Bruce Baird (Cook, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer outline to the House the possible effects to the Australian economy of a pandemic caused by avian influenza? What is the government doing to prepare for this possibility?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Cook for his question. I can tell him that the Australian government has been working on a range of measures to respond to the threat of a pandemic caused by avian influenza. The government has budgeted a total of $555 million over five years, including $414 million on domestic health responses and $141 million to help our regional neighbours.

It should be stated that there has been no case yet of human to human transmission of the virus, but most of the preparations are going ahead on the possibility that that could occur—a possibility that is assessed at around a 10 per cent chance by international health authorities. A similar assessment has been made by Australia’s Chief Medical Officer.

Today the Australian Treasury has released a working paper called A primer on the macroeconomic effects of an influenza pandemic. It tries to have a look at the economic effects of a pandemic. One should say at the outset that all of these things are based largely on assumptions and one cannot be particularly precise about what would happen to the economy in the event of an outbreak. But the paper does say that confidence effects on both business and consumers would be severe; tourism services would be particularly affected; and the consequences on the overall economy could be very severe. The paper notes that the Australian authorities are well placed to deal with a pandemic and it highlights as policy implications the role of government in promoting an environment where people can quickly resume economic activity, and the role that monetary and fiscal policy will need to play in stimulating the Australian economy.

The fact that the Treasury has released this paper, and modelling has been done, does not mean that a pandemic is inevitable. All steps will be taken here in Australia and, I believe, around the world to try and do what can be done to prevent such a pandemic occurring. But we must prepare on a worst possible case basis. I want to assure the Australian public that our preparations in the health area and in regional cooperation are advanced, as too are our preparations in the economic area, for an event that we hope never occurs.