Saturday, 18 July 2020

As debate rages over coronavirus supplements, almost 2.5 million people could find themselves in poverty.

Extract from ABC News

Analysis

, People queue on a sidewalk while physically distancing
Thousands of Australians have been having the unpleasant experience of suddenly becoming invisible in the last few months.(AAP: Stefan Postles)
Thousands of Australians have had the unpleasant experience of suddenly becoming invisible in the past few months: losing jobs they felt defined them, and incomes that allowed them to live.
If the recession of the early 1990s cut a swathe through areas like manufacturing jobs, consider the sorts of jobs that might never return from the current economic slump.
The outlook for A380 pilots, for example, is not very promising.
Unemployment is no longer just a problem that affects those with fewer skills.

Reinforcing their invisibility

The stories of thousands of shocked people who never thought they'd be unemployed tend to get drowned out by the incomprehensible numbers of people who have lost their jobs in the past couple of months.
And the way we discuss the impacts of COVID-19 on the economy must only reinforce their sense of invisibility.
Josh Frydenberg and Scott Morrison speak to reporters in a courtyard
The Government will spell out next week the future of income support measures currently due to end in September.(ABC News: Nick Haggarty)
Much of the focus, for example, is on what the Government's next moves will be — on the impact of lost subsidies on business and the broader economy.
Next week the Government will spell out the future of income support measures currently due to end in September.
But it feels like the debate has overwhelmingly been about JobKeeper — the wage subsidy paid to employers to help them keep staff on board.
The discussion about what happens to people who are already unemployed is limited to questions of whether the $550 coronavirus supplement, paid on top of the dole (now called JobSeeker), is cut back in September or not.

It's a complicated story

The idea that we may be seeing an historic shift in the number of people living in poverty in Australia doesn't really register.
Nor has there been quite as much discussion about the impact on the economy of ending the $663 million stimulus to spending that the coronavirus supplement represents.
Keep in mind the supplement doesn't just go to people receiving unemployment benefits. It goes to those on parenting payments and eight other income support payments, including Youth Allowance and Farm Household Allowance.
There are already overtones of "dole bludger" in much of what the Government says about cutting back the supplement.
Prime Minister Scott Morrison has repeatedly argued there is "anecdotal evidence from small businesses, even large businesses" that "some are finding it hard to get people to come and take the shifts because they're on these higher levels of payment".
This is unfortunate because the available data shows lots of complicated things are going on in the workforce — and people's lives — which in turn make for a much more complicated story than one of jobs having slumped in March and starting to come back now.
They suggest the labour force remains a slow-motion train wreck, even before we find out what happens to JobKeeper. People who had previously only lost hours of work, for example, are still losing jobs in the past couple of months.People are seen wearing face masks in a long queue outside the Centrelink office at Southport on Queensland's Gold Coast.
The data we have got to date shows a lot of really complicated things going on in the workforce.(AAP: Dan Peled)

Unemployment benefits have doubled since December

Labour force figures released by the Australian Bureau of Statistics this week show the unemployment rate increased in June, to 7.4 per cent.
But that came after an additional 210,800 people got jobs, and the number of hours worked in Australia also increased.
So there are lots of contradictory trends to understand.
University of Melbourne economist Jeff Borland says the increase in hours worked undid about a third of the decrease from March to May, presumably a reflection of businesses opening up again.
But the rate of employment growth has fallen, and a growing number of people are finding themselves unemployed. About 450,000 people who were previously registered as employed but working zero hours (the JobKeeper effect) are now listed as unemployed.
In late June there were 3.5 million people on JobKeeper, according to evidence given to the Senate committee tracking the Government's response to the coronavirus.
But there are also now 2.243 million people getting the coronavirus supplement to their income payments, including about 1.75 million who are on JobSeeker. (The numbers on unemployment benefits, by the way, have doubled since December.)
To look at it another way, the number of people needing these payments in Victoria and NSW alone now exceeds those in the whole of Australia who needed it in December.

The job outlook is bleak

The 2.243 million number also includes about a quarter of a million single parents with children under eight.
Anti-Poverty Week director Toni Wren says that before the bushfires and COVID-19, two in five parents who relied on income support also worked part-time.
"Many of these, especially sole parents, will have lost their jobs involuntarily or given up part-time work due to the need to protect themselves or their children for exposure to the virus," she said.
In families with young or dependent children, Wren says, the employment impact of the economic slump has been greater on women than men.
Single parent females with dependent children had the largest fall — an 8 per cent drop in employment compared with 5.2 per cent for male sole parents with young or dependent children.
And she says the Monash COVID-19 Work and Health Study (which is surveying people who have lost jobs due to the COVID-19 shutdown) notes that more than 28 per cent of those who lost their jobs reported they were not eligible for any Centrelink benefits at all.
For those who were already on Newstart before the crisis began, the job market outlook must be even bleaker.
A woman and child wearing warm colourful jackets an stand on an Autumnal path.
In every family type that includes children (young or dependent), the employment impact of the economic slump on women has been greater than men.(Unsplash:Krzysztof Kowalik)
Data from the Department of Social Services released in April showed that two in five of those who had been on Newstart for at least a year in December — before the bushfires and coronavirus — had some form of disability and therefore only a partial capacity to work.
Nearly 200,000 were aged over 55. Just under 20 per cent of this group were helping support themselves through earnings from work.

Living in poverty

The Government may well find a path for slowly withdrawing JobKeeper assistance from firms that no longer need it, and concentrating the wage subsidy support on sectors that do.
It has also suggested it won't immediately just cut the dole in half overnight by cutting the coronavirus supplement.
A line stretches back as far as the eye can see outside Centrelink.
The Government has suggested it won't immediately just cut the dole in half overnight by cutting the coronavirus supplement.(ABC News: Chris Taylor)
But there should be more pressure on the Government to explain what it thinks is an adequate level of support for almost 2.5 million people receiving the supplement, who may well need it for a lot longer.
If it goes, all those people will find themselves living in what is officially classed as poverty, including more than a million children.
That kind of number should not be invisible.

Laura Tingle is 7.30's chief political correspondent.

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