We are hardest hit

Victoria’s economy likely to be the worst-performing

VICTORIA looks likely to be the worst-performing state economically through the COVID crisis.

Deloitte’s June quarterly report found that while the first wave of coronavirus lockdowns had the biggest impact on NSW via hits to the service sector, Victoria was soon to be feeling the most pain. “Victoria is likely to take the unwanted title of worst performing state through the COVID crisis,” the report read.

“Population, once a key growth engine, has well and truly stalled.

“The need for tighter restrictions has sent job losses soaring and consumers hanging onto their cash rather than spending it.”

Beloved Fitzroy stationery shop Zetta Florence echoed this sentiment.

Manager Issy Knightley said the business has seen a turnover drop of between 50 and 75 per cent despite a loyal customer base. “It’s been intense,” she said. “It was sort of OK opening up the first time but the second spike, it has really hit us hard.

“If we close again, the likelihood is that we won’t open again. We can’t survive closing again.”

Only two of the shop’s 12 staff were eligible for the Federal Government’s JobKeeper scheme.

The Deloitte report found a “toxic” combination of high debt, unemployment and low confidence in 2020 has hit Australian families hard, even though it is possible the recession has “already passed its worse”.

Economists estimate inflation will remain low.

Treasurer Josh Frydenberg said recovery would be slower in some sectors, and the government would focus supports in those areas.

Victoria’s community transmission was of concern.

“These are encouraging signs as our economy begins to reopen as restrictions are eased, but we must continue to be vigilant as the recent spike in cases in Victoria illustrates,” Mr Frydenberg said.

“We will continue to do all that is necessary to ensure Australia bounces back stronger on the other side.”

Labor Treasury spokesman Jim Chalmers said the Morrison Government needed to make clear its plans for the scheme post September for the sake of Victorian businesses.

“Millions of workers and thousands of businesses are anxious about being left out and left behind in Australia’s first recession in three decades,” he said.

Mr Frydenberg is expected to unveil the government plan for the future of the JobKeeper payment at its July 23 budget update.