Coronavirus: Victoria’s new lockdown could cost $1 billion a week, Treasurer says

Victoria’s second lockdown could cost $1 billion a week, risking the nation’s economic recovery, according to Treasurer Josh Frydenberg.

Treasurer Josh Frydenberg said Victoria’s second lockdown poses a real risk to the nation’s economic recovery, stating that the move could cost about $1 billion a week.

“When I made a statement to the parliament in May I talked about the economic cost of a lockdown being about $4 billion dollars a week, and given that Victoria is about a quarter of the national economy, then you’re talking about an impact of around a billion dollars a week for the Victorian economy alone, which is very significant,” he told The Australian.

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In May, Mr Frydenberg told the National Press Club the economy would suffer a $4 billion hit for every extra week the lockdowns remained in place.

Asked if he would consider extending the JobSeeker and JobKeeper payments, Mr Frydenberg said he would flag “providing further income support for those who need it” when he delivers his mini-budget on July 23.

“We will be providing further income support for those who need it – it will be targeted, it will be temporary,” he said.

Treasurer Josh Frydenberg said Victoria’s second lockdown poses a real risk to the nation’s economic recovery. Picture: Lukas Coch/AAP

Yesterday, Victorian Premier Daniel Andrews touched on the looming economic disaster in a press conference.

“No-one wanted to be in this position. I know there will be enormous amounts of damage that will be done because of this. It will be very challenging,” he said.

He said he had spoken with Prime Minister Scott Morrison about potentially extending JobKeeper for Victorian residents.

“I had a conversation with the Prime Minister … I am confident that the Prime Minister knows and understands that there will be different forms of hardship in different parts of the country, different industry, different sectors,” he said.

“I’m confident the Prime Minister knows that and that he and his colleagues are looking to design whatever the next series of decisions that they make, whatever those new or different policy settings are.

“I think he is going to be guided by that hardship just as we are, where there is hardship you have to have a response that is appropriate to that and that means that you have got a set of policy, a set of tools that where they’re needed most they will make the most difference.

“That may well be, given our circumstances, that may well be of additional benefit because we have additional need now and of course into the future.”

During the press conference Mr Andrews also remained tight-lipped over comments made by NSW’s Police Minister David Elliott that Victoria should foot the bill for the border closure.

Meanwhile, Commonwealth Bank economist Gareth Aird told the Australian Financial Review the Victorian lockdown would be a “significant hit” to the wider economy.

“Given the shutdown is expected to last six weeks it could be expected to shave 1 per cent off Q3 20 GDP,” he said.

Nearly five million residents of greater Melbourne and the Mitchell Shire have entered a very different world, with a new six-week lockdown set to come into effect.

Premier Daniel Andrews reinstated stay-at-home restrictions across metropolitan Melbourne and Mitchell Shire, to the north of the city, to start from 11.59pm on July 8.

He announced 191 new cases of COVID-19 on Tuesday including 154 under investigation.

None of the cases were detected in returned travellers in hotel quarantine in a worrying development showing the virus is established in the community.

There are 772 active coronavirus cases in Victoria and 35 people are in hospital. Nine of those patients are in intensive care.

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The restricted areas are: Banyule, Bayside, Boroondara, Brimbank, Cardinia, Casey, Darebin, Frankston, Glen Eira, Greater Dandenong, Hobsons Bay, Hume, Kingston, Knox, Manningham, Maribyrnong, Maroondah, Melbourne, Melton, Mitchell Shire, Monash, Moonee Valley, Moreland, Mornington Peninsula, Nillumbik, Port Phillip, Stonnington, Whitehorse, Whittlesea, Wyndham, Yarra and the Yarra Ranges.

“2020 has not been the year any of us wanted,” Mr Andrews said when announcing the news.

“Cancelled events. Plans put on pause. Uncertainty about what the future holds.

“And I guess that’s why so many people want to pretend this is over.”

He stressed the stay-at-home direction applies to principal places of residence.

“That means no escaping to holiday homes,” Mr Andrews said.

According to a summary of the restrictions, second places of residence outside restricted areas cannot be visited except for limited exceptions such as an emergency or maintenance, shared custody, or to stay with an intimate partner who does not live with you.

No one in the impacted areas is allowed to have private gatherings with visitors, and public gatherings are limited to ‘two people or household members only’. Picture: William West/AFP

The state’s chief health officer Professor Brett Sutton said Victorians have got “six very difficult weeks ahead”.

The new directions are to continue until 11.59pm on August 19.

No one in the impacted areas is allowed to have private gatherings with visitors, and public gatherings are limited to “two people or household members only”.

“For people who live in regional Victoria, where case numbers remain low, current restrictions will remain the same for now,” Mr Andrews said.

Regional Victorians cannot enter restricted areas except for “necessary purposes” – necessary goods or services, work and education if necessary, medical care or compassionate reasons.

The “four reasons to leave” home are to shop for food and other essential items; attend work or school (if it can’t be done from home); medical or caregiving; and exercise – though it must be inside the metropolitan area.