By Colin Packham
SYDNEY, Feb 25 (Reuters) - Prime Minister Scott Morrison warned on Tuesday that his government might be unable to keep its election campaign promise to deliver Australia's first budget surplus in over a decade due to the economic impact of the coronavirus epidemic in China.
The government had initially projected a 2019/20 budget surplus of A$7.1 billion ($4.71 billion), and revised that down in December to a surplus of A$5 billion due to falling revenues.
But that estimate will need further revision in the wake of the epidemic in Australia's biggest export market.
"Who thought there was going to be a coronavirus epidemic when the budget was released last May. Of course no-one did. These are unknown global shocks," Morrison said.
Asked about options to alleviate the impact on the budget, Morrison said: "they're very limited, I've got to say... we're not a government that engages in extreme fiscal responses."
Australia's Treasurer Josh Frydenberg said the impact of coronavirus was still being calculated but it would be larger than from recent bushfires across the country's east coast.
The fires are estimated to have wiped between 0.1-0.4 percentage points from the March quarter.
Earlier this month, Reserve Bank of Australia Governor Philip Lowe said the coronavirus could shave 0.2 percentage points off Australia's economic growth in the current quarter. has since Feb. 1 banned all foreign nationals who had been in China within two weeks to enter the country, leaving thousands of international students unable to attend classes.
Foreign students are worth about A$35 billion a year to the Australian economy, with Chinese students accounting for about a third of that figure.
($1 = 1.5090 Australian dollars)