This was not part of the Prime Minister's plan.
Two weeks ago, as the dreaded coronavirus curve in Victoria began climbing its second, even steeper mountain, Scott Morrison urged calm and a continued reopening of the economy.
"There will be outbreaks", he observed, "and what can't happen is we can't go, stop, go, stop, go".
A fortnight on, it's looking rather dark once again — at least here in Melbourne.
It won't be the steady path we'd hoped for
The reimposition of restrictions for another six weeks has been met with a collective groan across the city, an acceptance there's no other choice and some anger towards Premier Daniel Andrews for how this happened.
Above all, there's greater anxiety this time about the alarming level of community transmission.
"We're in a very different phase," the new Chief Medical Officer Paul Kelly said on Friday.
The problem is no longer international arrivals, but the way the virus is spreading within the population.
On Friday, 288 new cases were recorded in Victoria. That's by far the highest daily count in any state since the arrival of the coronavirus.
This should arguably mean even greater community caution than during the first lockdown: fewer trips to the local shops or cafés and fewer visits to the workplace.
For many businesses, this shutdown is a far worse hammer blow.
Hopes of a steady path back towards something resembling normal turnover have been replaced by fears we're in for exactly the sort of stop-start scenario the Prime Minister said we couldn't allow.
We're in for another 'wave' of support
For some, it's too much to bear. One Melbourne cafe owner I spoke to shut up shop on Friday, after struggling through the past few months with only a trickle of customers.
He might reopen in another three or four weeks if things improve, but sees no point persisting with mounting losses in the meantime.
Victoria accounts for roughly a quarter of the Australian economy, so the reimposition of restrictions and the added blow this time of a border closure with New South Wales is a major setback to the national recovery.
It could drag out the recession and will mean the Federal Government needs to offer more support.
The Prime Minister dropped his talk of an economic "snap back" long ago and now accuses the opposition of "fear mongering" by suggesting economic support will come to an end in September.
Yet it was Scott Morrison who for months insisted JobKeeper and JobSeeker were only "temporary and targeted" supports which would come to an end in September.
Now we're assured there will be another "wave" to follow.
A collapse in confidence will only prolong the downturn
The details of this federal help are still 11 days away, to be unveiled in an economic statement by the Treasurer on July 23.
Exactly how this next wave will be structured remains unclear. The Commonwealth can't restrict its support to one state, nor can it target just a few industry sectors, given the widespread damage still being inflicted.
This is likely to be another economy-wide measure to help all those in need, most likely at a lower rate than the $1,500 a fortnight JobKeeper level and tapering down over time.
This new community transmission phase of the crisis, stemming from Victoria, complicates an already difficult set of decisions for the Federal Government.
The next wave of support will have to be enough to keep businesses and workers afloat in a moment of even greater anxiety than many faced back in March.
A further collapse in confidence will only prolong the downturn.
Against that, the Federal Government doesn't want to hold back a necessary transition in the economy by spending too much money propping up "zombie" businesses that have no realistic chance of survival.
The Prime Minister and Treasurer won much praise in March for erring on the side of big spending, rather than being ideologically fixated on fiscal restraint.
If Scott Morrison truly is a pragmatist, he'll do the same again.
David Speers is the host of Insiders, which airs on ABC TV at 9am on Sunday or on iview.
No comments:
Post a Comment