Hospitality industry reacts to $534 million economic lifeline
Victoria’s Treasurer has conceded early optimism over the impact the coronavirus pandemic would have on the state economy is now gone, and says it will take years to recover from the economic hit.
Treasurer Tim Pallas this morning revealed the grim outlook as he announced another $534 million financial support package for the businesses hit hardest by the COVID-19 shutdown.
He said the “worst case scenario” modelling by Treasury looks likely to become a reality.
“I think we’re looking at the realisation of our projections,” Mr Pallas said.
The Treasurer expects unemployment in Victoria, which is currently at 6.9 per cent, will peak at 11 per cent.
The economy is expected to shrink by 14 per cent in the June quarter.
“That is a profound reduction and it will take some years before we see that level of economic activity come back,” Mr Pallas said.
Chief executive of the Australian Hotels Association Victoria, Paddy O’Sullivan, said the package will help hospitality businesses stay afloat, but it may not be enough.
“It will help… for now,” he told Heidi Murphy, filling in for Tom Elliott.
“It is a step in the right direction.
“Pubs and hotels were the first to shutdown and the last to reopen.
“Even under the reopening plan that we did have there for a bit over a month, the restrictions were very tight, which made it pretty much unviable.”
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What is included in the $534 million package:
- $5000 support grants for more than 80,000 eligible businesses within the lockdown area
- $30 million fund for hardest hit hospitality businesses and the nighttime economy
- $36 million for mental health support for business owners
- $20 million fund for CBD businesses hit by loss of foot traffic
- $40 million fund for regional tourism businesses