Vic Premier Desperate Dan Set To Screw Up Recovery, New Report
Victoria’s failure to contain the spread of COVID-19 will see retailers face a new threat that could affect the overall profitability of several major retail groups where Victoria is a major contributor to their revenues according to analysts.
The problem has been blamed on left wing socialist Premier Daniel Andrews who has strong links with China and chose unskilled security workers over Australian Defence Force (ADF) personnel offered by Prime Minister Scott Morrison to manage lockdown premises and people returning from overseas.
Up until now consumer electronics, hardware and appliance sales have been strong despite COVID-19. Now Melbourne based audio, CE and appliance distributors are facing lockdowns that could affect supply across Australia claim observers.
Now Andrews who appears to be more interested in his political position in the Labor State Government, is being blamed for the stalling of a recovery that was being driven by NSW and Queensland who are lifting lockdowns while Andrews is implementing new lockdowns using Qantas and Jetstar staff over trained ADF and Police with the power to arrest people who fail to comply with orders.
A Deloitte Access Economics Business Outlook report claims that the problems in Victoria will stall Australia’s recovery, with the state’s health crisis, combined with a drop in migration and crash in consumer spending, threatening the nation’s economic growth and delaying reopening international borders.
The report predicts economic growth will contract by 3 per cent in 2020 but says Victoria will be one of the hardest hit as it plunges into lockdowns sparked by the new COVID-19 outbreak in Melbourne.
Currently Victoria, accounts for one- quarter of the nation’s GDP, and the new lockdowns will deliver a major blow to the Andrews government when it hands down its budget later this year and trigger ripple effects across Australia.
Deloitte Access Economics partner Chris Richardson said Australia’s economy had been hit by a COVID-19 “sledgehammer” and was being “held together by lots of sticky-tape”.
“Victoria is likely to take the unwanted title of worst performing state through the COVID crisis. Population, once a key growth engine, has well and truly stalled,” Mr Richardson said.
“And Victoria’s case numbers were spiking as we went to press. The need for tighter restrictions has sent job losses soaring and consumers hanging on to their cash rather than spending it. Infrastructure is the bright spot in this dark near-term outlook until the economy can open back up.”
In the Deloitte report, titled Fast crisis, slow recovery, Mr Richardson said there was no point in keeping businesses alive through JobKeeper if they were destined to shut.
“Wage subsidies gradually become less helpful the longer they’re used as emergency support. There are rising costs in simply keeping zombie jobs alive.
“That doesn’t say pull back overall spending support, but it does say this particular type of support should gradually fade in importance in our defence against the virus. Keeping JobSeeker stronger for longer will be vital in filling the cracks as emergency safety nets morph or disappear.”
Mr Richardson said the government would need to continue rolling out targeted packages similar to its infrastructure and Homebuilder stimulus packages to ensure that too much support didn’t end at the same time.
“In some cases, that may mean an earlier end, but in most cases it’ll be later. And we should phase support out where we can,” he said. “Some type of ongoing wage subsidy — a JobTweaker — will be needed, too, limited to a rather smaller range of businesses (such as those tied to international borders). And the dollars per person may need to be lower too.”
“The Morrison government’s failure to take workers and employers into their confidence about their secret plans for after September has created too much uncertainty and seen businesses shed jobs and push more workers into jobless queues.
“Support could be better targeted or tapered, but it shouldn’t snap back on an arbitrary timeline which doesn’t reflect the reality in workplaces and communities.”
“Deloitte forecasts the Australian economy to contract 3 per cent in 2020 before bouncing back 4 per cent in 2021,” he said. “This is an upgrade of 2.2 percentage points in 2020 and 2.8 percentage points in 2021 compared to its March forecasts.
“These are encouraging signs as our economy begins to reopen but we must continue to be vigilant as the recent spike in cases in Victoria illustrates.”
Mr Richardson, who said the “recession may well have passed its worst”, warned of “phantom menaces”, including a push to pay off the new debt quickly, which he said was not “smart play” because it would flatten the economy.
“Another phantom menace is the belief that even if we don’t pay off the debt, we have to raise taxes and cut spending to fix the budget. That’s completely wrong, and it unnecessarily scares the punters.”