Prime Minister Scott Morrison has called this devastating bushfire season Black Summer and now the coronavirus has dealt another blow to Australians, particularly in their hip pockets.
After bushfires, drought, floods, damaging hailstorms and the outbreak of the deadly coronavirus overseas, Australians are now seeing their wealth and retirement nest eggs severely dented.
Australian shares fell by a further three per cent on Friday as world markets tumbled over fears of a global recession in the face of an escalating COVID-19 crisis.
Wall Street stocks plummeted more than four per cent on Thursday, with the Dow Jones Index recording its biggest point drop on record, at 1191 points, in what one analyst described as “pandemic paranoia”.
The Australian market has now shed 10 per cent or $240 billion in value since it hit a record high on February 20 and is close to matching the huge losses that were suffered during the height of the 2008-2009 global financial crisis..
It will likely be a further dead weight on consumer confidence and in turn, a further negative for an already troubled retail sector.
Consumer confidence, as measured by the weekly ANZ-Roy Morgan gauge, has been below its long run average since the turn of the year and is a pointer to future household spending.
“I’d be surprised if confidence went up,” ANZ head of Australian economics David Plank told AAP ahead of next Tuesday’s weekly release.
But Mr Plank said while COVID-19 is a factor, it hasn’t erupted in Australia yet and the federal government’s responses have been “pretty strong”.
The government has extended its travel ban on visitors from China, the epicentre of the virus, for another week while preparing the nation for a potential pandemic.
Markets were rattled when World Health Organisation Director-General Tedros Adhanom Ghebreyesus warned the COVID-19 outbreak had reached a “decisive point” and urged countries to redouble their efforts to contain its spread.
“This virus has pandemic potential,” he said.
Australia’s investment watchdog is closely monitoring volatility in financial markets to ensure they remain orderly.
Australian Securities and Investments Commission chair James Shipton told a federal parliamentary committee he’s working closely with fellow regulators, both domestically and overseas, to monitor the situation.
“We stand ready and prepared for any market eventuality,” Mr Shipton said.
Mr Morrison warned the global spread of the virus would have a big impact on the Australian economy.
“We have a strong, stable financial base to address this, but we can’t kid ourselves that the impact of the coronavirus globally, here in Australia, is not going to be significant,” Mr Morrison said.
But deputy Labor leader Richard Marles said the economy was already sluggish before this summer’s bushfires and the coronavirus outbreak.
“We have been calling for stimulus since the election,” Mr Marles told Nine’s Today program.
Economists expect next week’s national accounts for the December quarter will show another soft growth result.
The tourism sector has borne the brunt of the Chinese travel ban.
The Tourism and Transport Forum estimates the number of foreign travellers visiting the country between January and June 2020 will be down 40 per cent on the same period in 2019.
TTF chief executive Margy Osmond says its economic modelling shows that if the virus is not contained within the next three to six months, the sector would lose an average $2 billion a month beyond March.
Home Affairs Minister Peter Dutton said the government is already doing work with Treasury to look at ways to provide assistance “at the right time”.