The latest official economic updates, published in July, tipped unemployment to top 9 per cent, or 315,000 people out of work, by the end of September and for the state’s economy to shrink by 5.3 per cent or $21 billion.

But RMIT economist David Hayward said those Treasury predictions were now “out the window” in the wake of Sunday’s announcement, with the economic hit now likely to be more than 6 per cent and unemployment to be ‘north of 10 per cent’ with about 350,000 Victorians having joined the dole queue since the pandemic began.

“It’s a really unfortunate confluence of factors that are going to undermine Victoria’s latest [economic] projections and make coming up with a new budget very difficult indeed,” Mr Hayward said.

The economist warned the decisions announced on Sunday would cause Victoria to fall further behind the other states and territories in the process of economic recovery from the endemic.

Victoria’s business sector fears the state’s jobless rate will top 10 per centCredit:Virginia Star

The Victorian Chamber of Commerce was angry on Sunday, saying Mr Andrews’ plans to open the economy was a “road to nowhere” and retail and tourism industry spokespeople also expressed disappointment with many complaining that they had been ignored by the government.

With pubs and restaurants in Melbourne unlikely to open until late October, and only with strict limits, the Australian Hotels Association said many businesses in the sector which employs 52,000 Victorians were “bleeding with debt” and demanding to re-open sooner.

The key construction industry welcomed the decision to move large building sites from the “heavily restricted category” and allow large jobs to operate with 85 per cent of their workers from September 28, with restrictions also to be eased on the house-building sector.

Victorian Chamber of Commerce chief executive Paul Guerra said the Premier’s plan was “not good enough” and that the chamber’s submissions to the government had been “ignored”.

“Today we have been delivered a road to nowhere,” Mr Guerra said. “We can’t continue to let business and jobs be decimated on the way to controlling the spread of the virus. This has to end. Whilst there is a glimmer of light for regional Victoria and some industries, nothing changes for two months and that’s not good enough.”

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Prime Minister Scott Morrison and Treasurer Josh Frydenberg said in a joint statement on Sunday that the Victorian government’s decisions would come at a further economic cost.

“While this needs to be weighed up against mitigating the risk of further community outbreak, it is also true that the continued restrictions will have further impact on the Victorian and national economy, in further job losses and loss of livelihoods, as well as impacting on mental health,” the statement read.

In a joint statement, the Master Builders Association and the building union the CFMEU broadly welcomed Mr Andrews’ plan, while expressing concern that some sub-sectors, like renovations subcontractors, remained unable to return to work.

“We are very pleased to see an increase to 85 per cent of workers allowed on-site for large scale construction,” Master Builders’s Chief Executive Rebecca Casson said.

“For other parts of our sector, and renovations especially, this news will be extremely tough.”

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Noel Towell is State Political Editor for The Age

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