Business hits out at latest Victorian lockdown as Melbourne CBD shuts down
Melbourne could suffer a sustained economic downturn as business leaders warn small business will bear the brunt.
Melbourne-based business leaders have warned that Victoria is falling further behind in terms of the recovery, with the stop-start lockdowns set to undermine any confidence that was starting to come back following last year’s extended closures.
Business leaders hit out at the uncertainty generated by repeated lockdown orders with uncertain duration.
In a sign that business confidence in the state is waning while other parts of Australia have the virus under control and are seeing economic activity increase, leaders questioned the approach to management of the pandemic taken by the Andrews government.
“Why are we getting this so wrong?” Melbourne businessman David Smorgon said in an interview with The Australian. “Why is Victoria, on almost every criteria you could come up with, doing it worse than NSW?
“The question needs to be asked why is NSW able to cope and deal with this situation in a much better way than Victoria is on every single criteria, whether it be the number of cases, to the number of deaths, to the number of people in quarantine?”
Mr Smorgon said NSW had shown the ability to lock down certain parts of the state in response to COVID-19 outbreaks “and yet we go into total lockdown which obviously has a lot more consequences for everyone in business trying to earn a living.”
JB Hi-Fi chief Richard Murray, who is based in Melbourne, despaired at the damage to small business caused by the latest five-day lockdown in Victoria and added that hotel quarantine in the state needed to be improved.
Victoria recorded one new locally acquired case of coronavirus in the 24 hours to Monday, with the cluster from the Holiday Inn increasing to 17.
“I focus on what I can control, but I do acknowledge that for some of these small businesses that are just getting back on their feet it is pretty uncomfortable and we need to find a way to do hotel quarantine in Victoria better,” Mr Murray told The Australian.
“I have no doubt across the board all the health authorities are doing their best in difficult times, I don’t want it to be seen as a criticism, but we do seem to have had more of a challenge in Victoria than other states.
“And I think the economic costs of these lockdowns for many small businesses is massive.”
His comments come after Wesfarmers CEO Rob Scott last week asked for the federal government to step in with a national hotel quarantine standard.
Meanwhile, Mr Smorgon said the Victorian economy had been “remarkably resilient” so far in the face of several COVID-19 lockdowns. “But we are starting to get concerned about why we are getting it so wrong compared with our neighbour state in NSW.”
He noted there had been no warning about the weekend lockdown and so far no talk of any compensation for businesses affected by it.
Property trust GPT warned that Melbourne’s central business district was lagging in its recovery when compared to Sydney.
The company — along with rival Vicinity Centres, which co-owns Chadstone alongside billionaire John Gandel — has taken a hit due to its heavy exposure to the Victorian capital.
GPT also warned about the latest disruptions, which have set back the recovery of the city centre amid forced delays for some major projects.
GPT chief executive Bob Johnston said Melbourne’s latest lockdown was “very disruptive” for retailers and he had hoped for an approach more in keeping with other states.
“I understand the health concerns, but would’ve liked a little bit more of an approach like in NSW,” he said.
Most of GPT’s malls bounced back strongly in the wake of earlier lockdowns, but its Melbourne CBD property, Melbourne Central, has struggled to perform.
The brief lockdown is yet to bite into the city’s booming land sales market and residential developer Stockland said that while there was a slight decrease in inquiries last weekend, demand remained supported by strong fundamentals in the Victorian market.
But the booming auctions market could be crimped if the lockdowns drag on.
REIV president Leah Calnan said if restrictions extended beyond Wednesday, the government needed to make concessions for the real estate sector to allow private inspections by appointment.
“Without inspections, buying and leasing cannot proceed, keeping many people out of appropriate housing and pushing many vendors and investors to the brink,” Ms Calnan said.
Property Council of Australia Victorian executive director Danni Hunter said that if the lockdown extended beyond three business days, costs would rise exponentially.
“We’re very concerned that a stop-start approach has been applied to our industry when there was broad acceptance [in previous lockdowns] it had a role to play,” Ms Hunter said.
With the latest Victorian lockdown extending beyond the city it would see more than $1bn in lost retail trade, the chief executive of the Australian Retailers Association, Paul Zahra warned.
He said the past weekend would have been one of the busiest in the year for local businesses with a combination of Valentine’s Day and Lunar New Year celebrations.
“Instead, a lot of businesses are out of pocket and have had to dump fresh produce,” he said. “We certainly hope this lockdown doesn’t go on for longer than it needs to. Victorian retailers have had enough of it, given the hellish 12 months they’ve been through.”
Mr Zahra said Australia had to learn to live with COVID and “manage things in a responsible way without devastating business and livelihoods.”
He endorsed calls for consistency from state and territory governments about COVID restrictions. “At the moment, businesses are at the mercy of the different approaches from the various premiers with very little planning time around what the latest restrictions mean,” he said.
“The uncertainty and confusion around ‘trigger points’ has been a confidence killer and one of the key lessons out of this pandemic is to have a nationally consistent approach, with clear criteria, so business can at least operate with some sort of certainty.”
Additional reporting: Eli Greenblat
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