"This is not like a global financial crisis. This is a global health crisis," Mr Morrison said, pointing to the damage to universities and tourism which together contribute about $16 billion to the economy, as well as the building industry, with builders concerned about getting materials from China, manufacturing and exports. Chinese trade accounted for 7 per cent of the Australian economy, he said.

"When planes aren't coming in, planes aren't going out. The bellies of those planes aren't taking Australian produce into those markets," he said. "The world economy has become increasingly interconnected and interdependent over many, many years. And what this impact is is putting up walls and blockages between those connections, between all of these countries."

Coalition backbenchers raised concerns in their party room on Tuesday about the impact on regional airports including from more passenger screening, and on tourism, with one helicopter operator said to be losing 300 passengers a day. They also questioned why Chinese high school students had been allowed in while university students remain locked out unless they spend 14 days in another country. The party room was told that the virus was five to seven times more contagious that the flu.

As the virus sees shutdowns in Italy, Japan and South Korea, with concern also about Iran, Treasurer Josh Frydenberg said the economic impact had been top of the agenda at the G20 finance ministers meeting. The forecasts of a slowdown in the global economy, from 3.3 per cent to 3.2 per cent.

"There were concerns expressed about the shutters going up on the global economy and it wasn't just those countries that were geographically approximate to China, namely Singapore, Japan and Korea, but it was also economies in countries further afield, like Italy," he said.

Treasury was still trying to calculate the impact on the Australian economy and budget.

"They say there's considerable uncertainty around what exactly that impact will be ... but the message is very clear - the impact will be more significant than the bush fires and it plays out more broadly across the Australian economy," he said.

The government will make a decision in the coming day or two about whether to extend the China travel ban. Mr Morrison said the government had no advice to suggest the ban should be extended to other countries.

The government will also decide whether to ease the China ban for university students, allowing them to come to Australia with a 14-day self-isolation.

Mr Morrison said the self-isolations had been a success, with 30,000 Australians returning and no human-to-human transmission other than a group from Wuhan and the cruise ship passengers.

"The self-isolation that we have put in place for those more than 30,000 Australians to date has proved to be very effective," he said. "The truth is, in Australia, there is no great risk at this point in time."

Chief Medical Officer Brendan Murphy said the outbreak was likely to be declared a pandemic if the spread could not be contained in countries outside China, a question that would become more clear in the coming days.

"If there is a global pandemic, then we will be prepared," he said.

It was too early to predict whether the Tokyo Olympics would pose a contagion problem.

Mr Morrison said he understood "the anxieties, concerns and fears that people have". Australia was not immune but was in the best position that any country could be in, he said.

Deloitte Access Economics director Chris Richardson said a budget surplus remained reasonably likely.

"The news is worst in human terms, moderately bad in economic terms and less bad still in budget terms," he said.

"Bush fires make it harder, the coronavirus makes it harder, but the budget update ahead of Christmas saw Treasury shift from being conservative in its assumptions to being very conservative, so they've got some wriggle room built in there.

"Whether it's enough does come down to where the virus heads from here and I'm sure that today's statements from the government are just giving themselves room if it does get worse."