Could JobKeeper be extended in Melbourne?

The Morrison government will wait and see how Victoria responds to the economic fallout of an extended COVID-19 lockdown before considering whether it should step in to provide further income support for businesses.

Melbourne-based hospitality and retail businesses are facing several more months of strict coronavirus restrictions under a “steady and safe” reopening roadmap outlined by Victorian Premier Daniel Andrews on Sunday.

But Prime Minister Scott Morrison says the federal government won’t consider whether to extend income support measures for these businesses until Andrews delivers his own response.

“I’m seeking to see what the Victorian government will be doing in taking actions to mitigate the economic impact of the decisions the Victorian government has made regarding the restrictions, and the plan that they have set out,” Morrison told reporters on Monday.

“When it comes to specific economic support, income support or other forms of support, that they consider is appropriate … I’ll be looking to see what they’ll be doing first before the Commonwealth considers any responses that we’ll be making.”

While the Victorian government has paid out millions of dollars in emergency assistance grants to business owners throughout its stage four lockdown, officials have played down the prospect of further support, arguing the state could not afford to prop up the incomes of sole traders.

Meanwhile, the federal JobKeeper program — which Treasury has suggested will support more Victorians than any other state in the coming months — will be scaled back at the end of September, reducing fortnightly payments by hundreds of dollars a week.

The federal government has stressed that JobKeeper is a federal program, but the prospect of several additional months of forced business closures has given rise to calls for extra income support among businesses.

Rather than promise extra help for struggling SMEs, Morrison sought to underscore the need for effective contract tracing to allow states to open up their economies while dealing with localised coronavirus clusters, saying NSW was the “gold standard” for what effective infection management looks like.

“The most important thing is ensuring that we build an integrated tracing capability right across the country that enables a state to remain open despite the threat of outbreaks,” Morrison said.

“That is the difference between being open and closed, a capable, integrated tracing capability.”

Criticism of Victoria’s contact tracing system has blossomed among business groups in recent days, amid widespread anger about the conservative pace of the reopening roadmap, which will see the most stringent restrictions on retailers remain in place until at least late-October.

Andrews has resisted this criticism, releasing modelling over the weekend that found Victoria is at risk of a third wave if it reopens too fast.

“That’d mean we’re back to where we are now, maybe even worse. Days, weeks, months of sacrifice, gone. Confidence for business, destroyed. More families suffering, more lives lost,” Andrews said in a statement on Sunday.

This story first appeared on Smart Company, and has been republished with permission.