Fears over the COVID-19 coronavirus have now spread to the Australian stockmarket, where $136.5 billion has been wiped off the value of shares.
There are predictions Australian shares are on track for their worst day since the Global Financial Crisis as the stockmarket tumbles.
Federal treasurer Josh Frydenberg, who is preparing to announce a major economic stimulus package this week, has called for calm.
But falling oil prices could deliver good news for motorists at home, with the Morrison government instructing the consumer watchdog to ensure that falls in the wholesale price are passed on to consumers.
“Australia is well prepared, economically, and we go into this challenge from a position of strength,” Mr Frydenberg said.
“This is a very different situation to what we saw through the GFC, which was essentially, a problem with the banking and the financial system and issues of liquidity. We haven’t seen those same problems in relation to this health crisis.”
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However, Mr Frydenberg said there was no doubt the economic impact was very significant.
“We’ve seen disruptions to international supply chains,” he said.
“We’ve seen a hit on particular sectors, including the tourism sector, agriculture sector, seafood sector and education sector. We’ve already seen the Reserve Bank adjust interest rates downwards and the major banks pass those rate cuts on in full.”
Qantas has already announced it will cut more international flights to Asia as it grapples with falling demand for travel to Tokyo, Hong Kong and Auckland, New Zealand.
Mr Frydenberg urged investors to remain calm and said the big banks were working together to cushion the impact.
“I was on a call with the International Monetary Fund just the other day. And on that call were Central Bank governors from China, from the United States, the European Central Bank, the Bank of England. Everyone is equally concerned. We’re seeing this in the global economy,” he said.
“But this is very different to the GFC, and so the response needs to be very different. And our response is both on the supply and the demand side.”
Mr Frydenberg is preparing to announce a major economic stimulus package that is likely to wipe out or delay Australia’s promised surplus.
There are calls to offer wage subsidies and extend Newstart payments to casual workers forced self isolate.
The Treasurer said he will have more to say on that front in coming days.
“I’m very conscious that Australians in employment, be it casual or permanent, will be concerned about their job security. This is obviously an issue that will be raised at tomorrow’s meeting between the Minister for Industrial Relations and the peak employee and employer groups. Our focus is on getting a cooperative workplace,” he said.
“Our focus is ensuring that businesses are flexible, given the stresses and the strains that we will see as a result of the spread of the coronavirus.”
There are now more than 80 known infections in Australia and three people have died. New South Wales is at 40, Queensland has 15, Victoria 12, South Australia seven, WA has four and two in Tasmania.
There is one case in the Northern Territory.