ELECTION 2022: experts warn ‘inevitable fall’ in living standards

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Homelessness in inner Sydney. Photo: Peter Rosengren

 

 

 

In an election campaign dominated already by “gotcha” questions about economic statistics, Catholic agencies and researchers warn that entrenched poverty, rising cost of living issues and social “scarring” in the wake of the COVID-19 pandemic will result in an “inevitable” fall in living standards in the 12 months after the federal election.

Nearly all Catholic agencies are agreed that economic justice and coming to terms with the ongoing crisis of COVID-19 ought to be the central focus of the election.

Dr Tom Barnes from the Australian Catholic University’s Institute for Humanities and Social Sciences found in a new study that “deep scarring” from COVID-19 and pandemic shutdowns is yet to be fixed, despite official unemployment figures showing a “miracle recovery”.

“The prevailing inequalities and social marginalisation that was there pre-pandemic have been significantly worsened,” Dr Barnes told The Catholic Weekly.

“It’s significantly worse now in a period of so-called recovery than it was before. That’s what the research is showing.”

His study, Scarring effects of the pandemic economy, focused on the Victorian experience of COVID-19, finding that the total labour force shrank by 3.4 per cent during the 2021 Delta wave, with the female labour force falling by 5.8 per cent.

“Migrants on temporary visas were also excluded from JobKeeper and JobSeeker, meaning a large proportion of the 2.2 million on temporary visas were ‘driven to desperation’.”

Underemployment, especially among women and youth in hard-hit sectors like hospitality, tourism, retail and the arts, has also been obscured by the official figures.

For migrants the pandemic was crushing; in Victoria around 47 per cent of new migrants in the last five years have come from central and south Asian countries like India, Nepal and Bangladesh, and suffered unemployment during the pandemic four times higher than Australian-born workers.

Nearly one quarter of all south Asian migrants were unemployed during the pandemic. “Probably that underestimates the true scale of joblessness among those workers by about half, because it’s the official statistic,” Dr Barnes said.

Migrants on temporary visas were also excluded from JobKeeper and JobSeeker, meaning a large proportion of the 2.2 million on temporary visas were “driven to desperation” if they could not follow official government advice to return to their countries of origin because of poverty, illness or border closures.

“Australia’s response to the pandemic vis-a-vis temporary migrants was particularly harsh by international standards,” Dr Barnes said.

“Australia’s response was particularly punitive, and personally I would argue, racist.”

More than 110,000 people were waiting for social housing in NSW and some of these people had been waiting more than ten years. Photo: Sardaka/Wikimedia Commons, CC BY 3.0
More than 110,000 people were waiting for social housing in NSW and some of these people had been waiting more than ten years. Photo: Sardaka/Wikimedia Commons, CC BY 3.0

Similar research on NSW found that the Delta wave lockdown in the second half of last year was much worse in terms of total job losses and labour force decline, with vaccination mitigating the worst impacts of Delta once it arrived in Victoria.

Dr Barnes told The Catholic Weekly that in addition to his research on the effects of COVID, Australia also faces a cost of living crisis in the next year that will manifest itself only after the election.

Financial markets currently predict the Reserve Bank will “significantly increase the cash rate after the election … that will add hundreds of dollars a week to people’s housing costs, for average mortgage holders, which will be passed on to renters”.

“Because housing costs are generally the biggest cost of living, significant rises to housing costs will cut real incomes and cut the standard of living,” he said.

“What we’re facing over the next 12 months is a falling standard of living.

“That’s going to hurt everyone, but it’s going to cause serious pain for a significant minority of householders. That is now inevitable.

“New modelling from the Society of St Vincent de Paul, published by the Australian National University, calls for the JobSeeker rate to be increased by $436 a fortnight.”

“Higher housing costs, higher interest rates, combined with higher levels of indebtedness, plus falling real wages, that’s a recipe for falling living standards.

“This is in an economy that’s supposedly fully recovered with record low unemployment. I don’t think so.”

Dr Barnes also argues the JobSeeker rate must be at least doubled, to $80 a day, based on evidence that the coronavirus supplement vastly improved the wellbeing of Australia’s poorest.

Catholic social justice agencies are united in calling for an increase in JobSeeker and other government benefits.

New modelling from the Society of St Vincent de Paul, published by the Australian National University, calls for the JobSeeker rate to be increased by $436 a fortnight, alongside increases to the Parenting Payment and Family Tax Benefit A.

Doing so “would help to lift one million people out of poverty and restore their dignity, and in many cases help them move towards re-entering the workforce,” said St Vincent de Paul President Clare Victory.

“The One Meal Kingsgrove service, which provides us with meals every week, offers tremendous support for families in our local community who are doing it tough," says Bernard Deady, President of Vinnies Kingsgrove Conference. Photo: Alphonsus Fok
Parish and school communities have reached out to the disadvantaged during the COVID-19 pandemic Photo: Alphonsus Fok

Catholic Social Services Australia likewise said that, “In real terms, NDIS packages have been reduced, unemployment and health benefits eroded while at the same time some three million Australians, including nearly 750,000 children, now live in poverty … that should be front and centre of the policy agendas of both the Coalition and Labor.”

The Australian Catholic Bishops have also called for “a new social contract that focuses the economy more clearly on the common good” in their 2022 election statement, including a call to “raise the rate of JobSeeker to at least meet the poverty line”.

Fr Peter Smith, who heads the Archdiocese of Sydney’s Justice and Peace office, told The Catholic Weekly that “economic justice for all” ought to be the number one election issue for 2022.

“That is, people are given security of employment, fair pay for a fair day’s work. If people are underemployed or unemployed they should be looked after,” he said.

He also added his office’s support to calls for an increase to JobSeeker. “The pandemic has shown us that there is a role for big government. Government has to take responsibility for the community. In the pandemic they just had to step up and make decisions.

“Whenever the government doesn’t support people, groups like the Catholic community and others of goodwill, step up and look after people: the Society of St Vincent de Paul, Jesuit Refugee Services etc.

Justice and Peace Promoter for the Archdiocese of Sydney Father Peter Smith

“Because we do it, the government doesn’t have to. It becomes this vicious cycle, with the community – civil society – doing the government’s job. It’s time government took responsibility for what we’re doing.”

In terms of Catholic Social Teaching, Fr Smith said this was a “failure of subsidiarity”, in which the government is failing to play its appropriate role in the economy in the wake of the widespread social crisis of the pandemic.

“We all recognise the impact COVID has had in terms of employment, in terms of our own relationships, in terms of what we’ve been forced to do,” Fr Smith said.

“It’s really shattered most of us, to think our world could be turned upside down by the Pandemic so quickly.

“I also believe there’s something underlying in terms of our mental health, in terms of our sociability in society we are yet to come to grips with.”

The Justice and Peace office has published a “Common Good voting kit” to remind Catholics that, in the wake of the pandemic, we are “relational animals”.

“We’ve had a pandemic in which we’ve heard that other people are a threat to us – keep away from them! I think this has a very subtle impact on the way we view society,” Fr Smith said.

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