JobKeeper: Who Loses Out?

By Shannen Potter

Australia's most vulnerable continue to lose out under the Coalition's economic response to COVID-19

The conservative Coalition government has embarked on a massive economic stimulus package in response to the economic crisis generated by COVID-19. By their own estimates, $320 billion has been spent on economic support measures related to COVID-19. This makes up 16.4% of our national GDP. 

Unemployment benefits have been doubled overnight, people receiving welfare payments will receive $750 cash and the Jobkeeper program, via businesses, should fund the salary payments of millions of Australians for the next six months. Further, businesses are having cash pumped into them, from cash injections of up to $100,000 to small and medium businesses to the billions of dollars spent on bail-outs for struggling airlines. Mortgage payments have been paused by many large banks, and landlords have been given a discount on land tax. 

Even with all this activity, there are some clear losers in the economic response to COVID-19. People who already experience disadvantage are more likely to be excluded by the measures announced. Casual workers, people with disabilities, and migrants, especially asylum seekers, have all been practically systematically excluded from increased Centrelink payments and the Jobkeeper program. 

Firstly, the COVID-19 supplement available to those receiving Centrelink has been limited to payments which relate to work or study: Jobseeker (formerly Newstart), Youth Allowance, Austudy and Abstudy. People with disabilities and their carers, old age pensioners and veterans who receive welfare payments won’t receive any increase. Further, the eligibility requirements for those payments that do make one eligible to receive the supplement are strict. Refugees and asylum seekers, many other migrants, New Zealand citizens, international students, most young people under the age of 22 and people with a partner who fail the income test are all ineligible to receive these payments, and therefore unable to receive any welfare support during this crisis. 

While Jobkeeper may step in and provide relief for some of these people, such as migrant workers on certain visas and New Zealand citizens, a number of people remain excluded from this scheme as well. Casual workers who have been employed for less than 12 months are ineligible, with this group most likely to be made up of young, precariously employed workers in the hardest hit industries like hospitality. People who don’t have work rights, such as refugees and asylum seekers, are also not eligible. All those who lost their jobs before this program was announced - up to 1 million people according to the Australian Council of Trade Unions - will also be excluded. Further, there is no requirement that employers apply for Jobkeeper for their employees. There have already been media reports of employers abusing the system by, for example, requiring their employees to work excessive hours in dangerous conditions in direct contact with the public in order to receive the payment. Fair Work and the Australian Tax Office have the power to discipline employers who do the wrong thing, but this is cold comfort to workers who need to pay rent and feed their families in the immediate future.

It is clear that the economic response to COVID-19 leaves many behind. There are potentially millions of people who are ineligible for various reasons for increased welfare payments, or any welfare support at all, and for Jobkeeper. These are people who most likely belong to groups that are already disadvantaged: people in precarious employment, migrant workers, and young people. Those who are unable to access government support are functionally on their own during this crisis, and the effects of this exacerbated disadvantage will only continue once the health crisis has subsided. We urgently need to do more to support all workers, and vulnerable people in our community particularly.

In addition to this, the package announced is ultimately heavily weighted towards supporting the continued prosperity of businesses and property owners, instead of providing direct support to communities and individuals who need it. This is classic trickle-down economics wrapped up in a Keynesian package.  

For example, massive concessions have been given to landlords, including the widespread suspension of mortgage payments and rebates on land tax. A $440 million package has been announced by the NSW Liberal government, almost every dollar of which is dedicated to providing assistance to landlords. The only direct assistance that has been given to tenants is a 60 day freeze on all eviction proceedings. In NSW, the only material obligation landlords have to renters in terms of rental relief due to COVID-19 is to negotiate with them in good faith - a laughable prospect considering the power imbalance between landlords and their tenants. It is clear that many renters will come through this crisis with, at best, massive debts due to rental arrears and, at worst, at real risk of homelessness. 

It is clear that providing a large degree of support to those in positions of economic power - landlords, banks, large corporations - does not result in that support flowing to the average person. Take, for example, the fact that Qantas was provided with a large sum of money in the early days of the crisis, only to put thousands of workers on indefinite leave shortly after. The government response to COVID-19 merely props up businesses and landlords, while leaving working class people to fend for themselves.

The sum of these measures is simply that ordinary people lose out. There is an underclass of people in Australia who now cannot work, cannot access government support, and cannot pay their rent. There is no clear plan for how these people will remain fed, housed, and able to access medical care during and after this crisis. Further, there are many more Australians who are facing a long period of un- or underemployment, debt, and the risks of falling into poverty. We need a real plan to confront these essential inequalities in our community and our economy if we have a hope of surviving the economic crisis of COVID-19. 

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  • Shannen Potter
    published this page in Articles 2020-04-23 17:52:46 +1000