The Commonwealth has also unleashed an extraordinary spending program in its response to the virus crisis, with the Morrison Coalition government pledging to spend $80 billion a year on average for the next four years.
Victoria’s huge coronavirus spending pledges, on top of the hundreds of millions of dollars spent on bushfire fighting and recovery this year, will obliterate the slender budget surplus the state government was predicting this financial year.
The Age reported on Monday that independent economic forecasters believe the coronavirus pandemic will shrink the Victorian economy by up to 10 per cent in 2020, the biggest contraction since the Depression and, before that, the first year of World War I.
But Mr Andrews said with the crisis still unfolding, it could be months before the hard economic data was available to assess the full impact of the initial weeks of the pandemic.
“It’s very difficult to put a number on it,” he said. “We’ll have to see the actual accounts, the actual numbers, rather than trying to forecast for the future.”
The Premier said it was “pointless” trying to frame a state budget in the volatile circumstances and the centrepiece of the state political calendar had been postponed until October, with Parliament to be recalled in the coming weeks to vote for a financial supply bill, allowing the government to spend the money it needs to function.
“Right now, that revenue is down so much, expenditure is up, a lot of things are moving around,” Mr Andrews said. “It’s a very volatile set of circumstances, so trying to put a budget together now would have been really very difficult and largely pointless.”
The government plans to pass an interim budget in the coming weeks that will be largely identical to last year’s, but with spending increases to cover the cost of the pandemic, with the major economic decisions put off until October.
Opposition Leader Michael O’Brien called for more specific answers on the unfolding economic crisis.
“The Premier does need to be upfront with Victorians,” Mr O’Brien said.
“Just how bad is this going to get, how many people are likely to lose jobs, just how much is our economy going to go backwards? We need to have the truth so we can work out the best way to strengthen our economy, protect those jobs and get families and businesses on track.”
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Noel Towell is State Political Editor for The Age
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