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Melbourne CBD faces $110bn hit over next 5 years

Melbourne’s Central Business District could have its economic output reduced by up to $110 billion over the next five years as a result of the restrictions put on the region due to the COVID-19 pandemic, new modelling shows.

The modelling from PricewaterhouseCoopers (PwC) commissioned by the City of Melbourne estimated the economic hit by comparing it with previous projections made before the pandemic.

It also showed that compared with pre-COVID-19 forecasts, the City of Melbourne economy will contract by up to $23.5 billion – or 22 per cent – in 2020.

PwC also estimated that, over five years, there could be up to 79,000 fewer jobs than pre-COVID forecasts as an annual average.

The modelling accounts for the stage 4 restrictions and assumes a slow economic recovery with prolonged public health measures in place in 2021. 

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Melbourne Lord Mayor Sally Capp said Melbourne was the economic powerhouse of Australia, and that the scale of the economic shock being felt across the central city is unprecedented.

“The modelling shows more than 22,000 jobs could be lost in our accommodation and food services sector this year alone. We can’t afford to lose our world-class food, café and retail culture,” she said.

The Lord Mayor also said Australia’s economic recovery is dependent on Melbourne’s recovery, given the city’s global reputation as a destination for investors, visitors and students. 

“This new data shows that Melbourne needs urgent support from the Victorian and Australian governments to support businesses and restore our marvellous Melbourne,” she said.

“We are working closely with the state and federal governments to secure further support for businesses and investment for the city’s reactivation when it is safe to do so.”

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The City of Melbourne has already invested $50 million in rate relief and stimulus packages to help its economy recover as quickly as possible, including a $10-million support package for small businesses following the initial outbreak in March.

[Related: Melbourne auctions come to standstill]

Melbourne CBD faces $110bn hit over next 5 years
Melbourne CBD faces $110bn hit over next 5 years
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