Hundreds of thousands of people financially worse off in 2021 lockdowns

Hundreds of thousands of households are financially worse off during the current coronavirus lockdowns than they were last year amid plummeting consumer and business confidence.

More than 720,000 people in locked down areas across the country are welfare recipients and a new analysis of federal government data by the Australian Council of Social Service shows the majority are not eligible for extra support. There are almost 400,000 people in NSW who receive JobSeeker, parenting payments, youth allowance or Austudy.

Last year the federal government temporarily doubled JobSeeker as the country went into lockdown. Credit:Janie Barrett

A $200 disaster payment is available to welfare recipients who have lost a full day of work, or eight hours or more in a week, as part of a government measure to help households stay afloat during the pandemic. A full day of work may be only a few hours if this constitutes someone’s usual day. ACOSS estimated about 540,000 out of the cohort of welfare recipients worked fewer than eight hours a week pre-lockdown with the majority of this group not working any hours at all. During last year’s nationwide lockdowns all welfare recipients were given $275-a-week extra.

Canterbury-Bankstown has more than 32,400 people relying on government payments, followed by Blacktown with about 27,300. More than 20,000 people were relying on welfare in the NSW local government areas of Fairfield, the Central Coast, Liverpool and Cumberland as well as Victoria’s Casey, Brimbank, Hume and Wyndham. In Queensland’s Cairns and Yarrabah, 16,700 and 1200 people receive welfare payments respectively.

ACOSS chief executive Cassandra Goldie now wants the $200 assistance to be extended to all welfare recipients or for the government to permanently increase payments like JobSeeker and Youth Allowance.

“Last year, the government did the right thing doubling JobSeeker to ensure people had enough to cover the basics so they could stay safely at home and keep a roof over their head,” Dr Goldie said.

“This year, we’ve instead seen the government leave behind people with the very least. People who were trying to find paid work going into lockdown have been completely excluded from disaster support,” she said. “This is bad policy on social, economic and public health fronts.”

Social Services Minister Anne Ruston said last year’s coronavirus supplement was introduced when the entire country was facing a total shutdown almost overnight for an indeterminate length of time.

“We know our economy recovers quickly from lockdowns and people can get back to work as restrictions lift so the support through the COVID-19 Disaster Payment is better targeted to assist people while they have lost hours,” Senator Ruston said, adding additional crisis payments for those requiring to self-isolate or care for someone isolating are available worth the equivalent of a week of income support.

There have been 30,543 claims granted so far in NSW for the $200 income support payments and 88,758 crisis payment claims granted in the state.

“Throughout the height of the pandemic we provided $32 billion in emergency support payments and ... this year we have delivered the largest increase to unemployment payments since 1986,” she said.

The lockdowns have resulted in a 3.1 per cent fall in the ANZ-Roy Morgan weekly measure of consumer confidence over the past seven days. It is now at its lowest level since October last year when Victoria was emerging from its extended lockdown period.

ANZ’s head of Australian economics, David Plank, said confidence could fall further. “Sentiment is still above the level reached during Victoria’s long second lockdown, but it is now in pessimistic territory for the first time since early November last year,” he said.

“Our research suggests we can’t be sure the low in confidence in the current cycle has been reached until COVID-19 case numbers start to trend lower.”

The lockdown across Greater Sydney and in other parts of the country is hitting not only workers but the business community. NAB’s monthly business survey revealed a 14 point collapse in business trading conditions through July after a 9 point drop in June.

There were steep falls in general trading (down 20 points), profitability (19 points) while the labour market is likely to take a hit with employment plans down 8 points.

Confidence is also sliding the longer the lockdowns continue. Business sentiment tumbled by 19 points in July to now sit in deeply negative territory. It was the second-largest fall in confidence since the Global Financial Crisis while the drop in conditions was the third largest since 2008.

In NSW, businesses reported a 27 point fall in confidence. NAB chief economist Alan Oster said the Sydney lockdown was having a knock-on effect on other parts of the country.

But he said there should be a turnaround once the lockdowns come to an end.

“We know that once restrictions are removed that the economy has tended to rebound relatively quickly,” he said. “The hope is that the economy again rebounds strongly, and we see little pullback in the very positive investment and hiring intentions we have seen by business in recent months.”

Labor spokeswoman for families and social services Linda Burney said the government had “chopped and changed COVID-19 support” and left workers falling through the cracks as a result.

Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.

Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.

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