Bird flu (H5N1) puts South Australia’s economic resilience to the test

The detection of bird flu (H5N1) in South Australia has rightly triggered an immediate biosecurity response, highlighting the role biosecurity plays in supporting Australia’s economy. Strong biosecurity underpins regional prosperity, food security, resilient supply chains, and Australia’s reputation as a trusted trading nation.

As biosecurity risks become complex and interconnected, Australia’s ability to prevent, contain and recover from disease outbreaks will become an important economic advantage. While the immediate response is focused on detection and risk of spread, the longer-term challenge is to ensure the economy is resilient to future outbreaks.

Biosecurity is economic infrastructure

Disease outbreaks disrupt production, expose vulnerabilities in supply chains and labour markets, and place pressure on businesses and governments. While the impacts begin at the farm level, they can quickly spread through the broader economy, influencing business confidence, investment, and household costs.

Australia’s biosecurity system protects agriculture, forestry and fisheries export industries worth $51 billion, while reinforcing confidence in the nation’s food system and its standing as a reliable trading partner.

Every outbreak has economic consequences

While the Department of Primary Industries and Regions (PIRSA) has not reported an H5N1 outbreak in South Australia’s commercial poultry sector, detections elsewhere in the state highlight the economic risks that could emerge if the disease spreads.

In previous work for a South Australian poultry industry client, BDO estimated that the Australian poultry sector contributed $7.9 billion to GDP in 2017/18 dollars ($10.5 billion in current dollars), and supported around 58,000 full-time equivalent jobs, with South Australia recording the highest industry contribution relative to the size of its state economy.

These figures demonstrate how even a localised disruption can affect a much broader network of growers, processors, feed suppliers, freight operators, retailers, and regional service businesses.

The impacts extend beyond the farm gate

An outbreak would affect far more than poultry farms. In work undertaken by BDO, the largest expenditure categories for the poultry sector included wages and feed, highlighting the practical exposure of labour markets, grain supply chains, transport and utilities to a disruption. Manufacturers, retailers, transport operators, and regional businesses that rely on the poultry value chain could all experience disruption, particularly in areas where agriculture underpins local employment and business activity. For regional economies with fewer opportunities to diversify, this can slow recovery.

Although Australia’s poultry industry primarily supplies the domestic market, biosecurity also protects the competitiveness of Australia’s broader agricultural sector. Even isolated detections have the potential to trigger trade restrictions, while Australia’s strong biosecurity reputation supports larger export industries including beef, dairy, grain, and horticulture.

The scale of the economic impact ultimately depends on how effectively outbreaks are contained. Strong surveillance and rapid response can help minimise disruption and preserve market confidence. The faster an H5N1 outbreak is contained, the smaller the economic shock is likely to be. More widespread outbreaks can increase the likelihood of production losses, higher food prices, additional government response costs, and ongoing disruption across regional economies.

Preparedness is an investment

Australia has a well-established biosecurity system, supported by experienced emergency response agencies and close collaboration between government and industry. Maintaining that capability requires continued investment in surveillance, rapid response, business continuity planning, supply chain resilience, and regional preparedness.

Recent environmental and biological shocks, including harmful algal bloom impacts in South Australia, point to a similar lesson: when disruptions occur, their impacts are felt across production, logistics, tourism, community confidence, and local business activity.

Rather than being viewed as a compliance or response cost biosecurity should be recognised as an investment in economic resilience.

Building resilience before the next outbreak

H5N1 is a reminder that biosecurity underpins far more than agricultural production. It protects regional economies, supports resilient supply chains and reinforces confidence in Australia’s economy.

Investing in resilience today is likely to cost far less than responding to widespread disruption tomorrow.

How BDO can help

Understanding the economic impacts of biosecurity risks requires more than industry expertise. BDO's economic advisory team works with governments, industry bodies and businesses to assess economic impacts, evaluate resilience strategies and support evidence-based decision making.

Learn more about BDO's Economic Advisory services.