Second wave of coronavirus could cost Victorian economy $1 billion a week
Victoria’s economy would go backwards by a whopping $1 billion a week if restrictions were revived to tackle a second wave of the coronavirus. Here’s how we can prevent it.
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Victoria’s economy would go backwards by a whopping $1 billion a week if restrictions were revived to tackle a second wave of the coronavirus.
But the first stage of unlocking the state is expected to drive $717 million in economic growth every month.
And if the full three-stage plan agreed by the national cabinet is implemented by Premier Daniel Andrews, Victoria will see $2.2 billion in monthly growth to recover from the crisis.
Treasurer Josh Frydenberg will ramp up the government’s push to kickstart the economy by detailing the new data on Tuesday — the day he was supposed to deliver the federal Budget.
Treasury forecasts reveal reopening schools — and getting parents back to work — is crucial to the nation’s recovery and would deliver a $2.18 billion monthly boost.
The national cabinet’s three-stage plan, due to be in place by July, is tipped to grow the economy by $9.4 billion a month.
But if Australians ignore social distancing and hygiene advice, and the virus starts to spread again, a return to restrictions would cost the nation an estimated $4 billion a week.
Mr Frydenberg is expected to say on Tuesday that the most important factor in reviving the nation’s fortunes is lifting confidence after the largest decline on record, with renewed demand tipped to fuel $2.9 billion in monthly growth.
“The nation’s finances can only be sustained by a strong and growing market-led economy,” Mr Frydenberg will say.
“Australians know there is no money tree. What we borrow today, we must pay back in the future.”
But in a new report, Deloitte Access Economics lead partner Kristian Kolding warned Australia is facing “the sharpest recession” since the Great Depression.
“Families and businesses are scared. And scared people don’t spend,” he said.
More than $25 billion in taxpayer-funded support has already flowed to households and businesses, with another $30 billion to be paid next month.
Mr Frydenberg will say that is “the largest and fastest injection of funds in people’s pockets the country as ever seen”, creating a debt bill that will take “many years to repay”.
Deloitte estimates the deficit could hit $143 billion this year, but Mr Frydenberg will say the government’s measures are designed to protect the Budget’s “structural integrity”.
Treasury’s forecast shows the first stage of reopening hospitality venues — limiting them to 10 diners at a time — is expected to deliver a $500 million monthly economic boost, but all three stages will add $1.75 billion to the economy every month.
But Premier Daniel Andrews yesterday blocked even a limited reopening of cafes and restaurants until at least June.
“If we wait these three weeks, when we move to open, go beyond just takeaway for cafes, we might not have to stick with the number of 10,” he said.
Tim Tam, the part owner of Prahran restaurant Little Tim Tam, said he was trying to stay “upbeat and positive”, pumping music and wearing a hot pink wig as he sold takeaway meals.
“Fingers crossed it’s returning to normal. We need a lot of notice for it to happen — you have to have staff and stock ready,” he said.
As the government prepares to review the $130 billion JobKeeper scheme, Prime Minister Scott Morrison said any changes would be “based on advice and the strength of the economy”.
“We’re six weeks into a six-month program,” he said.
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