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Posted: 2021-09-03 18:54:16

Locked-down workers and businesses are struggling to get by with lower levels of assistance than the programs that saved the economy in 2020.

With half the nation's population locked down, Angela Jackson, lead economist at Equity Economics, believes the value of the goods and services produced in the entire nation – its gross domestic product or GDP – will slump 4 per cent in the current quarter.

"So we're talking about households and businesses suffering huge drops of income."

Since June, the federal government has distributed almost $5.2 billion in disaster support payments. But businesses and economists are concerned the relatively weak support is putting Australia's economic recovery in peril.

"It's very difficult, difficult for everyone. But the lack of government support is, from a business point of view, financially, very difficult," lamented Michael Savage of Enchanted Adventure Garden in Arthurs Seat, just outside Melbourne.

Michael Savage
Michael Savage is worried about the lack of support for the part-time and casual workers he'd normally employ during school holidays.(

ABC News: Peter Healy

)

Normally, Mr Savage would be busy preparing hundreds of staff to meet the needs of up to 3,000 patrons a day during school holidays this month.

Instead, he has been watching a core group of 10 employees build a new attraction and hoping for a better summer period.

"There's very little in place for business support," Mr Savage said.

"I'm accessing a couple of grants that we've got from a state government level (in Victoria) but nothing has come from the feds this year. No JobKeeper. No grants from the [federal] government."

'Big and bold' support

Dr Jackson said strikingly different approaches have been taken to the pandemic in 2020 and this year.

Angela Jackson
Angela Jackson, lead economist at Equity Economics, is worried about a huge drop in government support.(

ABC News: Peter Healy

)

"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's an order of magnitude less economic support for businesses and households through these latest shutdowns across Victoria and New South Wales."

As well as financial assistance like wage subsidies for apprentices and loan guarantees, initiatives in 2020 included a ban on rental evictions, enforced rental negotiation for commercial leases, mortgage pausing for owner-occupiers and landlords (essentially stopping repayments). Many of these programs have also ended, although some have restarted, such as mortgage deferrals.

"The [federal government] spent over $300 billion last year in the economy," Ms Jackson said, noting that some of those stimulus programs are still rolling out.

"To date, with the disaster payments, as a way of comparison, we've only seen $5.2 billion spent."

Disaster payments

Last year, direct support came in two main ways.

Wage subsidy JobKeeper, paid to workers through their employers, cost $90 billion.

People on welfare payments, like the re-named JobSeeker unemployment benefit, also got a generous coronavirus supplement that in many cases doubled the amount they received. That cost over $20 billion.

Those programs ended earlier this year. But after lockdowns in Victoria and then New South Wales, the federal government moved to a system used after natural disasters, enabling it to quickly dispense cash to people forced to stay at home.

More than 1.9 million people have received one of three different types of pandemic response payments.

The amounts are uneven across states and territories, due to their population and the length and breadth of lockdowns there.

These figures from Services Australia show what had been given out since June, up until midnight on Wednesday.

Payment map
  • 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, with 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.

People in Western Australia and Tasmania have not been eligible for the grants.

Payment gaps

The COVID Disaster Payment is by far the key payment, with $5.03 billion paid to 1.7 million people.

At $750 a week for people who have lost more than 20 hours of work, it is as generous as the original JobKeeper payments (which were whittled down over time).

But the payments exclude many who have lost work, including anyone on the pension, JobSeeker, Austudy, Carers Payment, Parenting Payment, Youth Allowance and other welfare payments.

"Sadly, what that has meant is that we have a two-tiered system of support," said Charmaine Crowe, senior adviser at the Australian Council of Social Service (ACOSS).

The result means that many people – on meagre levels of welfare payments – have seen their employment ended by government decree, but have not been able to access additional support to make up for their lost wages.

Mr Savage said one of his staff members, part-time tree-surfing instructor Charlie Panteli, currently stood down, who is studying to be a primary school teacher, was a prime example.

"He can't access it. But I've got 17-year-olds that are still in high school and they get through $375 bucks a week in support payments because their regular shifts have been cancelled," he said.

"Sometimes the money's not going to those that need it. It seems very uneven."

'There is no sort of comfort'

In the past month, Mr Panteli has received some help from the federal government, to top up his Austudy payments.

Charlie Panteli
Charlie Panteli normally works part-time, helping visitors navigate tree climbs, to supplement his Austudy payments. (

ABC News: Peter Healy

)

A $200 income support payment – $85 million to 140,000 people – was introduced last month for people on the welfare payments listed above who have lost more than eight hours of work.

"It's just the level of not knowing, there is no sort 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're not worried about money," he said.

"When everything was just cut [back], I was getting $240 a week-ish. It just didn't cut it."

Mr Panteli is hopeful the attraction can open for the summer holidays and he can resume his work high in the trees, sending people down the zip lines to the ground.

"It's pretty hectic. There's people everywhere, you always have people running coming in late and it is stressful," he said.

"I really love it. It's a great place to work while you're studying."

Poverty ended, resumed

In 2020, the coronavirus supplement fulfilled a two-decade dream of welfare advocates, taking minimum levels of support for Australians above the so-called poverty line, a figure generally accepted as half the median household income of the population.

"What the government did last year was extraordinary. They literally smashed poverty overnight," said Ms Crowe from ACOSS.

Poverty among people on the JobSeeker unemployment payment – previously called Newstart or, colloquially, 'the dole' – fell from 88 per cent down to 25 per cent.

"When the government removed those supports, poverty rose back up to 85 per cent for that same cohort of people," Ms Crowe said.

JobSeeker payments were lifted by $25 a week earlier this year, the first time a government has increased the rate in real terms in more than 20 years. But the simultaneous removal of the coronavirus supplement meant recipients were much worse off.

Mr Savage was perplexed by the government's response to a situation very similar to the one last year, where it deployed immense fiscal firepower to keep the economy moving.

"I don't know why they can't spread it around and support the populace," he queried.

"We're the ones that pay the tax and prop everything up. It's time to give some more back and help those that are really battling."

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