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Prime Minister Scott Morrison and Victorian Premier Daniel Andrews (Image: AAP/David Crosling)

The worst fear of policymakers during the initial outbreak of the pandemic, and the accompanying shutdown of the economy, was that we would end lockdown and begin reviving the economy, only for the re-emergence of COVID-19 to send us back into lockdown again.

That wouldn't merely extend the economic pain, it would guarantee large numbers of businesses that had barely made it through the first lockdown would close forever in the second. It would also start to bring greater pressure on the financial system as the strain of holding off on business loan and mortgage defaults began to tell on banks.

After much self-congratulation and a bout of Aussie exceptionalism, that's exactly the prospect that Victoria now faces. The small positive is that so far it is only Victoria. But that in turn creates a new problem, of how to manage a multi-speed recovery from a deep economic contraction.