Victorian economy to lose $1b a week, house prices to plunge


Grim forecasts show Victoria’s economic output is predicted to plummet by $32 billion over the next six months, plunging the value of the average Melbourne house and sending unemployment soaring in one of the worst crises in the state’s history.

Victoria’s economic output is forecast to drop by $32 billion — or more than $1 billion a week — over the next six months.

The state government will on Wednesday release the first official figures on the devastating consequences of the pandemic, combining the economic downturn with a fall in property values and a rise in unemployment.

Modelling by the Department of Treasury and Finance has forecast Gross State Product to be 14 per cent lower than the pre-virus predicted $226 billion for the June and September quarters. The revised figure puts the state’s economic output at $194 billion.

Property prices are expected to fall by as much as 9 per cent, which would cut almost $80,000 off Melbourne’s $860,000 median house value.

There are also fears up to 270,000 more Victorians will be out of work, and the unemployment rate is now tipped to more than double — and peak as high as 11 per cent.

The crisis is one of the worst in the state’s history.

It comes as Prime Minister Scott Morrison revealed the federal government had processed 517,000 claims for unemployment benefits since March 16. By the end of this week, it will have processed as many JobSeeker claims in six weeks as it would usually handle in a year.

“That is half a million people who are needing that payment and needing that support,” Mr Morrison said.

Camera IconPremier Daniel Andrews said the government would ‘stand with every Victorian affected by this crisis and support them through to the other side’. Credit: News Corp Australia, Nicole Cleary

Victoria’s GSP was forecast to grow by 2.5 per cent in 2019-20 and by 2.9 per cent in 2020-21 before COVID-19 struck.

The government is now preparing for a much longer economic recovery period than initially expected.

Premier Daniel Andrews said the government would “stand with every Victorian affected by this crisis and support them through to the other side”.

“This modelling paints a bleak and devastating picture for our economy,” Treasurer Tim Pallas said. “But in Victoria we have the capacity to help those who need it most and recover.”

Mr Pallas said Victoria was well positioned to help businesses, workers and their families get through this crisis.

Department of Treasury and Finance secretary David Martine said the modelling would help the government plan for an economic recovery.

As part of the recovery the government will seek $24.5 billion to set up an emergency fund when parliament sits on Thursday.

Announcing the fund last week, Mr Pallas said Victoria was well placed economically and maintained its AAA credit rating.

But he said he had been warned that could be affected by Commonwealth debt.

The government’s investment in infrastructure is also expected to form a significant part of the economic recovery.

PARENTS LOCKED OUT OF ‘FREE’ CHILDCARE

Families desperate for childcare say they have been locked out of the sector despite a change to government funding designed to safeguard places for parents returning to work.

Coronavirus chaos at childcare centres led to plunging enrolments, with the Morrison Government forced to step in early this month with a $1.6 billion package to keep operators going.

The new funding system provides about 50 per cent of centre subsidies for enrolments they had on March 2, which meant those that experienced an exodus of parents after that date weren’t disadvantaged.

The changes meant care was free for parents who had places secured, but has left other parents struggling to find care due to operators cutting back hours to meet new funding levels.

Intensive care nurse Michelle Grigoriadis has been unable to find care for her two boys in the Thornbury area, but has had to stop the children’s grandparents from being carers because of the COVID-19 crisis.

“I have contacted private and council-run facilities, as well as Darebin Council, and have been told there are no places available,” she said.

“I am feeling frustrated as there are people receiving free childcare and not even sending their kids to be cared for. I just want to get back to work and am happy to pay my way.”

Michelle Grigoriadis, with her sons Maverick, 3, and Archer, 1, is an ICU nurse who has been off work for six weeks because she can't get childcare.
Camera IconMichelle Grigoriadis, with her sons Maverick, 3, and Archer, 1, is an ICU nurse who has been off work for six weeks because she can’t get childcare. Credit: News Corp Australia, David Caird

Federal opposition early education spokeswoman Amanda Rishworth said many other families who had previously had help from grandparents now needed childcare, while some mums were “unenrolled” before they could return to work or had hours cut.

“Lack of access to child care should not be a barrier for parents to work, especially nurses and other essential workers who need to be working now more than ever,” she said.

Education Minister Dan Tehan said centres with an increasing attendance should consider applying for supplementary payments under exceptional circumstances provisions.

“As the new system is bedded down, the Government is working with providers and the sector to ensure that demand for services is met, particularly where it relates to the children of essential workers and vulnerable children,” he said.

“Services that increase attendance beyond the enrolments in the reference period of the package may be eligible for a supplementary payment for exceptional circumstances.”

In response to families struggling to find centres with places available, Mr Tehan on Tuesday launched a new government-funded helpline — 1800 291 041 — to provide advice on locally available operators.

Victorians who have tested positive for COVID-19 are not being monitored to find out whether the virus returns.

There are concerns the killer virus could strike twice but Victorian authorities have no plans to test patients who have recovered.

In South Korea at least 179 coronavirus patients have again tested positive for the dangerous bug.

But Victoria’s Chief Health Officer Brett Sutton said the results of the South Korean study had to be treated with caution.

“We do know from SARS, a closely related coronavirus, that infected individuals appeared to develop immunity for some years,” Prof Sutton said. “People with COVID-19 are developing antibodies and re-exposure with this coronavirus in an animal study demonstrated that reinfection did not occur.

“Victoria and other jurisdictions are working on the assumption that there is immunity at least for some weeks after infection.

“While we expect there to be a reasonable period of protection we don’t yet know exactly what that protection is or how long it’s going to last.”

Prof Sutton said Victoria would follow the evidence and consider whether a national research project was needed.

Victoria’s Chief Health Officer Brett Sutton says Victoria and other jurisdictions are working on the assumption there is immunity at least for some weeks after infection.
Camera IconVictoria’s Chief Health Officer Brett Sutton says Victoria and other jurisdictions are working on the assumption there is immunity at least for some weeks after infection. Credit: News Corp Australia, Mark Stewart

He said there was evidence people who had recovered and re clinically well were not infecting others.

People who have tested positive and can provide medical clearance are also eligible to apply for an exemption from serving mandatory quarantine.

Six exemptions have been provided due to coronavirus immunity, including a couple who spent four weeks in isolation in Austria after testing positive to COVID-19.

On their return to Melbourne last week they were still forced to quarantine for a week while Austrian medical documents were translated.

It comes as Prime Minister Scott Morrison said the National Cabinet had backed a tracing app “in principle”.

“There are a few more hurdles for this to clear, but it was absolutely seen as an important tool,” he said.

“This does three things. Firstly it protects Australians in their own health and those of their own family by participating in this process.

“Secondly, it helps other Australians to keep them safe and, thirdly, it ensures that we can more effectively get back to a more normal setting where we have widespread take-up of this app.”

Mr Morrison said the app data could only be accessed by state health departments.

HOW DOES THE COVID-19 TRACKING APP WORK?

It does not track your location, but uses Bluetooth to identify when a person comes into close contact — about 1.5m — with someone else who also has the app installed and makes a log of the interaction if it lasts for at least 15 minutes.

The app collects four things — a name, mobile number, age and postcode.

The postcode is used to determine which state or territory health authority should be sent the contact tracing information.

Government Services Minister Stuart Robert said the app essentially digitises a current “manual process”.

“If you contract the virus, health officials will sit down (with you) and say ‘who have you been close to? Who have you chatted with? Who have you spent time with?’,” he said. “The COVID trace app digitises that.”

WHERE IS THE DATA STORED?

Once the app has collected the name and number of the other person with the app a user has come into contact with, the data is encrypted and stored locally on their phone. If that user tests positive for COVID-19, health authorities will request permission to access the log for contact tracing.

The data will go to a secure national data store, and then straight to the state or territory health authority for teams of health workers to start alerting others who may have been exposed to the virus. When a person deletes the app from their phone the data would also be deleted.

The Federal Government has also said it will be deleting the national data store after the pandemic.

PRIVACY: WHO CAN SEE THE DATA?

The user will not be able to read the log of people that they have been in contact with at any time. Mr Robert said the data will only be accessed by local health authorities in the relevant state or territory.

“I’m not interested in where you are on the face of the earth,” he said. “State Health authorities are (only) interested in who you’re with for the purpose of determining whether they’ve got a potentially life-threatening virus, so it’s nothing to do with government knowing where you are. It’s a health response. The data can only be used for health purposes, and once it’s been used, it gets destroyed.”

More details about the app are expected to be released by the government in the coming weeks.

ELECTIVE SURGERIES TO RESUME

Elective surgeries suspended during the coronavirus crisis will start again on Monday, with hospitals expected to reopen about a quarter of operating waiting lists.

Joint replacements, IVF treatments, cataract surgeries, post-cancer reconstructive procedures and all operations required by children will be the focus of what Prime Minister Scott Morrison said would be a gradual restart to help patients in need.

But he said other restrictions put in place by the national cabinet to tackle the pandemic — including business closures, social distancing rules and limits on gatherings — would remain in place until at least May 14.

‘Our plan is working, our plan is saving lives and livelihoods,” Mr Morrison said.

“We need to stick to our plan.”

Chief medical officer Professor Brendan Murphy said authorities were concerned at the ‘lack of attention to non-COVID-related medical conditions’.
Camera IconChief medical officer Professor Brendan Murphy said authorities were concerned at the ‘lack of attention to non-COVID-related medical conditions’. Credit: AAP

He said states with tougher measures than the national cabinet’s baselines, including Victoria, could look to ease those rules before the middle of next month. Victoria’s state of emergency, used to enforce unprecedented stay-at-home laws, is currently in place until May 11.

Category two and three elective procedures — required within 90 days and within a year — have been suspended since March 26 to free up beds in the event of an influx of coronavirus patients and preserve supplies of personal protective equipment for health workers.

Victorian Health Minister Jenny Mikakos said she would work with health services to implement the restart in a safe manner, with all category two and some important category three procedures allowed to proceed.

“This will happen in a staged process — beginning with those that are most urgent within the expanded categories,” she said.

About 50,000 Victorians had already been on those waiting lists at the start of the year.

Endoscopy and colonoscopy procedures, screening programs for cancer and other diseases, eye surgeries and dental work including basic fillings and fitting dentures and braces have also been cleared to restart.

Chief medical officer Professor Brendan Murphy said authorities were concerned at the “lack of attention to non-COVID-related medical conditions”, and that the “gentle, careful start” was “incredibly important”.

“Some elective surgery is life-saving … Some people are seriously disabled with hip and knee problems, some people can’t see because of their cataracts, some people need surgery and have been waiting for it,” he said.

“This is an opportunity in a safe and controlled manner to slowly restart.”

Minister Health Jenny Mikakos said she would work with health services to implement the restart in a safe manner.
Camera IconMinister Health Jenny Mikakos said she would work with health services to implement the restart in a safe manner. Credit: AAP

The new rules will be reviewed in two weeks and in four weeks to make sure patients are not causing coronavirus outbreaks, and that hospitals have enough equipment and capacity to handle elective surgeries.

Number 1 Fertility director Dr Lynn Burmeister said she was “ecstatic” for patients who had been through “a horrible time” as they were forced to delay efforts to have children.

“We were sort of preparing to close our lab for a few months,” she said.

“(Now) it will mean that we can recommence their treatment … We’re ecstatic for our patients. It’s amazing news.”

Federal Health Minister Greg Hunt said Australia’s growth rate of new coronavirus cases had been kept below one per cent for nine consecutive days — “a sustained and consolidated flattening of the curve”.

But Mr Morrison said the national cabinet had set “clear markers” for social and economic restrictions to be eased.

This includes boosting testing, tracing and local response capabilities, and suppressing the virus reproduction rate so that each infected person produces less than one other new case.

james.campbell@news.com.au



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