Victoria’s spike in coronavirus cases is causing a significant blow to the state’s hip pocket – and the damage is set to get worse with fears the second set of lockdowns will “mean the end” for businesses and jobs.
On Tuesday, Victoria recorded an additional 191 new COVID-19 cases. There have been two deaths – one man in his 60s and another in his 90s on Monday.
Premier Daniel Andrews announced metropolitan Melbourne would return to stage three coronavirus restrictions, forcing restaurants to revert back to takeaway-only, and other businesses like beauty parlours to shut up shop again.
After several promising weeks of few new cases in May and June, the virus has taken a sudden ugly turn – and it’s going to hit the state hard.
The Victorian Chamber of Commerce and Industry had dire predictions for the reinstated lockdowns, warning “businesses will suffer, and some will permanently close”.
“Melbourne businesses and workers will once again be asked to bear the brunt of the COVID-19 crisis, and we know this will be the final straw for some,” said the chamber’s chief executive, Paul Guerra.
He called for the federal government to extend its JobKeeper program for another two months beyond its scheduled September end-date, with the extra six weeks of Victorian lockdown to end only in late August.
“Governments and the entire community must do more now to get Victoria in a position to be able to reopen fully,” Mr Guerra said.
An economic outlook report released on Monday by Deloitte predicts the spike in cases will cause Victoria to suffer the largest downturn of all states and territories.
Deloitte Access Economics partner Chris Richardson said the state’s population – once a key growth engine – “has well and truly stalled”.
“The need for tighter restrictions has sent job losses soaring and consumers hanging on to their cash rather than spending it,” he said.
Victoria – the self-proclaimed ‘education state’ – also relies heavily on migration and foreign students, meaning tough lockdowns will leave it more exposed than other states and territories.
“The sectoral damage of this recession continues to change fast,” Mr Richardson said.
“It began – and remains – with international border shutdowns that have taken migrants, tourists and foreign students out of the economy.”
And with most of the state heading back under Stage Three lockdown restrictions, Victoria may soon be in even worse shape.
The potential loss of the trans-Tasman bubble
Victoria’s inability to contain the crisis may also delay Australia reopening its international borders, according to the report.
This week, New Zealand Prime Minister Jacinda Ardern said she was willing to set up quarantine-free travel with individual Australian states, but not the whole country.
No prizes for guessing which state will miss out.
She said if states were to open up to New Zealand, they would need to retain border controls for travellers within Australia to stop Victorians coming to New Zealand via another state.
Victoria a no-go zone
The new outcast of Australia will have to make some tough adjustments.
Businesses in lockdown suburbs will suffer, but so will broader Melbourne and regional Victoria, said economist Terry Rawnsley from SGS Economics and Planning.
“If this event hadn’t occurred, the school holidays would be in full swing, and regional Victoria would’ve had people coming out in more numbers,” he told The New Daily.
“There’s also the medium-term impact, the nervousness: What if this happens again? How do I run my life around these potentially semi-regular outbreaks? Is this the new normal in Victoria?”
Mr Rawnsley added Victoria’s outbreaks would “definitely take the gloss off domestic tourism”.
“Obviously we’ve got a year or two of no international tourists coming in, so we’re dependent on our states for tourism,” he said.
“It’s going to taint the Victorian and Melbourne brand.”
The good news?
Victorians who have had to cancel their holidays in Noosa will hopefully head to the Mornington Peninsula as a Plan B.
“If people can’t get out of Victoria to spend their money, they’ll have to spend it locally so that will boost the local economy,” Mr Rawnsley said.