The Victorian economy could take up to three years to recover from the COVID-19 pandemic and the lockdowns, the state’s treasurer has warned.
Treasurer Tim Pallas unveiled a $534 million support package on July 10, including $5000 cash grants for businesses affected by the six-week lockdown of metropolitan Melbourne and the Mitchell Shire.
He said there will be “literally billions of dollars written off the expected size of the Victorian economy” due to the second wave of coronavirus currently battering the state.
The Treasurer anticipates the June quarter will finish 14 percent below previous government estimates, with unemployment to peak at 11 percent.
“That is a profound reduction and it will take some years before we see that level of economic activity come back,” he said, warning it could take up to three years.
Pallas said if he had been asked about the state’s outlook a few weeks ago, he would have been “a little more optimistic”.
“Today, I’m less so,” he said.
More than 80,000 Victorian businesses will be eligible for the cash grants as well as an extended and expanded payroll tax deferral.
The package also includes $30 million for the hospitality industry, $20 million for a fund for businesses in the Melbourne CBD, and $40 million for regional tourism businesses to cover the cost of refunds.
About $6 million will go to mental health support for business owners. A $10 million mentoring program will also be set up, pairing small business operators with experienced professionals.
“Clearly, the return to Melbourne (of) stage three restrictions just isn’t where we want it to be. Really, what this will be is a clearly traumatic, a very difficult time for many people,” Pallas said.
“For the pain, for the hardship that people have to endure, I want to be very clear that the government apologises to Victorians for it.”
He said the government has now offered $6 billion in support to Victorians during the pandemic.
“This a testing time for business. It is a testing time for us all. It is important that we do more than simply provide platitudes of support to the community,” Pallas said.
Federal Treasury figures show 245,000 businesses in Victoria are taking part in the JobKeeper program, with an estimated 177,000 in the locked-down greater Melbourne area.
Based on the national average of employees per business receiving JobKeeper, up to 930,000 workers in Victoria could be on the payment.
Benita Kolovos in Melbourne