Scott Morrison expects the Australian economy will bounce back once the coronavirus crisis is resolved.
The prime minister is taking a positive approach heading into a week in which the Reserve Bank is expected to cut interest rates and the latest data is set to show a floundering economy.
The RBA board will meet on Tuesday to consider taking the cash rate below its record low of 0.75 per cent.
“This is a health crisis not a financial crisis,” Mr Morrison says.
“But it is a health crisis with very significant economic implications.
“On the other side of this crisis, when the health issues are addressed, there will be a bounce back.”
The tourism sector in particular faces losses running into billions of dollars due to the travel ban on Chinese visitors in an attempt to contain COVID-19.
The education sector is also bearing the brunt of travel restrictions.
Treasurer Josh Frydenberg is working on a plan to boost the economy, but won’t risk blowing out the federal budget.
“Our fiscal response will be considered, it will be responsible and it will be targeted,” he said.
Shadow treasurer Jim Chalmers argues the economy has been in desperate need of support for some time.
“We need to recognise that seven-or-so weeks of coronavirus fallout does not on its own explain or excuse seven years of economic mismanagement and underperformance,” he says.
“The government downgraded its own forecasts for growth in December’s mid-year update, the Reserve Bank downgraded growth three times last year and the OECD and IMF downgraded Australia’s growth more than they have for other advanced economies.”
The national accounts for the December quarter are due on Wednesday, which will not include the full impact of summer’s devastating bushfires either.
Economists at this stage expect the economy grew by a slim 0.4 per cent in the quarter, with some having marked down their predictions in the face of weak construction and business investment data last week.