Stranded workers and businesses are struggling to cope with lower levels of aid than programs that saved the economy in 2020.
- $ 5.1 billion in ‘pandemic response’ payments have been made since June
- 70% went to NSW, where 960,000 people received at least one payment
- Many support programs from 2020 have ended, although the country’s most populous states are in extended lockdowns with no release date
With half of the country’s population locked in, Angela Jackson, chief economist at Equity Economics, estimates that the value of goods and services produced nationwide – its gross domestic product or GDP – will drop 4% over the course of the year. current quarter.
“So we are talking about households and businesses that experience huge drops in income.”
Since June, the federal government has distributed nearly $ 5.2 billion in disaster support payments. But businesses and economists fear that the relatively weak support could jeopardize Australia’s economic recovery.
“It’s very difficult, difficult for everyone. But the lack of government support is, from a business point of view, very difficult financially,” lamented Michael Savage of Enchanted Adventure Garden at Arthurs Seat, just in outside of Melbourne.
Normally, Mr. Savage would be busy preparing hundreds of employees to meet the needs of up to 3,000 clients a day during the school holidays this month.
Instead, he watched a core of 10 employees build a new attraction and hope for a better summer time.
“There is very little business support,” Mr. Savage said.
“I have access to a few grants that we received from a state government (in Victoria), but nothing came from the federal government this year. No JobKeeper. No grants from the [federal] government.”
“Big and daring” support
Dr Jackson said surprisingly different approaches have been taken in dealing with the pandemic in 2020 and this year.
“The initial response was big and bold. This year, what we’ve seen is a much more conservative response,” she observed.
“The overall level of support is much, much less. It is an order of magnitude less economic support for businesses and households through these latest closures in Victoria and New South Wales.”
In addition to financial aids such as wage subsidies for apprentices and loan guarantees, initiatives in 2020 included a ban on rental evictions, forced negotiation of rents for commercial leases, suspension of mortgages for owner-occupiers and landlords. donors (mainly stopping reimbursements). Many of these programs have also ended, although some have resumed, such as mortgage deferrals.
“The [federal government] spent over $ 300 billion last year in the economy, ”Ms. Jackson said, noting that some of these stimulus packages are still being rolled out.
“To date, with disaster payments, for comparison, we’ve only seen $ 5.2 billion spent.”
Over the past year, direct support has come in two main ways.
The JobKeeper wage subsidy, paid to workers through their employers, cost $ 90 billion.
People receiving social assistance benefits, like the renamed JobSeeker unemployment benefit, also received a generous coronavirus supplement which in many cases doubled the amount they received. It cost over $ 20 billion.
These programs ended earlier this year. But after the closures in Victoria and then in New South Wales, the federal government switched to a system used after natural disasters, allowing it to quickly distribute money to people forced to stay in their homes.
More than 1.9 million people have received one of three different types of pandemic response payments.
The amounts are unequal between states and territories, because of their population and the duration and extent of the blockages there.
These figures from Services Australia show what had been distributed since June, until midnight Wednesday.
- NSW: $ 3.6 billion, with 981,000 people receiving at least one payment.
- VIC: $ 1 billion, with 443,000 people receiving at least one payment.
- QLD: $ 251.1 million, with 194,000 people receiving at least one payment.
- ACT: $ 67.9 million, 52,000 people receiving at least one payment.
- SA: $ 48.2 million, with 86,000 people receiving at least one payment.
- NT: $ 2.6 million, with 4,097 people receiving at least one payment.
Residents of Western Australia and Tasmania were not eligible for the grants.
The COVID disaster payout is by far the key payout, with $ 5.03 billion paid out to 1.7 million people.
At $ 750 per week for people who lost more than 20 hours of work, it’s as generous as the original JobKeeper payments (which have been slashed over time).
But the payments exclude many of those who have lost their jobs, including anyone on Pension, JobSeeker, Austudy, Carers Payment, Parenting Payment, Youth Allowance, and other welfare payments.
“Unfortunately, that means we have a two-tier support system,” said Charmaine Crowe, senior advisor at the Australian Council for Social Services (ACOSS).
The result means that many people – with low levels of social benefits – saw their jobs terminated by government decree, but were unable to access additional help to make up for their lost wages.
Mr Savage said one of his staff, Charlie Panteli, a part-time tree surfing instructor, currently dismissed from his post, who is studying to become an elementary school teacher, was a prime example.
“He can’t access it. But I have 17-year-olds who are still in high school and they are getting $ 375 a week in child support because their regular shifts have been canceled,” he said. .
“Sometimes the money doesn’t go to those who need it. It seems very uneven.”
“There is no kind of comfort”
Over the past month, Mr. Panteli received assistance from the federal government to complete his Austudy payments.
An income support payment of $ 200 – $ 85 million to 140,000 people – was introduced last month for people on social assistance benefits listed above who lost more than eight hours of work.
“It’s just the level of not knowing, there is no kind of comfort,” he said.
In 2020, Mr Panteli received the coronavirus supplement, something he described as life changing.
“Oh, it made a huge difference. You don’t worry about the money,” he said.
“When everything was just cut [back], I was getting $ 240 per week. It just didn’t cut him off. “
Mr Panteli hopes the attraction can open for the summer vacation and he can resume his work in the trees, sending people down the ziplines to the ground.
“It’s pretty hectic. There are people everywhere, there are always people arriving late and it’s stressful,” he said.
“I really like it. It’s a great place to work while you study.”
Poverty has ended, has taken over
In 2020, the coronavirus supplement fulfilled a two-decade-long dream of welfare advocates, taking minimum levels of support for Australians above the so-called poverty line, a figure generally accepted as the half of the median household income of the population.
“What the government did last year is amazing. They literally broke poverty overnight,” said ACOSS’s Ms. Crowe.
Poverty among those receiving the JobSeeker unemployment benefit – formerly known as Newstart or colloquially, “the allowance” – has fallen from 88 percent to 25 percent.
“When the government removed these supports, poverty rose to 85 percent for that same cohort of people,” Crowe said.
Payments for job seekers were increased by $ 25 a week earlier this year, the first time a government has raised the rate in real terms in more than 20 years. But the simultaneous removal of the coronavirus supplement meant the recipients were much worse.
Mr Savage was puzzled at the government’s response to a situation very similar to last year, where it deployed immense fiscal firepower to keep the economy moving.
“I don’t know why they can’t broadcast it and support the people,” he asked.
“We are the ones paying the tax and supporting everything. It’s time to give a little more back and help those who are really struggling.”