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The 2019-20 Australian Economic Crisis Induced by Bushfires and COVID-19 from the Perspective of Grape and Wine Sectors

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  • Glyn Wittwer

Abstract

The unprecedented bushfires from September 2019 to January 2020 in south eastern Australian resulted in 34 deaths and destroyed homes, farmland, infrastructure, crops and conservation land. Even though most of the capital damaged was away from urban areas, substantial impacts resulted in urban areas including Newcastle, Sydney, Wollongong and Canberra, due to smoke pollution. Now the recovery phase is being hindered by the global COVID-19 pandemic. This study uses an aggregation of TERM-WINE, a multi-regional, dynamic model of Australia, to examine the impacts of bushfires and the pandemic on the Australian economy. It places some emphasis on the grape and wine industry. In a number of respects, the industry is a loser in the crisis, due to direct destruction of vineyards and wineries from bushfires, and in some regions from smoke taint. On-premise consumption of wine will be curtailed by social isolation responses to COVID-19. At the same time, the response to the crisis may increase off-premise wine consumption. It would appear that the modelled duration of the COVID-19 induced economic crisis in this study is optimistically short. Nevertheless, the bushfires plus a severe disruption for four months due to the pandemic are sufficient to reduce national economic welfare by $105 billion in net present value terms. This excludes estimates of the value of conservation land and fauna destroyed by bushfires. This provides a context for the magnitude of the appropriate fiscal response of the Federal Government.

Suggested Citation

  • Glyn Wittwer, 2020. "The 2019-20 Australian Economic Crisis Induced by Bushfires and COVID-19 from the Perspective of Grape and Wine Sectors," Centre of Policy Studies/IMPACT Centre Working Papers g-299, Victoria University, Centre of Policy Studies/IMPACT Centre.
  • Handle: RePEc:cop:wpaper:g-299
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    References listed on IDEAS

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    1. Wittwer, Glyn, 2019. "Estimating the regional economic impacts of the present drought on NSW," 2019 Conference (63rd), February 12-15, 2019, Melbourne, Australia 285089, Australian Agricultural and Resource Economics Society (AARES).
    2. Glyn Wittwer, 2020. "Estimating the Regional Economic Impacts of the 2017 to 2019 Drought on NSW and the Rest of Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-297, Victoria University, Centre of Policy Studies/IMPACT Centre.
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    Cited by:

    1. Leroy de Morel, Laetitia & Wittwer, Glyn & Gamperle, Dion & Leung, Christina, 2020. "The potential local and regional impacts of COVID-19 in New Zealand with a focus on tourism," Conference papers 333207, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Betarelli Junior, Admir Antonio & Faria, Weslem Rodrigues & Proque, Andressa Lemes & Perobelli, Fernando Salgueiro & de Almeida Vale, Vinicius, 2021. "COVID-19, public agglomerations and economic effects: Assessing the recovery time of passenger transport services in Brazil," Transport Policy, Elsevier, vol. 110(C), pages 254-272.

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    More about this item

    Keywords

    regional bushfire impacts; COVID-19 economic impacts; welfare;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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