Pedestrians wearing face masks outside Flinders Street Station, Melbourne, Australia, as the city operates under lockdown restrictions to curb the spread of the coronavirus disease on August 3 2020. Picture: AAP IMAGE/JAMES ROSS VIA REUTERS
Pedestrians wearing face masks outside Flinders Street Station, Melbourne, Australia, as the city operates under lockdown restrictions to curb the spread of the coronavirus disease on August 3 2020. Picture: AAP IMAGE/JAMES ROSS VIA REUTERS

Sydney/Canberra — Australia’s Victoria state will shut down large parts of its retail and manufacturing sectors for six weeks across the city of Melbourne after a lockdown failed to contain a spike in coronavirus cases.

Premier Daniel Andrews on Monday also announced that construction firms must radically reduce the number of workers on site across the city, while production at meatworks statewide will be cut by a third. Essential services such as banks, supermarkets, pharmacies and petrol stations will remain open, he said.

“This will have a very significant impact” on the economy, Andrews said. “But until we fix the health problem, until we get these case numbers down to a much, much lower level, we simply cannot open the economy up again. So there is significant damage that needs to be done.”

The outbreak in Australia’s second-most populous state shows no signs of abating, three weeks after Melbourne’s five-million residents were ordered to stay home except for work, medical care, provisions or exercise. On Sunday, the government said the lockdown would be widened to cover the whole state, while Melbourne was placed under a six-week curfew between 8pm and 5am.

Andrews told reporters Monday the state recorded 429 new cases and 13 more deaths in the past 24 hours.

The tighter restrictions threaten to exacerbate Australia’s first recession in almost 30 years. Victoria contributes about one-quarter of GDP, but is now isolated from the rest of the country as other states shut their borders against the worrying spike in community transmission.

Australia’s treasurer, Josh Frydenberg, said earlier on Monday the economy faces another significant hit from the extended lockdown and restrictions on workplaces.

“This is a massive kick in the guts to Victorian businesses,” Frydenberg told Sky News. Treasury had previously estimated a six-week Melbourne lockdown would cost the economy A$3.3bn ($2.4bn) in the September quarter.

Consumer discretionary stocks extended losses following the announcement.

Addressing the media in Melbourne, Andrews said grocery and liquor stores, news agencies and post offices would also remain open and urged against panic buying. Retailers that have an on-line, click and collect facility could continue to operate, he said.

Large-scale public construction projects have already halved their workforce and commercial sites for buildings above three storeys must cap the number of employees at 25%. Only five people will be allowed at any one time on residential construction sites.

Andrews said further announcements would be made in the next few days as consultation with industry groups continues.

Schools across the state will move to remote learning from Wednesday, while childcare centres in Melbourne will close to all but essential workers from Thursday.

Separately, New South Wales — the nation’s most populous state — recorded another 13 cases Monday. Premier Gladys Berejiklian said she was “strongly encouraging” residents to wear masks in certain situations, such as supermarkets and places of worship.

“I want to stress it’s not compulsory, but it is a strong recommendation,” Berejiklian told reporters. “I can’t stress enough how critical the next few weeks are,” adding she was taking extra measures due to the state’s geographical proximity to Victoria.

Australia’s first lockdown that lasted roughly from March to May was one of the most successful in the world, bringing down cases to just a handful a day nationwide. But security failures at quarantine hotels for returning travellers and poor communication of critical information to migrant communities allowed the virus to roar back in Victoria.

With those unable to work from home not willing to sacrifice wages, and people losing patience with physical isolation, many no longer seem willing to fully follow the rules as the economic and social costs mount.

Bloomberg

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