Coronavirus: Hospitality industry hammered by Victoria lockdown

Victoria’s fourth lockdown triggered a 10 per cent plunge in hospitality jobs, according to new data from the ABS.

The latest payrolls figures from the ABS show the impact on employed Australians during Melbourne’s fourth lockdown. Picture: NCA NewsWire / David Crosling

About 20,000 hospitality workers were stood down or lost their jobs in Victoria after the state’s fourth lockdown forced the closure of cafes, restaurants, pubs and clubs early this month.

New Australian Taxation Office weekly payrolls figures, published by the Australian Bureau of Statistics, revealed a 10 per cent plunge in the number of accommodation and food services employees paid over the fortnight to June 5 – a period that included the first nine days of the state’s two-week lockdown.

According to the ABS, there were just shy of 200,000 people employed in Victoria’s hospitality industry in February.

Employees on the ATO’s single-touch payroll system cover 80 per cent of workers, but a 10 per cent drop in roles across the ­accommodation and food services industry would imply that 20,000 Victorians were either stood down or let go.

Westpac economist Justin Smirk said that with no JobKeeper, “firms may have a higher propensity to shed workers during periods of revenue stress”.

The state’s severe social distancing restrictions, which included stay-at-home orders for households, also triggered an 8 per cent drop in the number of payroll jobs in the arts and recreation sector – about 3000 jobs.

“Almost every industry in Victoria saw a fall in payroll jobs during this period,” ABS head of labour statistics Bjorn Jarvis said.

But ANZ senior economist Catherine Birch said the employment hit would not derail the ­labour market recovery in the state, where unemployment fell to 4.8 per cent in May.

“Even if we see some employment losses in June because of the restrictions, we should see workers reinstated or find work relatively quickly given the strength of the labour market,” Ms Birch said.

The Australian has revealed that about 43,000 Melbourne workers who lost income during the second week of the lockdown applied for the commonwealth Covid-19 disaster relief payment. Restrictions also triggered a $120m drop in retail turnover in May, ABS data released on Monday showed, while consumer confidence has also taken a hit.

Overall, the number of weekly payroll jobs in Victoria fell 2.1 per cent over the fortnight to June. Nationally, jobs fell by 0.9 per cent, the ABS report showed.

As Sydney grappled with the news on Tuesday of a further 10 Covid cases, KPMG chief economist Brendan Rynne said Tuesday’s job numbers were a warning to state authorities of the economic damage of harsh lockdowns.

“The Victorian government needs to recognise that shutdowns are not costless,” Dr Rynne said.