Victorian workers to get up to $500 as part of support package; lockdown cost hits $26b

Thousands of Victorians unable to work during lockdown will be eligible for a payment of up to $500, but there’s a catch on who qualifies.

Thousands of Victorians unable to work because of the state’s extended lockdown will receive a payment of up to $500 from a new federal support package.

The temporary Covid disaster payment, unveiled by Scott Morrison on Thursday, is available to anyone unable to work because of a lockdown lasting longer than a week in an area defined as a hotspot by the federal chief medical officer.

Applications will open for the payment next Tuesday for people aged over 17 who have been stood down and lost their shifts.

Anyone who would normally work more than 20 hours a week will receive $500, while those working less than that will receive $325.

It will only be available for people with liquid assets of less than $10,000. They will not be required to dip into their annual leave before accessing the support but must have exhausted other relevant leave entitlements.

Retail and hospitality have been forced to shut again. Picture: Daniel Pockett/Getty Images

The Prime Minister said the payment would be made weekly in extended lockdowns, but would only kick in after the first seven days.

Acting Premier James Merlino made it clear prior to the announcement that the state government believed delivering income support was solely the responsibility of the commonwealth.

Mr Morrison said he was open to paying the full cost of the new measure, as long as state governments committed to fund business support packages during extended lockdowns.

Otherwise, he said he would seek a 50-50 split to cover the support payment, with the matter to be discussed at Friday’s national cabinet meeting.

Mr Morrison said it was crucial that governments balanced the risks between the virus and the impact of restrictions implemented to slow the spread.

“The commonwealth does not seek to intervene in those decisions of the states,” he said.

He said Victoria had “suffered greater than any other part of the country”.

Treasurer Josh Frydenberg said: “The pandemic has not ended and neither has the support from the Morrison government.”

Applications will be able to be made for the payment online or over the phone, with full details to be available soon.

Mr Morrison said he agreed with Mr Merlino that he did not want to see the lockdown extended beyond next week.

“I want to see kids get back to school, I want to see people go back to work,” he said.

Mr Frydenberg said the new support would be a demand-driven program that could be accessed by as many as half a million casual workers in metropolitan Melbourne.

It comes as Mr Frydenberg declared on Thursday morning that there was “a need in Victoria for continued support” to families and businesses in their “hour of need”.

Mr Frydenberg said he held “constructive discussions” with his Victorian counterpart Tim Pallas on Wednesday, after the state Treasurer lashed the federal government earlier this week for its lack of support.

A senior state government source said income support was the responsibility of the commonwealth, and argued providing payments through the tax office — which handled the JobKeeper subsidy scheme — would be quicker and easier to get the cash to those who needed it.

The lockdown has escalated tensions between the Victorian and federal governments over who will foot the bill to support struggling businesses and thousands of laid-off workers.

The state government committed $460 million to a businesses support fund but also called on the commonwealth to provide income support amid fears for thousands of casual workers.

The federal government had decided that the state government had the capacity to provide economic support to those affected by the initial one-week lockdown.

Melbourne will spend a further week in lockdown. Picture: Daniel Pockett/Getty Images

However, Mr Frydenberg indicated the extension would change the government’s approach.

“We do recognise the pain the Victorians are now experiencing,” he told ABC radio.

He said extra support would be temporary and targeted and paid through existing systems, mirroring the type of help the government had provided throughout the pandemic.

Industry leaders reacted furiously to the extended lockdown, which could cost the Victorian business sector up to $143 million a day.

A number of businesses on Wednesday also urged the government to consider the reintroduction of rent-relief schemes.

Acting Premier James Merlino announced on Wednesday an almost doubling of the state government’s initial $250 million business-support package to help up to 90,000 businesses.

Under the $460 million package, eligible businesses could claim up to $7000 to help cover lost earnings during the lockdown.

Industry groups have warned the current support on offer would be insufficient to stop businesses being forced to close their doors for good.

“There is a reality here that only one in 10 small to medium business owners can access the support,” Small Business Australia executive director Bill Lang said.

“Those that can access support are facing losses per week of between $30,000 and $50,000, so while $5000 might seem like a reasonable amount, when you are bleeding upwards of $100,000 in fixed costs in the first two weeks of lockdown, it makes little difference to the survivability of your business.

“This funding is too little, too complicated and, unless there is support, will fail to save thousands of businesses that will be forced to close permanently.”

Paul Bellette, owner of South Yarra’s Republic cafe, is enduring yet another lockdown. Picture: David Caird

Mr Lang said the government “appears to be unable to attract or welcome people with the skills and experience and risk-management appetite”, adding that its leaders, most of whom are former union officials, lacked experience in the business world.

Business Council of Australia chief executive Jennifer Westacott said “all Australians” would be disappointed by the lockdown extension “because the longer this goes on, the bigger the social and economic costs for us all”.

“It’s frustrating that the taxpayers of Australia have to continually foot the bill for system failures in Victoria,” she said.

“At the end of the day, it is the responsibility of the national cabinet to get the right contact tracing and quarantine systems in place to make sure Australians aren’t continually plunged into the uncertainty and despair of stop-start lockdowns like this,” Ms Westacott said.

Paul Dimattina, owner of Lamaro’s Hotel, at South Melbourne, said he had costs of $28,000 a week, including $6000 for rent and $20,000 in wages.

“The money on offer from the state government is a slap in the face,” he said.

“The fallout of this lockdown is going to be dramatic. So many businesses will fold.”

Emerald Village Bakery and Cafe owner Nat Granieri is worried for employees like Maddison Mayberry, Jessica Deed, and Erin Ardley. Picture: Jason Edwards

Federal Treasury secretary Steven Kennedy said lockdowns cost about $100 million a day – but the Victorian Chamber of Commerce and Industry claimed the true cost was about $143 million daily, with the total cost being $26 billion.

“Today’s lockdown four extension has intensified Victoria’s business and worker emergency,” VECCI chief Paul Guerra said.

“We need a clear path out of this lockdown that will see a return to the level of restrictions that we had in place prior to this fourth lockdown.

“We know businesses are ready to do whatever is required to ensure that we can open up again.”

Mr Guerra said that with the vaccine rollout, the state-mandated QR code system and improved contact-tracing capabilities, business needed a clear commitment that the lockdown would not be extended again.

“Victorians need, and deserve, transparency and clarity on what the parameters are to go into lockdown and what we need to achieve to open up again,” he said.

Sarah Fahy, who works at RetroStar Vintage Clothing in the CBD, said the lockdown extension was worrying her “as much as everyone else”.

Sarah Fahey, who works at RetroStar Vintage Clothing. Picture: Rob Leeson

“The shop is completely closed, so obviously I’m not getting paid and I’m worried about rent and stuff,” she said.

“I’ll possibly have to get back on Centrelink, and I’m sure there are lots of others in the same boat.”

Emerald Village Bakery and Cafe owner Nat Granieri said she would be unable to cover rent and wages for the month.

“We’re dropping about 80 per cent of our usual business, and today I had to sell everything for $5 or otherwise it had to be binned,” she said.

Mr Frydenberg said existing programs and support, including welfare, were already available to Victorians and that states had the capacity to respond to short lockdowns.

“We have already delivered around three times what the state has delivered to those workers,” Mr Frydenberg said.

“Our support to Victoria has been the highest on a per capita basis than anywhere across the country.”