Pandemic’s economic pain worse for the young, migrants and women
12 August 2020
The economic impact of the Coronavirus pandemic has created a new group of economically vulnerable people, with young people, recent migrants and women among those hardest hit.
Research that has tracked close to 6000 working Australians since April also found those already on average or lower incomes were most likely to have suffered negative impacts to their employment during the pandemic.
Commissioned by not for profit Good Shepherd, the research found that 60 per cent of working Australians on average or lower incomes had experienced employment changes such as having hours reduced, pay cut, being stood down or made redundant, creating a new class of economically vulnerable people.
Young people in the workforce were among those most financially impacted, with half of those aged 14 to 24 now economically vulnerable.
Migrants who have been in Australia less than five years were far more likely to have had their work negatively impacted, compared with longer term migrants and Australian-born.
Good Shepherd’s CEO, Stella Avramopoulos, said the research by Roy Morgan Research offered hard evidence that the most vulnerable were bearing the greatest economic impact of the pandemic.
“These are shocking figures. Two out of five of all working Australians have suffered job losses, cuts to hours and pay or being stood aside. Even worse, those already on average and lower incomes are the most affected.
“Despite the government supports being offered during this pandemic, financial distress is now the most significant welfare issue facing Australia. We need long-term, structural changes to the social welfare safety net, with new service models and cross-sector strategies.
“People are overwhelmed, they are distressed and they often feel stigma and shame. This is a crisis that no one expected, it has hit suddenly and it is out of peoples’ control.
“Good Shepherd’s financial counsellors and other front-line staff have supported many thousands of people since this pandemic hit. People need safe, reliable information and support to help them navigate the multiple challenges they are facing,” Ms Avramopoulos said.
Good Shepherd is supporting those experiencing financial distress due to the pandemic with a range of services including financial counselling and Household Relief Loans Without Interest, which is supported by the Australian Government and National Australia Bank.
The program includes financial information and support and access to loans of up to $3000 for rent and utility bills for those eligible. An individual’s income must be less than $60,000 gross or less than $100,000 for couples or people with dependents, or be receiving a Government benefit, such as Centrelink healthcare card or Pensioner concession card.
The Minister for Families and Social Services, Anne Ruston, said the Scheme will help Australians experiencing financial hardship.
“This additional funding will help around 40,000 Australians access immediate financial relief to help pay household bills. Better access to emergency relief services means less reliance on high-risk, high-interest loans to get people through these tough times,” Minister Ruston said.
NAB’s Group Executive Personal Banking, Rachel Slade, said the bank would continue to work with government and key partners to support people through the coronavirus crisis.
“We know some people are doing it tougher than others and need financial relief. That is why we’re helping fund this program – we see it making a difference for Australians through this uncertain time,” Ms Slade said.
The Household Relief program has been in pilot phase for six weeks and is now being rolled out across the country. Ms Avramopoulos said Good Shepherd was already seeing people not only in financial trouble, but also with significant social vulnerabilities.
“About 20 per cent of people have a social vulnerability including family violence, disability, gambling, mental health, relationship or substance abuse issues. Half have a financial vulnerability, including financial hardship and financial disadvantage and only 16 per cent could meet an unexpected expense of $2000.
“The main driver of the financial crisis for the people we are seeing is credit card debt and personal loans and nearly all of the people referred have at least one payday lender,” Ms Avramopoulos said.
Key findings of the Roy Morgan study include:
- 42 per cent of all working Australians (two out of five) have become economically vulnerable, with negative changes to their employment caused by the pandemic.
- 58 per cent of working Australians on lower and average incomes have experienced negative changes to their employment caused by the pandemic.
- More than 50 per cent of working Australians aged 14 to 24 have become economically vulnerable.
- Migrants who have been in Australia less than five years are far more likely than Australian-born people to have become economically vulnerable, with 38.4 per cent of migrant working Australians who have been in Australia less than five years now vulnerable.
- Small business operators and those working in recreation, entertainment and hospitality are the most likely to have become economically vulnerable, with 47 per cent of those working in industries such as sport and recreation, entertainment and hospitality now economically vulnerable.
For more information on Household Relief Loans Without Interest visit householdrelief.org.au/
* The newly vulnerable is defined as a Couple with/without children or Single with children AND Annual household income < $100,000, or Single without children AND Annual personal income < $60,000
For media enquiries, contact Clare Kermond, 0407 907 632 or email@example.com