Victorian retailers brace for $2 billion hit from extended Melbourne lockdown

Retailers in Melbourne are bracing for a multi billion dollar hit as the fourth Victorian Covid lockdown drags on.

Victorian retailers are bracing for the worst as the extension of Melbourne’s lockdown is set to cause billions of dollars worth of damage from lost sales. Picture: Daniel Pockett/Getty Images

Victorian retailers are bracing for the worst as the extension of Melbourne’s lockdown is set to cause billions of dollars worth of damage from lost sales.

The Australian Retailers Association warns $2bn will be lost in retail trade as result of the extended lockdown, with the peak industry body saying tailored support from the federal government was needed to ensure businesses did not fall off a financial cliff.

The association’s plea comes after the Victorian government pledged a further $209m to help small- and medium-sized businesses stay afloat.

“The funding we have provided on the table will give direct support to businesses either to pay rent, to assist in paying wages, to purchase food and other goods,” Acting Premier James Merlino said on Wednesday.

Melbourne’s lockdown has been extended by seven days. Picture: William West/AFP

Mr Merlino has also put pressure on the federal government to do more to support Victorians out of work.

ARA chief executive Paul Zahra said the back and forth blame game between the state and federal government was not helping and the response should be focused on assisting the nation’s second largest economy overcome the outbreak.

Melbourne and the greater state of Victoria was thrown into a lockdown after a Covid-19 outbreak in the city’s north more than a week ago.

The cluster has grown to more than 60 cases.

ARA chief executive Paul Zahra said the back and forth blame game between the state and federal government is not helping anyone. Picture: Britta Campion/The Australian

“We need to work together and find a solution that supports people and businesses — and find a solution that gets our Covid recovery back on track,” Mr Zahra said.

“Victoria can’t do this alone. The federal government has done a great job to keep businesses afloat through JobKeeper and we need them to step up to the plate again.”

Gross domestic product figures released on Wednesday showed economic activity in the March quarter had rebounded to above pre-pandemic levels.

GDP for the March quarter rose 1.8 per cent compared to the prior corresponding period.

Mr Zahra also said the Victorian government should reconsider its planned tax increases unveiled at the last month’s state budget because the additional cost would place greater pressure on firms.

Acting Victorian Premier James Merlino announces an extended lockdown after a South Australian hotel quarantine breach spread to Victoria. Picture: NCA NewsWire/Ian Currie

“Applying a payroll tax surcharge on businesses will just place them under even more pressure and will put jobs at risk,” he said.

The ARA said JobKeeper should be deployed during sudden lockdowns.

“This isn’t just about Victoria,” Mr Zahra said.

“This is about other states and territories who might have to deal with state-imposed lockdowns and restrictions, should new cases emerge in the community.

“A scheme like JobKeeper should be a lifeline that can be activated when it’s needed.”