Australian Recovery Will Be Impacted by Victoria’s Extreme Lock Down

A container ship is pushed to its berth by a tug at the Port of Melbourne, Australia, on June 6, 2018. (William West/AFP via Getty Images)

Australia’s federal Treasurer, Josh Frydenberg, has admitted that the “devastating” stage four lockdowns in Victoria will “severely” impact the movement and trajectory of Australia’s economic recovery.

Speaking to ABC Radio in Melbourne on August 3, Frydenberg stopped short of saying that the lockdowns would send the country deeper into a recession but he did note that Victoria’s latest round of restrictions would be “very tough.”

“This is a real kick in the guts to Victorian businesses,” he said.

The Victorian economy represents a quarter of Australia’s economy and as a result, the pandemic lockdown will impact the speed and trajectory of the economic recovery “beyond the Victorian border.”

Victoria is a crucial part of Australia’s integrated supply chains. The Port of Melbourne is one of the largest cargo ports in the country and many companies distribute their products nationally from Victoria.

Companies like Wesfarmers who own hardware giant Bunnings and OfficeWorks also use Victoria as a production base for products like paint and their national distribution of products.

Treasury’s original costings for Victoria’s 6-week lockdown was $3.3 billion but these estimates didn’t factor in Stage Four lockdowns.

The unemployment figures will also be affected by the situation, Frydenberg explained. The federal government would be expecting the 975,000 Victorian’s currently on the JobKeeper business subsidy to be on the scheme into October and beyond.

Paid Pandemic Leave

In the interview, the treasurer admitted the federal government was in discussions with relevant stakeholders about paid pandemic leave.

Attorney-General Christian Porter said on July 31 that the Fair Work Commission had decided against the establishment of pandemic leave given it would cause more costs for struggling businesses and the current swathe of relief measures in place.

Victorian Premier Daniel Andrews declared a state of disaster on August 2 that came with new restrictions as COVID-19 infections and deaths continue to mount.

On Aug. 3 Andrews announced that for the next six weeks retail, some manufacturing, and administration businesses would all need to close by 11:59 pm on Aug. 5, unless they have specific circumstances.

Retail stores that have contactless ‘click and collect’ services, and delivery services with strict safety protocols in place will be able to open.

Hardware stores can remain open onsite, but for tradespeople only.

Under the new measures, shopping may only be done by one person from every household once a day, and exercise will be limited to one hour a day. Both activities can only occur within five kilometres of the household’s residence.

There will also be a curfew between 8 pm and 5 am during the six-week lockdown.