Treasurer Josh Frydenberg said coronavirus would be worse for economy than $100billion bushfire cost

The coronavirus outbreak is set to be worse for the Australian economy than the almost unprecedented summer bushfire crisis.

The blazes that destroyed millions of hectares in New South Wales and Victoria are forecast to wipe $100billion from Australia’s gross domestic product.

Now, Treasurer Josh Frydenberg fears the coronavirus will be even worse, as the contagion financially assaults China – Australia’s biggest trading partner.

‘The message is very clear, the impact will be more significant than the bushfires, and it plays out more broadly across the Australian economy,’ he told reporters on Tuesday.

Treasurer Josh Frydenberg (pictured) fears the coronavirus will be even worse for the economy than the summer bushfires 

University of Queensland professor of economics John Quiggin last month estimated the bushfires could cost the economy $100billion. 

The double-whammy of the bushfire crisis and a likely coronavirus pandemic is set to jeopardise the Coalition’s election promise of a budget surplus in 2020 – which if delivered would be the first since 2007.

The April budget forecast a surplus of $7.1billion for the 2019-20 financial year.

That shrunk by 30 per cent to a forecast surplus of $5billion in December, even before the bushfires worsened, as Treasury released its Mid-Year Economic and Fiscal Outlook. 

Prime Minister Scott Morrison, who won a third consecutive term for the Coalition in May, defended the earlier promise of a budget surplus.

‘Hands up those who thought there was going to be a coronavirus epidemic when the budget was released last May? Of course no one did,’ he said in Canberra.

The Prime Minister described the virus as an ‘unknown global shock’.

‘This is not like a global financial crisis. This is a global health crisis,’ he said.

ANZ head of economics David Plank said the bushfires and the coronavirus were likely to cause an economic contraction in the March quarter and threaten the government’s promise of a surplus budget.

‘The surplus may have disappeared for this year – in a way that’s sort of appropriate,’ he told Daily Mail Australia on Tuesday. 

‘The bushfire will have had some impact, but then the virus will as well.’

The double-whammy of the bushfire crisis and a likely coronavirus pandemic is set to jeopardise the Coalition’s election promise of a budget surplus in 2020 – which if delivered would be the first since 2007. Pictured are paramedics in Hong Kong wearing masks

Coronavirus, also known as COVID-19, has infected 80,000 worldwide since it originated in December at an animal market in the Chinese city of Wuhan. 

This includes 24 people now in Australia.

Then there are another 47 Australians who are among the 219 confirmed cases of the coronavirus contracted on board Diamond Princess cruise ship at Yokohama in Japan. 

Coronavirus has killed more than 2,600 people globally and can cause severe lung damage and trigger multiple organ failure, particularly among the elderly or frail.

 Prime Minister Scott Morrison (left with Mr Frydenberg), who won a third consecutive term for the Coalition in May, defended the earlier promise of a budget surplus