Wednesday, 1 April 2020

COVID-19: The public health emergency and the disproportionately disadvantaged

Changing welfare policy in response to COVID-19

Shae Garwood

Shae Garwood examines the newly introduced social policies and changes to Australia’s welfare system in response to the spread of COVID-19 and how they alter the way we view the social security safety net and the people who are – or indeed are not – caught by it, and suggests ways in which they could and should shape it post-crisis.

The unfolding public health crisis has led to the development and implementation of social policy at record speed. The Morrison Government has gone from years of ignoring calls from advocates to increase the rate of Newstart to implementing large-scale welfare reforms in a few days. The Coronavirus Supplement increases Newstart (now renamed JobSeeker Payment) by $550 per fortnight, essentially double the current rate. As shown in this graph , after years of lagging behind, the new JobSeeker rate is 75% of the minimum wage.

Growth in Waves vs Benefits

The Coronavirus Supplement has only been put in place for six months, and it’s unclear whether it will usher in a new approach to welfare or whether the older, punitive approach will resurface once COVID-19 makes a retreat. The use of the term ‘supplement’ suggests the latter, but the temporary move raises the question of what an increased payment is expected to cover for an individual that is materially different from one’s unemployment before the crisis.

Scott Morrison had initially ruled out a UK-style wage subsidy. However, an announcement this week indicated that a flat-rate JobKeeper wage subsidy of $1500 a fortnight would be part of new measures to keep people employed.

Poverty before and after COVID-19
Before COVID-19 hit our shores, there were 3.24 million Australians living in poverty including 774,000 children. It was clear then, and has come into sharper focus now, that our welfare system was failing those most vulnerable in our community. In 2019, 680,000 Australians received a partial or full Newstart payment. The Federal Government projects that another 1 million Australians could be unemployed due to the pandemic.

COVID-19 has fast tracked what many were predicting would happen in 20 years’ time due to automation and technology: large-scale unemployment, particularly among low-skilled workers. We’re now facing the prospect of the unemployment rate jumping from 5.1% to 15% . The speed with which so many people found themselves unemployed exposes the precariousness of the labour market and the lack of protections in place for people in casual employment.

Economic recovery will be slow, and many people will face significant hardship in the coming months, but at some point, cafes and shops will re-open and Australia’s service economy will regain momentum. Many jobs will stay online, while others such as hairdressers, baristas and fitness trainers are likely to resume their in-person services. However, for those who faced significant hurdles in the job market before COVID-19, they will continue to face them in a post-pandemic world.

Anglicare WA provides support, counselling and advocacy for people struggling with poverty, domestic violence, homelessness, grief and other forms of crisis or trauma. Our breadth of programs across the State – many delivered in partnership with government and non-government agencies – gives us a deep understanding of entrenched disadvantage and poverty. We have gained insight into the system failures that have led to significant numbers of Western Australians experiencing financial hardship and compounding challenges such as mental health issues, mounting debt and barriers to employment.

In 2019, Anglicare WA’s Rental Affordability Snapshot found there were 0 rental properties of 9,200 across WA that a single person on Newstart could afford. As part of our preparations for the 2020 Snapshot due to be released at the end of April, I interviewed a man who shared his experience of trying to survive on Newstart. He explained that after paying rent, he has enough money to buy food for one week and relies on Foodbank for the second week to get by. He expressed frustration over why a system designed to help made it difficult to survive, much less apply for jobs, enrol in training or travel to an interview.

The 100 Families WA project conducted a survey of 400 people living in entrenched disadvantage in Perth. Among those, 79% did not have access to $500 in savings for an emergency, compared with 12% of the general Australian population. The digital divide is significant for this group, with 33% of families surveyed reporting they did not have and could not afford access to the internet at home compared to 2% among the broader Australian population. For these families, the increase in the rate of JobSeeker Payment, and the removal of compliance requirements, will come as welcome relief. They will continue to face the same barriers they did before in terms of gaining employment (46% of 100 family participants in receipt of Newstart reported that illness or disability made it difficult for them to get employment) but at least for the time being, they will be able to keep the lights on.

The impact of the stimulus packages announced so far for someone who previously had access to less than $280 per week cannot be overstated. It should have happened years ago. In addition to the economic implications of the welfare package, there is an equally important shift in attitudes towards people in need of financial assistance. People accessing Centrelink benefits talk about the shame of being viewed as a ‘dole bludger’. In Anglicare Australia’s report ’Paying the Price of Welfare Reform’ , one man described his experience:

You feel absolutely worthless, why bother, no one at Centrelink cares. Who am I? I’m just another collecting money from the government. But I have worked for most of my life. So you think bugger it, bugger the world and you want to go and die, go to sleep and never wake up. That’s how you feel. There is a stigma, another back injury, a mental case.

As people lined up outside of Centrelink offices in late March, the reality of the scale of job losses and the inadequacy of our system to deal with it became apparent to the wider Australian population. As more people need to access Centrelink payments, the indignities in the system will be further exposed.

Looking ahead
With new welfare policies being developed each week, it is hard to imagine what the social policy landscape will look like in six months. Once the immediate public health crisis diminishes, some people will have found a job while others will remain unemployed or under-employed. That group, having become accustomed to adequate money for food and rent, will find the rate cut in half. We will need, then, as we need now, a responsive social safety net that respects people’s dignity. This can be achieved by:

  1. Continuing the increased rate of Jobseeker payments beyond six months. If someone loses their job due to Coronavirus they are no more worthy of support than someone who loses their job for another reason.
  2. Suspend mutual obligations. Rightly so, the rules have been relaxed so people do not need to prove they’ve applied for 20 jobs a month, but those changes have only been put in place until 27 April.
  3. Overhaul the job services system. Once the immediate crisis has passed, we need to ensure the job services system adapts to the new conditions in the labour market, matches training to employment opportunities and provides tailored social support to address mental health and other barriers to work.

Dr Shae Garwood is manager of Research, Advocacy & Prevention at Anglicare WA.


UWA Public Policy Institute