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East Gippsland to feel the most economic pain

Gary Blackwood

The State Government in Victoria has been slammed following a report that indicates East Gippsland – because of the bushfires and Covid-19 – will be the hardest hit region economically in the coronavirus fallout. The State Opposition says the report highlights the need to retain the native timber industry in East Gippsland. Source: Timberbiz

The State Government plans to gradually shut the industry down by 2030.

“It is impossible to justify shutting down an industry that is sustainable, using a resource that is renewable, stores carbon and provides irreplaceable jobs,” the State Opposition’s Shadow Assistant Forestry Minister Gary Blackwood said.

“The timber industry and tourism are the two largest private employers in East Gippsland,’’ Mr Blackwood said.

The report, undertaken by SGS Economics and Planning, says East Gippsland will see a decline in annual GDP of over 22 per cent – three times the national decline – as a result of the summers bushfires and the impact of Covid-19.

This equates to a $450 million annual slump – or a quarter of the region’s economy.

Mr Blackwood said the report has also highlighted the State Government’s disregard for country communities.

He said the Government’s talk of providing genuine support for the recovery effort post the East Gippsland bushfires, support that gets homes reconstructed, farmers back into production and communities back to normal, was not playing out on the ground.

“The disingenuous promises to bushfire impacted families is the same approach the Premier has taken to hard working timber families—they are expendable as long as Labor’s city vote gets a lift,’’ Mr Blackwood said.

The purpose of the study was to understand the impact the COVID-19 social restrictions and the summer bushfires have had on local economies and the path recovery may take.

It analysed economic output across 109 sectors by municipality nationwide.

The report says that the COVID-19 pandemic represents the most significant challenge to Australia’s economy since the Second World War.

“The social distancing restrictions that have shut down large parts of the Australian economy are unprecedented,” the report says.

“The economic uncertainty surrounding the COVID-19 shutdown compounded by summer bushfires that wreaked destruction across many local communities, means that Australia’s Gross Domestic Product (GDP) will contract significantly in 2019-20 – the biggest contraction since the Great Depression.”

The study observed that Kangaroo Island – also severely impacted this financial year by the bushfires and the COVID-19 pandemic – will likely see a 17 per cent decline this financial year.

The study indicates it could be three to four years before these economies recover to the 2018-19 level.

SGS principal Terry Rawnsley said the economic effect in eastern Victoria was worse than the Great Depression.

“East Gippsland and southern New South Wales have had a terrible double-whammy of bushfires and then COVID-19 cutting off any quick recovery,’’ he said.

“Economic forecasting is difficult at the best of times. It is even harder at times like this when we are experiencing a once in a lifetime event. So rather than focus on one set of numbers, it’s best to think about scenarios of what might happen.”

Country areas that do not depend as much on tourism and have a healthy agricultural sector, such as western Victoria, would be least affected by the pandemic.

“Once again hypocrisy, smoke and mirrors and just plain misinformation is at play when you consider the economic impacts of the fires and Coronavirus in East Gippsland and yet the Labor Government still persists in forcing even more hardship on the people of East Gippsland by shutting down the timber industry,” Mr Blackwood said.