Welfare organisations fear the worst of economic crisis yet to come

June 12, 2020
Photo: Australian Council of Social Service

The devastating impacts of Australia’s economic crisis are clear for all to see, but many in the welfare sector believe the worst is yet to come.

The official May unemployment rate was 6.2%, with almost 600,000 workers losing their jobs in March–April according to the Australian Bureau of Statistics. Roy Morgan Research put the figure closer to 15%, with more than 2 million unemployed.

Despite the slow reopening of the economy, Treasury Secretary Steven Kennedy told a Senate inquiry on June 9 that official unemployment is forecast to rise to 8% by September.

September is when the JobKeeper wage subsidy program, which is helping keep about 3.5 million workers employed, is set to end. With no signs of any economic recovery on the horizon, many of these workers will likely lose their jobs, pushing the unemployment level higher into next year.

Critically, September also marks the end for the $550 JobSeeker Coronavirus Supplement, which essentially doubled the rate of benefits unemployed workers receive.

According to a worker at one of Australia’s largest welfare organisations the danger is that, come September, many of those currently receiving JobSeeker or JobKeeper will be thrust into poverty, and left with no option but to endure the misery of asking for charity to survive.

Unemployed workers

The worker told Green Left the JobSeeker supplement had meant “a lot of the people we usually heard from prior to COVID-19, most of whom were generally the same people and usually on benefits, have stopped calling us because of the extra money they are now receiving.

“Normally, they would have to ask for charity to get through to their next payment. But the JobSeeker supplement means they can now cover those needs. I think it will definitely be the case that these people will once again be forced to ask for assistance if the extra Centrelink payment is taken away.”

The strain on welfare organisations and pain for workers after September will be compounded by the ending of the JobKeeper program, the worker said.

“There was a period before JobKeeper payments came through where we got a wave of people calling, many with good, decently-paid jobs, but who were living beyond their means.

“It took just a week or two of not having their salary for them to fear losing their home and reaching the point where they had to swallow their pride and do something they never expected they would have to do: ask for charity.

“Once JobSeeker and JobKeeper end, it is highly likely that we will see a flood of returning regulars, along with many newly unemployed, who will have no option but to seek financial assistance or risk losing everything.

“This is a strong argument for why the JobSeeker payment should be higher, not only to lift people out of chronic poverty but also to not force people to go through the pain and misery of having to ask for charity when they’re hungry.”

Homeless people

Another cohort of regulars that have recently stopped asking for help are homeless people. “A lot of people have been taken off the streets and put in the extra accommodation that has been made available to them.

“Often, people living on the streets prefer not to stay in the regular places they are offered for accommodation, as they are generally violent or depressing places.

“But because of COVID-19, they have now been offered emergency housing in hotels where they have a TV, a nice bed and, most importantly, a safe surrounding.

“People talk about a housing crisis and the need to get people off the streets. But we have seen that are enough rooms available for people to stay [safe]. Due to health reasons, the government has found accommodation for people who it previously said it couldn’t provide with a roof over the head. 

“As with JobSeeker, COVID-19 has shown that the government will only act when it needs to, even though it could easily provide housing for those that need it most.”

Cracks in safety net

While the temporary rise in JobSeeker has led to less calls for help overall, the worker explained that the calls they have received have exposed some important cracks in the safety net.

“Some of the new calls we have received are from those that cannot access benefits, in particular asylum seekers. They have started approaching us because, previously, despite being denied work rights in many cases, they were able to get through by doing cash-in-hand jobs.

“The crisis has meant that this work has dried up and, when they lost their jobs, they are left in limbo and have no choice but to call us.

“Generally, they don’t like to ask for assistance, but when you don’t have money for food or rent you have no other option but to turn to charities.

“Many international students also have found themselves in a similar situation. Previously, many relied on families back home or being able to work here.

“But as the economic situation has worsened internationally and their work hours have been cut here — and with no access to unemployment benefits — we have seen a wave of international students come to us seeking help.

“The COVID-19 crisis has shown that there are important gaps in the safety net that need to be filled immediately to ensure people, like international students and non-citizens, are not left out.

“However, it has also shown that the government can provide the necessary assistance required to ensure people do not have to suffer poverty and indignity.”

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