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Every time a snap lockdown happens, businesses like this have

It may be billed as just one week – but for casual workers and small business owners, the fourth Victorian lockdown that starts today is terrifying.

Key points:

  • Industry groups estimate Victoria will lose out on $1b in economic activity due to the seven-day lockdown
  • 500,000 people in Victoria are in casual jobs with little job security during a pandemic
  • Small business owners are furious that a snap lockdown was announced without a comprehensive support package for their industry

The entire state of Victoria has gone into a snap seven-day lockdown due to rising COVID cases, with non-essential businesses like hairdressing, entertainment and gyms forced to close.

Melbourne café worker Bella Drummond is one of the estimated 500,000 Victorians that are employed casually.

“I’m casual so if I don’t work, I don’t get paid,” Ms Drummond said.

“But that doesn’t mean my expenses stop.

“I’ve got rent, bills, internet, utilities, school fees, groceries, car payments, pet bills. You name it.”

She worked her last shift at a café in South Yarra yesterday before it closed for dine-in trade for the lockdown.

The 22-year-old full-time student has no savings in the bank and she doesn’t have a credit card.

“I’m a little worried, actually,” she said.

“It’s just the uncertainty. I don’t know when my next shift will be. I don’t know where my next pay cheque is coming from. I don’t know where I’ll pay my rent from.

“I’m a little concerned that this lockdown won’t be for one week. It’s hard for me to believe that seven days will be actually seven days and not 100 days like last time.

“I’m trying to figure out my contingency plan and what I’ll do next and how I’ll survive.

“I’m lucky I have a partner who works and family who will support me, but I know lots of others in the same situation and I have no idea what they’ll do.”

Bella’s boss is in a bind too 

Ms Drummond’s boss Melissa Glentis would like to pay her casual staff while they’re not working during lockdown.

But after 15 months of COVID-19, her business is in the red.

a woman in a cafe kitchen with fooda woman in a cafe kitchen with food Melissa Glentis believes she will lose $50,000 in revenue due to Melbourne’s one week lockdown.(

ABC News: Emilia Terzon

)

“One week of lockdown costs us roughly $50,000 over two sites and that’s because we’re losing our biggest trade times on weekends and our functions,” Ms Glentis said.

“Every time we go into lockdown, we lose stock that’s perishable and it’s unlikely we’ll be able to re-sell it.

“And then there’s the loss of income. Our weekend trade. Our lockdowns always happen at the busiest times with weekends and our after-hours functions.”

How much does a seven-day lockdown cost?

Early estimates from the lobby group Small Business Australia place the cost of this seven-day Victorian lockdown at $1 billion in lost economic activity, while the Grattan Institute puts it at slightly lower at $900 million.

The Commonwealth Bank’s chief economist Gareth Aird is estimating an even higher cost.

“We think that the direct cost of the seven-day lockdown in Victoria will be around $1.3 billion,” he said.

“Any lockdown is more costly to businesses and workers from here than it was before the end of JobKeeper.”

Of course, there is a cost to not locking down, too.

The Grattan Institute’s Danielle Wood said the cost of letting the virus run rampant is difficult to put a number on, but it would be far more costly in the long run.

Woman in red smiles at camera. Woman in red smiles at camera. Grattan Institute CEO Danielle Wood says the lockdown may cost the economy around $900 million, but that will be less than allowing the virus to spread.(

ABC News: Peter Healy

)

“Once the virus is spreading in the community, there is inevitably an economic hit,” she said.

“Even though a short lockdown is costly, it is likely to be less costly than the alternative which risks letting the virus run out of control.”

Cafe owner Ms Glentis believes this lockdown will be harder than previous ones because the debt crunch is getting more severe. 

“It’s going to be hard, I can’t deny that. There will be a lot of juggling and my team comes first,” Ms Glentis said.

“My team is mostly on full-time salaries. How do I pay them?

“We’re getting further into debt.”

Read more about the spread of COVID-19 in Australia:

This is the first lockdown that Victoria will go through without the federal government’s JobKeeper, which gave businesses battling downturn a wage-subsidy for permanent workers.

The Australian Council of Trade Unions is calling on the Commonwealth to urgently reinstate it during Victoria’s lockdown.

Rules that forced commercial real estate owners to negotiate on rents with businesses battling downturn have also expired.

“We’re back to full rent,” Ms Glentis said.

The major festival Rising was supposed to take place in Melbourne this weekend but it is now refunding tickets for the entire seven-day lockdown.

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“It’s a complex event with over 750 artists and 1,000 staff and 120 projects,” co-artistic director Hannah Fox said.

“It’s not just as simple as picking up and moving it.

“We always understood this was a possibility in this environment but like everybody you get into a certain level of feeling confident. So, it’s a blow. A huge blow.

“Hearing the news about a person being in ICU [with COVID-19] and thinking more broadly about people around the world puts it into perspective.”

Major events have been unable to get insurance for cancellations associated with COVID-19 during the pandemic.

Regional Victoria also in lockdown 

Margrite Charlotte is a receptionist at the 32-room Phillip Island Apartments in regional Victoria.

She has been fielding calls for cancelled visits.

“People are feeling sad about not being able to come up. Many are rebooking rather than just cancelling,” she said.

“It’s a shame, but my attitude is keep calm and carry on.”

Ms Charlotte also works casually and the seven-day lockdown means she will be dipping into her savings.

Euroa Butter Factory owner Richard Hayes looks at the camera. He is standing in front of the old brick factory.Euroa Butter Factory owner Richard Hayes looks at the camera. He is standing in front of the old brick factory. Euroa Butter Factory owner RIchard Hayes is optimistic the snap lockdown will work. (

Supplied 

)

The owner of the regional tourism destination Euroa Butter Factory is also hopeful the snap lockdown will work.

“It’s good to do it this way rather than deal with the repercussions of an extended lockdown,” Richard Hayes said.

“We are doing this [the lockdown] to protect everyone.”

The venue’s wedding season is over, but a conference booked this weekend has been cancelled.

The business was also due to launch a new restaurant this Friday, but had not stocked up the kitchen yet so thankfully won’t need to get rid of much produce.

Even so, he says his business will lose “thousands” because of the lockdown.

What is being offered for small business owners?

Acting Victorian Premier James Merlino said at the lockdown announcement on Thursday that full assistance for business would be announced in coming days.

A Victorian government spokesperson said: “The Victorian government has invested more than $6 billion in direct economic support to Victorian businesses and workers to help them to get through the pandemic and recover strongly, and we will continue to support them.”

After the last lockdown in February, the State announced a $143 million package designed to help businesses, including sole traders, that lost income as a result of the five-day upheaval.

That included $2,000 one-off payments for businesses and sole traders.

It is expected that a similar package will be revealed again.

However, Ms Glentis is furious that a lockdown was announced yesterday without having that sort of detail already prepared to ensure business confidence.

“The most frustrating part is that after 15 months there is still no contingency plans in place. It’s a constant afterthought,” Ms Glentis said.

“I’m just really frustrated. Furious actually. I can’t believe we’re here for the fourth time.”

“If there is constant uncertainty in the market, then how are we going to get out of that debt?”

Melbourne’s Lord Mayor, Sally Capp, told ABC News Breakfast that more support is needed for business.

“We do need confidence and certainty from the state government and federal government about assistance for those who need it,” she said.

“We have to really be worried about how people can keep bouncing back from these lockdowns.

“It is so difficult, it takes an enormous amount of effort and, of course, in this environment there is no JobKeeper, rental assistance programs have finished.”

The Federal Government has indicated that it will not reinstate JobKeeper, despite Victoria’s latest crisis.

a young woman in a cafea young woman in a cafe Bella Drummond is one of the 500,000 Victorians who are casually employed.(

ABC News: Emilia Terzon

)

The Victorian Government already has a range of support schemes in place for people doing it financially tough during COVID-19 lockdowns, including emergency food packages, support for international students, and a rolling business support package worth $3 billion.

In a statement, a Victorian Government said the state has so far provided $6 billion in support measures for workers and business “and it will continue to support them”.

Back in Melbourne, Ms Drummond is just hoping the lockdown will end within seven days.

If it goes on any longer, she will consider going to Centrelink to apply for JobSeeker.

“They need to think of doing a one-off payment [for casuals] if it’s going to be just a week,” she said.

“I’ll be sitting at home watching the news, just waiting and worrying.

“Not much else I can do.”

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