Coronavirus Australia: Tourism crisis as airline bookings plunge

Coronavirus Australia: Tourism crisis as airline bookings plunge

Tourism bosses will hold crisis talks in Canberra this morning – to work out how to boost visitors as the coronavirus crisis bites hard.

Health fears have seen airline bookings to Australia plunge, with bookings from Britain halving in the past month, compared to the same time last year.

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Scott Morrison is putting together a stimulus package as the virus continues to hold the country in its grip, taking a big slice out of economic growth in the first three months of the year.

The multibillion-dollar package, expected to be announced next week, is aimed at business rather than a “cash splash” to line the pockets of consumers.

The prime minister declined to say during question time on Thursday whether Australia faces a recession, instead promising the “strong economic management” Australians voted for.

A recession is classified as two consecutive quarters of economic contraction, something Australia has not suffered for almost three decades.

Treasury boss Steven Kennedy has warned the bushfires and the virus will affect economic growth. Credit: AAP

Treasury boss Steven Kennedy told the Senate economic committee on Thursday the virus could cut “at least” 0.5 percentage points from economic growth in Australia in the March quarter.

This comes on top of the 0.2 per cent drag on growth from this summer’s devastating bushfires.

So far, the tourism and education sectors have borne the brunt of the impact of COVID-19 after Chinese visitors and students were banned from entering the country in early February.

Airline bookings to Australia have plunged. Credit: STEVEN SAPHORE/AAPIMAGE

The government last week added Iran to the ban and South Korean visitors on Thursday. It also introduced enhanced screening for travellers from Italy.

Dr Kennedy also warned the bushfires and the emergence of the virus will undoubtedly have a negative impact on the budget position.

In the mid-year budget review in December, Treasurer Josh Frydenberg forecast a $5 billion surplus, which would have been the first in a decade.

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Economists expect retail spending figures for January, due out on Friday, will produce a flat result as the impact of the bushfires and associated smoke pollution counter any delayed spending from last year’s tax and interest rate cuts.

This would follow a 0.5 per cent drop in spending in December.

With additional reporting by Olivia Leeming

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