Around 1.5 million Australian private sector workers to receive wage subsidy in virus-hit state

Nearly half the workers at private firms in Australia's Victoria state, around 1.5 million people, will receive a federal wage subsidy as a surge of coronavirus cases forces a near total lockdown in the state, Treasurer Josh Frydenberg said on Friday.

The figure illustrates the economic pain of a six-week lockdown of Melbourne, the capital of Victoria and the country's second largest city, which will see shops and businesses shuttered and five million inhabitants required to stay home.

With Australia making it easier to qualify for wage subsidies, Frydenberg said half of the private sector labour force in Victoria will receive a two-weekly payment of A$1,500 ($1,085), a programme known as JobKeeper.

Australia's wage subsidy scheme, which is scheduled to run until March 2021 and cost more than A$32.4 billion, is among measures seeking to prop up the economy, which is entering its first recession in nearly three decades.

"It's heartbreaking, it's very challenging but unless we drive down movement, the number of people moving around Victoria, we don't drive down the number of coronavirus cases, and then we will remain in these terrible conditions," Victoria state Premier Daniel Andrews told reporters in Melbourne.

On Thursday, Prime Minister Scott Morrison said unemployment was forecast to peak at 10%, with effective unemployment closer to 14% when counting workers in the wage subsidy scheme.

But authorities say the lockdown of Melbourne is the only way to contain the second wave outbreak of Covid-19 which has infected thousands in recent weeks.

Victoria, the country's second most populous state, reported on Friday 450 new Covid-19 cases and 11 deaths in the previous 24 hours. Victoria has nearly 8,000 active Covid-19 cases.

"Having seen stabilisation in numbers, that's a positive. We do expect, within 14 days of a really significant intervention, that we'll see a change in numbers," Victoria state's Chief Medical Officer Brett Sutton told reporters in Melbourne.

Australia has reported just over 20,000 cases of the virus, of which Victoria has reported 13,400. Nationwide, deaths total 266, still far fewer than many other developed nations.

But authorities worry that the outbreak in Victoria could spur a nationwide second wave despite stringent restrictions on cross border travel.

Australia's most populous state New South Wales (NSW), the second worst hit by coronavirus, said on Friday it had found 11 new cases in the last 24 hours, with particular concern around a case in Newcastle, the state's second largest city. NSW has just over 800 active infections.

A third person from a family in Newcastle has been diagnosed with Covid-19, and authorities said they are still unsure how they cluster contracted the virus.

Authorities also warned patrons from five pubs in the area to self-isolate after the man in his 20s visited a string of venues while potentially infectious.

While Queensland state, which did not report any new cases on Friday, will close its border with NSW on Saturday, after already banning residents from Victoria.