Coronavirus: Daniel Andrews must now release his fiscal support package

Victorian Premier Daniel Andrews. Picture: Andrew Henshaw

Another potential flashpoint between Daniel Andrews and the Morrison government is threatening.

Within days, it is expected — or at least hoped — that the Victorian Premier will offer a fiscal response to his extended lockdowns to deal with the extra job losses and business closures that will inevitably follow.

Considering the central bank’s call for the states to inject $40bn into the economy was made before Andrews’s so-called roadmap to recovery was announced, the size of the financial commitment will need to be substantial.

The cost of his stage four lockdowns has been costing the national economy another $1bn a week in lost GDP. The Prime Minister has made it clear that the commonwealth will not be the first mover in response to Andrews’s latest and seemingly arbitrary decision.

And his message ran deeper than that. Other premiers and chief ministers cannot expect endless federal bailouts to pay for uninformed border closures and unjustified lockdowns.

Since RBA boss Philip Lowe and Treasury secretary Steven Kennedy’s demands weeks ago for a state fiscal response, there has been a deafening silence from the states and territories.

Despite having agreed in principle, none has put a plan, let alone a cent, on the table.

Andrews is now in the gunsights, and through his own actions and misconceptions he has ensured that he will have to be the first to respond.

The biggest mistake he made this week was to expect that Morrison would support his recovery plan uncontested with unfettered and ongoing income support for Victorians, who have already drawn down more on JobKeeper and Jobseeker than any other jurisdiction in the nation.

Andrews was quickly mugged by reality. “I’d be looking forward to seeing soon … the announcement by the Victorian government about what economic support plan they will be delivering to Victoria to mitigate the economic consequences of the plan that they have outlined,” Morrison said on Monday.

“It is right that the Victorian government makes the first response to set out what economic supports they will put in place to deal with the measures they have put in place.

“Victorians are being supported more by the federal government than any other state and territory. And we will continue to do that. So what is required, over and above the support the commonwealth government is providing to Victorians, we first want to see what the Victorian government will be doing to address that.”

It had been noted in Canberra that the Victorian Treasurer, Tim Pallas, was nowhere to be seen on Sunday when Andrews announced that the stage four lockdown would continue before tapering off sometime before Christmas.

The concern is that Andrews had put little thought to his government’s responsibility in compensating the workers, families and businesses that will be put to the wall due to his decision. This much is obvious. The industry and employer groups this week made it clear that there had been next to no consultation with them that could assuage their fears that the economic consequences were a secondary consideration for Andrews.

This is also not surprising. Andrews has centralised decision making within his own office when it comes to all aspects of the virus.

While it is not a good way to run a government in a crisis, in some part it is understandable that Andrews focused on the health plan first, with a view to addressing the business concerns later.

But the structure almost ensured that there was no way he could do both at the same time.

It also highlights another striking inadequacy of the Victorian government’s total response to the crisis.