Australia Warns of Economic Pain as Lockdown Extended

Australia’s government warned of mounting hardship as Victoria state announced only a gradual easing of one of the world’s most stringent lockdowns, with key sectors of the economy under controls until at least the end of October.

Retail, hospitality, tourism and entertainment will be restricted state-wide and the 5 million residents of Melbourne will face stay-at-home orders until Oct. 26, or until there are fewer than 5 new Covid-19 cases a day. Office staff will be told to work from home until at least Nov. 23, under the roadmap announced by state Premier Daniel Andrews.

“If we open up too fast then we have a very high likelihood that we’re not really opening up at all, we’re just beginning a third wave,” Andrews told reporters Sunday. “We have to take steady and safe steps out of lockdown.”

Victoria is at the epicenter of a renewed outbreak in Australia that’s hurting Prime Minister Scott Morrison’s attempts to drag the economy out of its first recession in almost 30 years. While Germany and France are staunchly opposed to fresh lockdowns even as cases surge, Victoria has opted for even tighter controls second-time around, imposing a night-time curfew on the state capital.

While the measures are working, cutting the daily tally of new cases from a peak of 687 in early August to just 41 reported Monday, they are taking a heavy economic toll. The second-most populous state contributes about one-quarter of Australia’s gross domestic product, but is isolated from the rest of the country after other states closed their borders against a spike in community transmission.

Morrison, who is pushing for states to lift border restrictions to help kick-start an economic revival, said the move to extend lockdown measures was “hard and crushing news,” for the people of Victoria that would have a further economic cost.

He stressed the need for strong contact tracing, noting that Victoria lagged the capabilities of neighboring New South Wales, which was managing to control clusters and keep its economy largely open.

The Business Council of Australia called on Andrews to move quicker to re-open businesses and get the state economy moving again. The Australian Industry Group called the roadmap “a document of despair for industry and their employees.”

“There will be catastrophic economic, health and social damage caused by the continued lockdown and prospect of more months of sharply diminished activity,” Chief Executive Officer Innes Willox said.

Across the state, people have been ordered to stay at home except for essential work, medical care, provisions, or exercise since early August. Melbourne has been under even tighter restrictions, with a nighttime curfew and large parts of its retail and manufacturing sectors shuttered.

The first changes, which take effect from Sept. 14, include a lengthening of permitted outdoor exercise time to two hours, and an allowance for two people or a household to meet outside.

A further easing of restrictions, including a phased re-opening of schools and childcare centers, is planned for Sept. 28. Opening up beyond that will depend on the state meeting targets for reducing the rate of new infections.

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