Victoria takes aim at ‘disgraceful’ lack of federal financial support during lockdown

Every Victorian business owner should be angry that the federal government rejected calls to provide additional financial support during the state’s fourth lockdown, the state’s acting premier says, as the cost to the economy was estimated to hit $700m.

The acting premier, James Merlino, announced a $250m package on Sunday that included grants of up to $3,500 for as many as 900,000 businesses and specific support for event organisers.

The relationship between the Victorian and federal government during the pandemic has often been fraught. But Merlino and the Victorian treasurer, Tim Pallas, were openly contemptuous of the Morrison government on Sunday.

Merlino said he was “beyond disappointed” the prime minister had not been convinced in their conversations to support the state, saying it was “disgraceful” Canberra had decided to “leave the field”.

Pallas said he and the federal treasurer, Josh Frydenberg, spent the past five days discussing whether the federal government would provide support similar to the jobkeeper wage subsidy which ended in March. Or could consider matching the Victorian funding dollar for dollar.

Pallas said he eventually asked Frydenberg to simply contribute something “piecemeal so we can pretend that you are doing something tangible when, in your intent and efforts, you are not”.

“This idea that we are working hand in glove when they have never put their hand in their pocket is nothing short of a disgrace,” the Victorian treasurer said.

“All I am saying, [to] the commonwealth, you did the right thing with jobkeeper and we supported and applauded you for it, but don’t turn your back on the Victorian people in their hour of need.”

The federal government had only agreed not to tax any payments made under the Victorian scheme, Pallas said.

He said Treasury modelling put the estimated cost of the seven-day lockdown to the state’s economy at $700m.

Some businesses could expect payments under the state government package by the end of the week, Pallas said, and within two weeks he hoped to see the majority of grants paid.

Speaking from New Zealand, Morrison said the Queensland and West Australian governments had not asked for federal funding when they had decided on similar snap lockdowns to deal with Covid outbreaks.

“We will continue to support Victoria to get Victoria open and to do everything we can to ensure that Victoria does not close itself again,” the prime minister said.

“That’s where I’m quite sure that people across Victoria want us to focus. We’ll continue to provide great support, as we always have, and ensure that we get Victoria open as soon as possible. That’s our sole focus.”

Frydenberg echoed Morrison’s point about what other states had expected but his response was more open-ended.

“The economic impact of the Victorian outbreak is not insignificant but the budget just over two weeks ago did anticipate further outbreaks would occur,” he said.

“Our budget measures were calibrated accordingly, with the budget providing an additional $41bn of Covid-related economic support. The Morrison government will continue to work with the Victorian government and closely monitor the situation.”

The federal health minister, Greg Hunt, said the government had provided $45b to Victoria during the pandemic – more support per capita than any other state or territory.

Hunt listed four payments that could assist Victorians, two of which were tax measures for businesses. The other measures – the Services Australia administered pandemic leave disaster payment and crisis payments for a national health emergency – are one-offs for people who contract Covid, care for someone, or are in quarantine or isolation.

The payments are $1,500 or, for those on an income support payment or living allowance, equal to a week’s pay at the maximum basic rate.

“Those are our ongoing supports [and] we think the Victorian response today is fair and appropriate and acknowledge and thank them for that,” Hunt said.

Earlier on Sunday, Dan Tehan, the trade minister, pointed to the same Services Australia payments when asked what support would be given to Victorian workers impacted by the week-long shutdown.

Challenged on the eligibility requirements, Tehan told the ABC people could “go to Centrelink” because they “might” be eligible for the emergency payments. “What I’m saying is if you’ve lost all your income, then you should go to Centrelink and see whether you’re eligible for a payment,” he said.

Tehan suggested the Morrison government’s stance on not providing additional support could change.

“Obviously we will continue to have discussions with the Victorian state government and we will continue to monitor the situation,” he said.

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