1 April 2021
Article by Ursula Stephens, as published in Eureka Street
At the beginning of the Covid-19 pandemic, the government reassured Australia ‘We’re all in this together’ but the truth is that the end of JobKeeper and the Coronavirus supplement payments will leave more than 2.6 million people in poverty.
The end of the $90 billion JobKeeper payment is being met with trepidation by many hundreds of thousands of Australians. While industry groups, unions and social service advocates continue to urge the federal government to provide extra support to struggling sectors to replace the wage subsidy scheme and offset major job losses, Treasury’s latest estimates are that up to 150,000 jobs may be lost. Other economists predict this to be closer to 200,000 jobs.
These job losses are expected to have a disproportionate impact on already disadvantaged areas, with a recent analysis by SGS Economics and Planning highlighting that disadvantaged communities bore the brunt of the effects of the pandemic and the pandemic response.
JobKeeper, paid directly to employers, has helped keep the Australian economy afloat as whole industries were forced to close to stop the spread of coronavirus. Australia’s scheme aimed to keep a connection between workers and employers, allowing a faster recovery when the health crisis was under control. In mid 2020, 3.6 million Australians were on Jobkeeper, of a workforce of around 13 million people.
Australian jobs lost during the pandemic were largely in customer service, creative arts, hospitality or tourism-related jobs where people do not have the ability to work from home. Many small businesses in food and beverage, transport, personal services, accommodation and recreation services that have depended on JobKeeper are predicted to increase in defaults and closures.
The ‘safe harbour’ provisions for insolvency have now ceased and it is expected that many marginal businesses will close for good. Many workers who were on the $1000 per fortnight JobKeeper and lose their jobs, will shift to JobSeeker, which has been reduced to $620.80 per fortnight.
Catholic social service agencies across the country are already seeing an increase in stress and domestic violence referrals. Requests for material support, food relief, financial counselling, and emergency assistance are on the rise as housing affordability, precarious housing and homelessness increase.
Of great concern to our services is the pressure on rental affordability, when the fortnightly $150 Coronavirus Supplement disappears and is replaced by the $50 JobSeeker increase. This change will mean that more than 2.6 million people receiving income support will be below the poverty line.
The chart below, prepared by Simone Casey, Research Associate, Future Social Service Institute, RMIT University, highlights the extent of the issue.
Chart: Households and people on income support falling under the poverty line as COVID supplement reduces (based on DSS data February 2021)
In our paper Strong Economy, Stronger Australia: Building our Prosperity to Serve the Common Good, CSSA advocated for several initiatives to help boost economic activity and social equity. Among other measures, we call for a significant investment in the Care Sector to deliver an appropriately trained and renumerated workforce. Such an investment would improve workforce retention and quality of service, which will not only support the recommendations coming out of the Royal Commission into Aged Care but create ongoing and rewarding work for thousands of Australians.
CSSA also recommends initiatives that address the social inequality highlighted throughout the Covid-19 crisis. Initiatives that include establishing an expert panel review of the welfare system to make recommendations about the adequacy of payments; reform of Australia’s job programs to improve outcomes; and setting a target of a ‘Full Employment Economy’, where everyone has access to a job with sufficient hours and enough pay to enable them to live with dignity.
Our research with ANU Centre for Social Research Methods Mapping the Potential identifies clearly the localities and electorates that would benefit most from such initiatives.
Poverty and disadvantage will continue to be entrenched in Australia’s poorest suburbs unless governments and communities can work together to re-imagine a fairer future for Australia as it emerges from the Covid-19 pandemic. It is in our national interests to do so.
Article source: Eureka Street, 1 April 2021
Ursula Stephens is the CEO of Catholic Social Services Australia.