Victoria faces a “catastrophic” economic downturn not seen since the 1990s recession due to the coronavirus pandemic, while Queensland is dealing with its own jobs crisis.
The Victorian state government on Wednesday released modelling from the Department of Treasury and Finance that forecasts 270,000 Victorians could be out of work as a result of the health crisis.
Unemployment is expected to peak at 11 per cent in the September quarter, which is more than double the current rate.
Economic output is forecast to drop by $32 billion – or more than $1 billion a week – during the next six months, while gross state product could be 14 per cent lower than the pre-virus predicted $226 billion.
The revised figure puts the state’s economic output at $194 billion.
The property market – a major source of government revenue – is also expected to take a hit, with house prices predicted to fall by up to nine per cent by the end of the year.
“From a government point of view, these figures are bleak and quite frankly catastrophic,” Treasurer Tim Pallas told reporters on Wednesday.
“Let’s not sugar coat it, we are in for difficult times.
“It’s worse than I thought we’d land.”
The Victorian government is seeking to borrow $24.5 billion to fund a recovery process it expects to take years rather than months, while it is also locking in $8 billion of funding for infrastructure projects underway.
“We’ve got the biggest construction agenda in our nation and certainly the biggest in our state’s history. That’s going to need to get bigger,” Premier Daniel Andrews said.
“We’re going to need to do more in road and rail, hospitals and schools, we’re going to do more in skills and training.”
The economic modelling assumes coronavirus restrictions will remain in place for six months, despite a slowdown in the number of new cases daily.
Queensland job market dries up
About 130,000 Queenslanders have lost their jobs or had their hours drastically cut through forced business closures, treasury officials estimate.
Most of those people work in shops, restaurants, theatres, bars, cafes, live music venues and galleries.
State government officials estimate 20,000 businesses have been directly affected by the COVID-19 restrictions, while roughly 166,000 have shown interest in the federal government’s JobKeeper program.
Jobs in Queensland have dropped by five per cent, data collected by the Australia Bureau of Statistics in March shows.
That compares with a six per cent drop across the country.
“While our health response to the singular objective of flattening the curve has been world-leading, the economic impact of widespread restrictions has been nothing short of devastating,” Treasurer Jackie Trad told parliament on Wednesday.
The state government has announced $4 billion in funding for health and industry initiatives.
Some of that money has gone towards lifting the capacity of intensive care units and additional paramedics, and paying for 12-month interest-free loans up to $250,000 per business.
In the past month, 1,400 loans totalling $206 million have been approved.
About 11,400 Queensland businesses have received a payroll tax refund or payment holiday, totalling $311 million.
More than two million households will get a $200 rebate on their power bill.