Kimmi Moscicki told 3AW she had been just across from the Royal Hotel in the Victorian town when a white BMW ploughed into a streetlight and through a beer garden.
She said the victims had been “airborne”.
“I’m in shock about how far they travelled,” she said.
“They would have not even known it was coming, I think. They had no time at all to get out of the way.”
She praised the actions of bystanders, who leaped to the aid of the wounded.
“Everybody should be so proud of themselves – locals and visitors all alike, everybody just jumped in,” Moscicki said.
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Five people, including two children, have died from the crash so far. Five others remain in hospital.
The driver, a 66-year-old Mount Macedon man, is also in hospital and yet to be interviewed by police.
Asked how she processed a tragedy like this, Moscicki said she considered herself one of the “lucky ones” in an emotional response.
“I suppose I’m the lucky one that gets to go home to my family and they’re not, that’s how I process it,” she said.
“I feel really, really sad for the people and their families and friends.
“Don’t take life for granted because you never know what can happen.”