Scott Morrison wants Premier Daniel Andrews to provide extra financial assistance to Victorians after the state announced a prolonged exit plan from stiff COVID-19 restrictions.
Only then will he and Treasurer Josh Frydenberg consider what further measures may be required from the federal government.
“It is right that the Victorian government make the first response ... to deal with the measures that they have put in place,” the prime minister told reporters on Sept. 7.
Morrison was clearly unimpressed by the Victorian premier’s decision to extend the lockdown for another two weeks, and then only gradually lift restrictions during October and into November depending on the success of suppressing the virus.
The prime minister warned this would have a “ripple effect” across the national economy.
“There are domino impacts because of the role that Victoria plays in our national economy through supply chains ... that can flow on into other states and territories,” he said.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell said Victoria’s roadmap was a devastating blow to thousands of small businesses, many which will now close their doors forever.
She believes the state government should cover the costs associated with small business closures as tough trading restrictions will remain in place until the end of October, at the earliest.
“It is unreasonable to expect small businesses to continue to hang on and accumulate debt, given this ongoing forced closure is not fault of their own,” Carnell said in a statement.
Business Council of Australia chief executive Jennifer Westacott said the state still had a long way to go.
“Being a long way from where we need to be compared to other states like NSW, means more job losses, more businesses failings,” she told Seven Network’s Sunrise program.
Victoria’s second-wave of COVID-19 has already had a detrimental impact on the national economy, which was confirmed as being in recession last week.
New figures show job advertising slowed markedly in August due to the start of Victoria’s restrictions, cutting short the solid rebound in the previous two months.
ANZ’s jobs ads series—a pointer to future employment growth—rose just 1.6 percent in August following a 19.1 percent spike in July, to be still 27 percent down from their pre-pandemic level in February.
ANZ senior economist Catherine Birch said with Victoria accounting for more than 26 percent of the nation’s pre-pandemic employment, the restrictions have undoubtedly put the brakes on job advertising.
“We expect outright falls in national employment in August and September,” Birch said.
Australia’s services sector has also taken a hit from the Victorian lockdown.
The Australian Industry Group’s performance of services index fell 1.5 points to 42.5 in August, remaining below the 50-mark which separates contraction in the industry from expansion.
“Lower customer demand, increased activity restrictions and uncertainty all contributed to the deterioration in services activity in August,” the Ai Group said.
