‘Double-whammy’ brings economic ruin for East Gippsland
Bushfire-ravaged East Gippsland was only starting to get back on its feet when coronavirus hit. Now the region is staring down the barrel of economic devastation.
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Almost a quarter of bushfire-ravaged East Gippsland’s economy will be wiped out this year, as a study shows the region will be Australia’s hardest hit in the coronavirus fallout.
The region, which was only just recovering from the summer bushfire disaster when COVID-19 struck, is facing a $450 million annual slump, or a drop of 22.6 per cent — three times the national average of 6.7 per cent.
The fallout is also hurting Hume municipality, home to Melbourne Airport, the report by SGS Economics and Planning reveals.
The findings come as Virgin Australia administrators moved to borrow $200 million to help keep operations afloat pending sale of the airline.
The move, by administrator Vaughan Strawbridge, indicated Virgin was not as liquid as believed when it went into voluntary administration on April 21. Several consortiums are preparing bids for the airline by May 15.
In further economic fallout, Westpac joined ANZ in deferring a decision on whether to pay a dividend as it announced a 62 per cent plunge in net profit to $1.19 billion for the six months to March, compared with the same period last year.
And Flight Centre said its sales were running at 5 to 10 per cent of pre-coronavirus levels, while Adairs told investors a 221 per cent surge in online sales would not be enough to offset the shutdown of its bricks and mortar network.
The Australian Bureau of Statistics also revealed the cashflow of about 70 per cent of businesses has been slashed because of the virus. The ABS also found about 60 per cent of businesses across the country have or intend to sign up for the Federal Government’s JobKeeper wage subsidy scheme.
The study analysed economic output across 109 sectors by municipality nationwide.
SGS principal Terry Rawnsley said the economic effect in eastern Victoria was worse than the Great Depression.
“East Gippsland and southern New South Wales have had a terrible double-whammy of bushfires and then COVID-19 cutting off any quick recovery,’’ he said.
The report said businesses near Melbourne Airport would struggle as retail, aviation services and accommodation sectors were reeling.
Central Melbourne will also experience an 11 per cent economic drop but should start to return once CBD workers return. The large fall was because of the loss of tourism spending, the closure of cafes, bars and restaurants and the effective closure of shopping centres.
Mr Rawnsley said domestic tourism could make up for some of absence of international travellers in coming months. The higher education sector would slow the city’s recovery until overseas students returned, he said.
Country areas that do not depend as much on tourism and have a healthy agricultural sector, such as western Victoria, would be least affected by the pandemic.
Nationally, tourism reliant Kangaroo Island, Barossa Valley, Byron Bay, Port Douglas and Margaret River were expecting double-digit falls in economic output.
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