‘Domino’ effect: Vic restrictions to hurt national economy

States and territories are being warned of a “domino” effect after Victorian Premier Daniel Andrews released his stringent road map out of lockdown.

Prime Minister Scott Morrison has warned of the domino effect longer coronavirus lockdowns in Victoria will have on nation’s already struggling economy.

Employment, incomes and revenue are all in the firing line with Mr Morrison saying Daniel Andrews’ newly released road map will have a “negative impact”.

Treasury will take the new restrictions into account as they finalise their projections before the October 6 Budget.

“It’s going to have a negative impact,” Mr Morrison said.

“There are domino impacts because of the role that Victoria plays in our national economy through supply chains … that can flow on into other states and territories.”

Mr Morrison said the government would liaise with industry and business to understand the most urgent issues.

“This plan has some very severe impacts,” he said.

“We also have to manage the ability to take people with these plans and we cannot create a burden that is too great to bear, because that would see all the plans fail.”

Australian Industry Group chief executive Innes Willox has condemned the Victorian plan saying it will “prolong the economic and social pain”.

Scott Morrison has put pressure on Victoria to unveil its economic support plan to mitigate the economic consequences of its new road map. Picture: NCA NewsWire/Martin Ollman

Mr Morrison also defended the government’s decision to reduce JobKeeper payments after September 27, despite the renewed restrictions in Victoria.

“The Commonwealth Government has been stepping up each and every day over this COVID-19 pandemic not just to support Victorians, but all Australians,” he said.

“JobKeeper is a national program.”

One million Victorians already supported by the payments are expected to remain on the wage subsidy for longer after the severe outbreak.

But Opposition treasury spokesman Jim Chalmers took a swipe at Treasurer Josh Frydenberg saying it beggared belief that as a Victorian he wouldn’t reconsider his JobKeeper cuts, even as the jobs crisis intensified.

“JobKeeper and other support should reflect what’s actually going on in the economy,” Mr Chalmers said.

“Cutting JobKeeper for millions of workers makes no sense when the jobs crisis is getting worse, not better.”