Startling unemployment figures predict the hangover from lockdowns in Victoria to continue months beyond the restrictions easing, with spending plummeting 80 per cent in some sectors.
It comes as treasurer Josh Frydenberg launches a blistering attack on state premier Daniel Andrews, calling Victoria’s response a “slow motion car crash”.
"This has to be the biggest public policy failure by a State government in living memory" – Treasurer @JoshFrydenberg's strongest language yet on the health and economic situation in Victoria #auspol @SBSNews pic.twitter.com/7E8UTt4pED
— Brett Mason (@BrettMasonNews) August 30, 2020
Mr Frydenberg has been turning up the heat on Daniel Andrews, pressuring the Victorian Premier to outline a clearer path toward the easing of restrictions – even as the state continues to record more than 100 new cases and double-digit death tolls each day, amid fears the state may not be able to ease its lockdowns next week as scheduled.
“If these numbers are not enough to bring forward a definitive plan from Daniel Andrews as to how he will take his state out of stage 4 restrictions, I don’t know what will,” Mr Frydenberg told Channel Nine’s Today on Monday.
“I think Victorians are fed up.”
New analysis from the federal Treasury department, released Sunday, forecasts there will be more businesses in Victoria needing the JobKeeper wage subsidy than in every other state combined.
Almost one million Victorians are on JobKeeper. Nearly 30,000 people in the state have been forced onto unemployment welfare payments since the end of June, with a total of 400,000 currently on JobSeeker.
“Restrictions imposed by the Victorian government have had a devastating impact on the economy,” federal Treasurer Frydenberg said.
The federal government has been criticising Victoria as it looks to shed blame for failures in the Commonwealth-led aged care system.
“Victorians need hope. We need to hear more about the road out, than a longer road in,” said Mr Frydenberg on Sunday, accusing the state government of a “litany of failures”.
New analysis from the treasury, mapping the economic hit from the Stage 3 and 4 lockdowns in Victoria, paints a troubling picture.
About 400,000 Victorians are currently receiving the JobSeeker payment. Some 28,000 extra people went onto unemployment payments since June 26, a jump of more than 7 per cent.
Half that figure has come in August alone, since the Stage 4 lockdowns were introduced.
Nationally, the number of people on unemployment in the rest of the country has slowly decreased over the same period.
However, the trend is more prevalent in metro Melbourne.
Parts of the city have seen up to 8 per cent more people going onto unemployment benefits, but in the regions it’s only about 3 per cent.
Treasury claimed analysis of Commonwealth Bank data showed household spending down 30 per cent in Victoria in recent weeks, compared to a dip of just 3 per cent in the rest of the country.
Discretionary spending – that is, non-essential goods such as leisure, entertainment and eating out – plunged 45 per cent.
In metro Melbourne, spending is down about 24 per cent generally, but in regional Victoria, it dropped only about 5 per cent.
Spending on dining and takeaway crashed more than 60 per cent, while accommodation spending plunged more than 80 per cent – a reflection of the lockdowns forcing people to stay home and not travel.
As the federal Parliament turns its attention this week to the government’s plans to extend the JobKeeper program and give businesses extra powers to alter employees’ working conditions, the treasury analysis shows Victoria will be needing the wage subsidy for months to come.
The JobKeeper changes, to be debated in Canberra this week, will extend the program to mid-2021.
In the December and March quarters, treasury forecasts there will be more Victorians accessing the subsidy than in the rest of the country combined – some 60 per cent of the nation’s total recipients.
The government said it had put about 280,000 businesses and nearly one million people on JobKeeper in Victoria, dishing out some $12.25 billion in payments for the state.
Separate research from the Australian National University’s Centre for Social Research found the recent COVID-related changes to JobKeeper and JobSeeker saved more than two million Aussies from poverty.
Mr Frydenberg on Sunday torched Mr Andrews’ handling of the COVID outbreak, turning up the volume on a sustained line of criticism coming from Canberra to Melbourne in recent days.
The Treasurer claimed the state’s response has “been like watching a slow car crash occurring”, and called Mr Andrews’ plans to extend the state of emergency for 12 months as a “complete overreach”.
“Victorians are in the dark,” Mr Frydenberg said.
“They don’t know what happens next.”
Mr Andrews shrugged off the criticisms, as he announced 114 new COVID cases and 11 deaths on Sunday, taking a not-so-veiled swipe at Mr Frydenberg’s focus on the economy.
“I haven’t seen his comments and I actually have no interest in having an argument with him. What I would say is this, there is no economic recovery until you get the health problem fixed,” Mr Andrews said.
Also on the agenda in Parliament this week will be PM Scott Morrison’s new foreign relations bill to crack down on state and local governments signing international agreements.
This is another front in the simmering conflict between Canberra and Victoria, with the new legislation squarely aiming at the Belt and Road Initiative agreement Mr Andrews signed with the Chinese government.
It’s expected Labor will continue its attacks on the federal government and Aged Care Minister Richard Colbeck over failings in the sector, while the Coalition is likely to turn up its rhetoric on Labor state premiers keeping their borders closed to tourists.