Victoria’s second wave has cut jobs in the state and risks prolonging the recession for another quarter.

“A lot of companies won’t make it through the next six months,” Ms Bartlett said, “I am quite pessimistic.”
Mr Chaney added: “I don’t recall any time when we have faced with such uncertainty. It is extremely concerning.”
Michael Chaney: “I don’t recall any time when we have faced with such uncertainty.” Trevor Collens
The hit to the recovery comes despite Commonwealth Bank data showing its bank accounts were now bulging with higher incomes from government benefits in July. The bank’s credit card data shows spending held steady in both Victoria and across the country in the week to July 24.
Prime Minister Scott Morrison said the hit to jobs was not only critical to the economic recovery plan but also public order and safety.
“Governments are looking to keep people safe. Governments are working to try and keep people in jobs, to ensure that people do not get into hardship,” he said on Tuesday before flying back to deal with an emergency in aged care.
“We’ve been able to ensure that hundreds of thousands, if not more than that, have been supported through this COVID recession, and will continue to be, so that economic hardship doesn’t wreak even worse outcomes on Australians.”
In the month of July alone, the Morrison government’s JobKeeper scheme has injected $10 billion into bank accounts, while its $750 cash payments to households have pumped in another $3.5 billion into bank accounts.
Another 4.3 million low- and middle-income workers around the country have also started receiving a full $1080 tax rebate after a record number of tax returns were lodged in the first week of July.
But with another 380 virus COVID-19 cases in Victoria on Tuesday, economists expect the chances of an easing in restrictions after the original six-week time frame have been blown and that could send the September quarter economic growth number into negative territory.
“We had the September quarter at 0.2 per cent with a six-week lockdown in Victoria,” CBA chief economist Stephen Halmarick said, “but that is going to go pretty close to negative.”
“Our forecast for annual growth this calendar year was revised from -3.2 to -3.8 with a six-week lockdown. But we will now require another look at that GDP forecast,” Mr Halmarick said.
While not expecting the September quarter to go negative yet, JPMorgan economists downgraded their September quarter growth forecasts on Tuesday from a 3.7 per cent rebound to 2.5 per cent.
“Obviously the path of restrictions from here will be important in gauging whether this revision is enough,” JPMorgan economist Ben Jarman said, “And such judgments are becoming more complicated.”
The March quarter saw a contraction of 0.3 per cent. Treasury estimates that GDP will fall sharply in the June quarter by 7 per cent but that the September quarter could stay positive.
“The easing of health restrictions in line with the health advice is expected to deliver an increase in economic activity from the September quarter and beyond,” Treasurer Josh Frydenberg said last week.
Since February of this year, the economic impact of COVID-19, has cost the economy 3.5 years worth of accumulated GDP growth and about three years of employment growth.
Figures released on Tuesday show that Victoria has now lost more jobs, and is losing them faster than any other state in the country as the COVID-19 lockdown forces businesses to cut staff.
Since March 14, when Australia recorded its 100th confirmed COVID-19 case, Victoria has lost 7.3 per cent of all jobs in the state or roughly 252,000.
The hit from Victoria as seen in the latest payroll figures from the Australian Taxation Office and the Australian Bureau of Statistics prompted analysts at UBS to estimate that another 60,000 jobs would be lost in the official unemployment figures for July. RBC Capital Markets expect about 50,000 jobs to be lost.
“The payrolls index was already losing momentum for much of June and, indeed went backwards in the last week of June for the first time since April,” RBC Capital’s Su-Lin Ong said.
But the UBS analysts urged caution on the numbers.
“We are cautious not to over-interpret this latest data as a change in the trend (a turning point downwards) because of very large upward revisions to history,” UBS’s George Tharenou and Carlos Cacho said.
The wages bill in Victoria has also been cut by 3 per cent in the week to July 11.
NSW has lost 219,000 jobs since March 14 and the rate of job losses in that state has ticked up again to 0.7 per cent in the week to July 11.