Treasurer Josh Frydenberg has predicted Victoria’s COVID surge to cost the economy $1 billion per week, as businesses across Melbourne are forced into a six-week lockdown after the city only just emerged from stern countrywide restrictions.
With numbers peaking at 191 new coronavirus cases on Tuesday, Victoria’s Premier made the call to bring back stage 3 restrictions, forcing cafés and restaurants, beauty parlours, gyms, libraries and other facilities to withdraw back into hibernation.
But with the government’s JobKeeper stimulus measure due to end on 27 September, businesses are concerned whether they will have the financial strength to reopen again.
Speaking on the Seven Network on Wednesday morning, Mr Frydenberg confirmed that Melbourne’s situation is a significant economic challenge for the country, but one the government will address on 23 July, as it considers prolonging stimulus measures for the lockdown areas.
“The government will announce a new phase of income support on 23 July,” Mr Frydenberg said.
“This is a trying time, not just for Victorians but for a number of sectors that continue to do it tough.”
To date, $10 billion has hit Victorian businesses under the current JobKeeper program, the Treasurer confirmed.
Speaking about the possible effects of the Victorian coronavirus surge on the government’s JobKeeper review, the Institute of Public Accountants’ general manager of technical policy, Tony Greco, told MyBusiness that the latest developments will certainly have a direct effect on the recovery process and the business and consumer confidence more generally.
“The stimulus measures still have months to go, so the government still has some wiggle room to wait and see if the situation in Victoria can be contained,” Mr Greco said.
He noted that the government would have factored in a second wave in its economic planning.
“I guess they knew that secondary outbreaks were to be expected after restrictions were relaxed, so not a real surprise,” Mr Greco said.
Besides the federal support headed Victoria’s way, Premier Daniel Andrews is expected to announce additional support for businesses affected by the second lockdown.
“I know just how tough this will be for these businesses and for their workers. I promise, we’ll have more to say shortly about support to help get you through,” Mr Andrews said on Tuesday.
It is expected that the Premier will soon unveil the extension of the latest $5,000 grant, aimed for businesses that initially entered stage 3 restriction on 1 July, to the entire city.