Victoria Is Dragging Down Australian Economy

August 30, 2020 Updated: August 30, 2020

More Victorians are expected to be on JobKeeper wage subsidies by year’s end than the rest of the country combined.

New Treasury numbers paint a grim picture of the devastating impact Victoria’s second wave of coronavirus is having on the national economy.

Treasurer Josh Frydenberg is using the figures to pile pressure on the Victorian premier to chart a course out of harsh social and business restrictions.

Daniel Andrews has so far resisted demands to outline a roadmap, with more than 100 infections still being recorded across the state each day.

Strict lockdown measures have driven the number of Victorians on unemployment benefits up by eight percent.

Household spending has plunged by 30 percent compared to just three percent in the rest of the country.

The hospitality sector has borne the brunt of the restrictions, with spending on dining and takeaway meals down 60 percent, while accommodation has fallen 80 percent.

Frydenberg, Victoria’s most senior Liberal, accused the Labor premier of mishandling coronavirus outbreaks, likening the situation to a slow-moving car crash.

“Restrictions imposed by the Victorian government have had a devastating impact on the economy,” Frydenberg said on Aug 31.

“As we have seen in other states, if you can successfully suppress the virus, jobs will return.”

Australian Council of Trade Unions president Michele O’Neil said health advice should be paramount in lifting restrictions.

“This is not a choice between the economy and lives. We actually can and must consider both,” she told ABC radio.

O’Neil said paid pandemic leave, training for workers and providing workplaces with safety equipment would be key to a sensible reopening.

She noted there had only been one day during Victoria’s second wave with new cases below 100.

Treasury estimates 60 percent of the 2.24 million people receiving JobKeeper by the end of the year will be in Victoria.

While the number of people on wage subsidies is expected to fall to 1.75 million early next year, three in five recipients are still expected to be from Victoria.

Andrews has been working with unions on the easing of stage four restrictions across Melbourne, which are due to end in two weeks.

He is also meeting with business groups on Monday to discuss a possible pathway out of the lockdowns.

Daniel McCulloch in Canberra