramount As the Premier mentioned as ‘saying now was not the time to disengage from China’. And that “We need to maintain our strong relationship with China both now and into the future."
Mr Wyatt was confident that, despite the fall in iron ore prices, the budget's estimated surplus of $2.6 billion would not be affected. With the reason as that "Because we have based the budget on a very low iron ore price ... meaning that the budget at the moment is managing that very well," he said.
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