Covid-19 lockdowns cast long economic shadows

Successive lockdowns in Victoria risk dealing a cumulative blow to the state’s economy, with fears that consumer confidence has been exhausted after three lockdowns in two-months.

‘We’re seeing the impact in the numbers every day,’ says Legoland and Melbourne Aquarium general manager Katie Isaac. Picture: Aaron Francis

Successive lockdowns in Victoria risk dealing a cumulative blow to the state’s economy, with fears that consumer confidence has been exhausted after three lockdowns in two months.

AMP Capital chief economist Shane Oliver said the seven-day lockdown would cost the economy about $1bn in lost revenue after Victoria had slowly begun to recover from the fifth lockdown that ended at midnight on July 27.

Mr Oliver said a shorter lockdown would cause less damage than a long one but said each lockdown added to the last, risking structural damage if businesses folded and jobs were lost.

“They [lockdowns] sort of layer up on top of each other and accumulate and that might have a negative impact above the $1bn I’m referring to through the course of the lockdown,” he said.

He said federal and state government support would offset some economic damage.

Legoland and Melbourne Aquarium general manager Katie Isaac said following the end of the 112-day lockdown in October 2020, there was a groundswell of support within the community to help the state recover but it was getting harder to regain momentum as consumer confidence remained low.

“We’re seeing the impact in the numbers every day from our side,” she said. “We’re trying to build that momentum but it’s hard with the instability right now and people knowing if a couple cases pop up, we’re probably going to go back into lockdown.”

Before the pandemic, the aquarium would see 4500 visitors a day on a good weekend while Legoland would see 2000.

KPMG head of restructuring James Stewart said the full impact on business would unlikely be known for some time as most owners were in survival mode but the vaccine targets of 70 and 80 per cent set by the federal government offered a pathway for consumer confidence to return.

“I think that … will come back when they [consumers] believe that the pathway is actually real and achievable,” he said.

The Victorian and federal governments announced a jointly funded $400m package on Friday, with 90,000 businesses ­expected to automatically receive payments of $2800, and between $5000 and $20,000 available to nearly 9000 hospitality venues.

The new funding is in addition to a $400m package announced last week to offset the impact of the state’s fifth lockdown.

Jobs Minister Martin Pakula said enhanced collaboration between the state and federal governments meant the relief package could be cobbled together as Victoria entered its sixth lockdown. “When the commonwealth goes in with us, it does make life much easier,” he said.

Victorians workers who lose more than 20-hours of paid employment over the next week will be eligible for the disaster payment of $600. Those who would have worked less than 20 hours can receive a payment of $375.

Victorian Chamber of Commerce and Industry chief executive Paul Guerra said he hoped the new money was enough to see businesses through another week of lockdown.