Victorian Acting Premier James Merlino demands Morrison government provide financial support to businesses, workers

Victorian authorities have blasted the federal government for refusing to provide extra financial help during the extended lockdown.

Victoria’s Acting Premier James Merlino has taken a savage jab at the Morrison government, saying it would be “incredibly poor” if the commonwealth did not support businesses struggling in lockdown.

Small business owners and casual workers were dealt another crushing blow on Wednesday when the Victorian government announced an extra seven days of lockdown for greater Melbourne.

Stubborn case numbers and the threat of the Indian variant of the virus “exploding” led health authorities to its latest decision after six new local infections in the past 24 hours.

The federal government has so far rejected calls to provide additional financial support during the state’s fourth major lockdown in 12 months.

Treasurer Josh Frydenberg said he would meet with his counterpart in Victoria, Tim Pallas, on Wednesday and consider the calls.

“I haven’t even yet heard or seen the request from Victoria,” Mr Frydenberg told reporters.

He said he had “a constructive relationship” with Mr Pallas, “despite his comments in recent days”.

The Victorian Treasurer said on Sunday he was “angry and disappointed” with Mr Frydenberg’s and Prime Minister Scott Morrison’s response to the state’s latest crisis.

Victoria Acting Premier James Merlino says it would be ‘incredibly poor’ if the commonwealth did not support businesses struggling in lockdown. Picture: NCA NewsWire/Ian Currie

Australian Bureau of Statistics figures released on Wednesday morning showed the nation’s GDP was back to pre-Covid levels, but Mr Frydenberg said the federal government had already provided Victoria the highest level of financial support on a per capita basis.

Extending lockdowns were “decisions the Victorian government makes”.

“We have already delivered around three times what the state has delivered into that state,” he said.

“Our support for Victoria has been there.

“Despite the strong national account numbers today, there is no reason for anyone to become complacent about our economic recovery.”

The Morrison government rejected calls to provide additional financial support during Victoria’s fourth major lockdown in 12 months. Picture: NCA NewsWire/Martin Ollman

Earlier, Mr Merlino gave a stern reply when asked what would happen if the commonwealth again refused to provide financial relief to small businesses and casual workers for at least the next seven days.

“That would be an incredibly poor reflection on the federal government and their support for Victorian businesses and Victorian workers,” he told reporters.

“Victorian workers are crying out for support – we are doing all that we can.”

The state government has announced some financial assistance, doubling its existing support payments for businesses affected by the extension of the circuit-breaker restrictions.

On top of its $250.7m support package announced last Sunday, a new allocation of up to $209.3m will flow to small- and medium-sized businesses. Applications will open on Thursday.

“The funding we have provided on the table will give direct support to businesses either to pay rent, to assist in paying wages, to purchase food and other goods,” Mr Merlino said.

Australian Industry Group chief executive Innes Willox has called on the Victorian state government to drop a new payroll tax levy that would raise more than $3bn. Picture: Supplied

Innes Willox, chief executive of the Australian Industry Group, said another week of lockdown was “soul destroying” for businesses and “really destroying confidence”.

“The feedback from our members was that the government was living in a parallel universe when it came to understanding the hurt it is causing to business and the community,” Mr Willox told the ABC.

He also called on the Victorian government to drop a proposed payroll tax levy that will raise more than $3bn to assist ailing businesses who can ill afford the impost.

The Mental Health and Wellbeing Levy will begin on January 1, 2022 and is targeted at businesses paying more than $10m in wages.

“It is a tax on employment ... it is a tax on confidence for business to invest in the state,” he said.

“It is seen by business as perhaps the most pernicious attacks ... and were the state government to remove that, that would be seen very positively by business.”

Lockdown has been extended by seven days in Melbourne. Picture: NCA NewsWire/Andrew Henshaw

The Acting Premier again put the sword to the commonwealth, urging it to chip in.

“Ultimately, you can only do what we are responsible for in putting forward a significant support package,” he said.

“The ball is in the federal government’s court – Victorian businesses, Victorian workers are demanding that they respond.”

Mr Merlino acknowledged it was a dark time for Victoria, particularly in Melbourne where the lockdown would continue to be enforced, but said strict restrictions were necessary.

“Given the cases that we’ve had and that we are still seeing, the chief health officer had no choice but to put this advice to government, and the government had no choice but to accept,” he said.

“If we don’t do this, this thing (Covid) will get away … This variant of concern will become uncontrollable and people will die.”

There are 67 active cases of coronavirus across the state and more than 350 exposure sites.