The Covid-19 payment stimulus measures: How will they affect women?
In partnership with the National Foundation for Australian Women (@NFAWomen), we are running a series of pieces that analyse how the Covid-19 pandemic is differentially impacting on women. In our first of the series, Frances Davies (@fdavies49), of the NFAW Social Policy Committee, provides an overview of the Jobseeker, Jobkeeper, and other stimulus payments and what they will mean for women.
Why a gender analysis matters
Female-dominated industries are being hit hardest in the economic downturn precipitated by the Covid-19 pandemic. Photo by Marco Bianchetti on Unsplash
Pandemics, including COVID-19, affect men and women differently. The by-products of economic shock and its impact on insecure employment will hit women particularly hard. Women are over-represented in industries most affected by the virus. Caring roles will increase, and this will impact women more than men. Women are the majority of long-term unemployed, sole parents and casual employees (ie without sick leave entitlements), and stockpiling is not an option for the economically vulnerable. When schools close, travel is restricted and aged relations are at risk, COVID- 19 puts an additional strain on existing inequities.
“Recognising the extent to which disease outbreak affects women and men differently is a fundamental step to understanding the primary and secondary effects of a health emergency on different individuals and communities, and for creating effective , equitable policies and interventions.” COVID-19:the gendered impact of the outbreak”, the Lancet, 6 March, 2020.
This inequity is not biological, but social. Women are vulnerable because of their over-representation in certain sectors of the economy, including the feminisation of education (63%) and health care (nearly 80%) sectors (see Table 8). More women than men work part-time and are secondary income earners.
In past recessions, employment has taken longer to deteriorate and longer to recover. Ken Henry has pointed out the detrimental effect on male workers of the recession of the 1980’s. In the past, older workers and those with weak attachment to the work force have struggled when there is a recovery.
This situation is different because the government has effectively shut down a raft of major industries, including aviation, tourism, international education, and hospitality, causing rapidly increasing unemployment. A majority of employees in these industries are women. Hopefully, the initiatives the government has announced, outlined below, will help alleviate this result.
How the government is responding
In staged responses the government has introduced packages that have significantly boosted the adequacy of unemployed, parenting and student payments, provided top-up payments for pensioners and introduced a massive wage subsidy arrangement that provides income to employees while decreasing costs to businesses.
The JobSeeker Payment (previously the Newstart Allowance) has been doubled for 6 months from 27 April. In addition, unemployed people previously excluded from payments are now covered. Those now included are students, newly arrived residents, many temporary visa holders and people caring for those affected by the virus. Restrictions have been waived, including the liquid assets waiting test and the assets test. The payment will be made automatically. Services Australia will have an extra 5000 staff.
A summary of economic stimulus initiatives. Photo credit: The Conversation.
Key details of the income support changes described by Professor Peter Whiteford and Associate Professor Bruce Bradbury in The Conversation on 25 March 2020, are provided below. In addition, for members of a couple, the employed partner can now earn up to $78 000 per annum without excluding the unemployed person’s eligibility for the benefit. This change may help up to 400 000 workers, most of whom are women, from being disproportionately affected. In most couples the woman is designated as the secondary income earner, which would have left her without any income under the old rules.
The JobKeeper Payment gives affected businesses $1,500 per fortnight to help pay the wages of an estimated 6.7 million Australians for six months.
According to analyses conducted by The Grattan Institute:
The wage subsidy scheme will be available for employees — including part-time workers and eligible casuals — in regular employment for at least 12 months as of March 1, so it captures people retrenched or stood down in recent weeks, providing firms now bring them back onto the books.
The initiatives are very welcome. The scale of the package is unprecedented. The $130b package is worth 13% of national income and about 16% of GDP. It is the most important element of the $320b combined government and RBS package. It should help keep more people in jobs , boost confidence and help the economy rebound. A key issue will be how quickly it will flow into the economy.
In addition to assistance for those in the labour force, aged pensioners, carers, the disabled and families on payments receive two Economic Support Payments of $750.
Concerns – and the longer-term picture
While these payments are generous, the ACTU and others have welcomed the packages but believe the wage subsidy should be raised to the level of the median wage and should also cover casuals who have not been with their employer for the required minimum of 12 months. According to an analysis conducted by BankWest Curtin Economics Centre, “there are likely to be around 950 000 (currently) in the accommodation and food services, retail trade, and health care and social assistance sectors [who will not qualify]. A higher share of these workers are women”.
Most casuals are part time. The new JobSeeker Payment could result in approximately 80% of part-time employees receiving more than their current salary if they lose their jobs.
Decades of funding cuts have put our health, welfare and housing services in jeopardy. The punitive welfare regime that Australia has had in place for many years resulted in increasingly harsh compliance arrangements and schemes such as robodebt. The increased JobSeeker Payment constitutes an acknowledgement that Newstart, below the poverty line at $40 a day, was too little to live on and hopefully will not return to that unacceptable level.
Abdul Rizvi has highlighted the plight of the over 1 million temporary visa holders other than New Zealand citizens, who will not be eligible for assistance. This group receives very little social assistance but they do pay tax and many are unable to return home. They are unable to access any superannuation money they may have accumulated under current rules. Employers will understandably prefer to retain workers eligible for the Job Keeper Payment. Rizvi believes this could result in a humanitarian disaster.
A third of the private rental market are people on low incomes who spend more than 30% of their income on rent. Tenants will be protected to some degree by the recently announced ban on evictions. Further assistance is being considered by the government.
Aged care workers will receive a $234.9m retention bonus to shore up numbers in residential and home care. Disability support workers are not included even though many clients have health issues affecting their immune systems, respiratory capacity or lack of cognitive ability. Disability workers are part of an ageing workforce. They may be tempted to apply for the boosted JobSeeker Payment.
15 000 people have been compulsorily placed on the Cashless Debit Card and while they will receive the Economic Support Payments, they will not be allowed to withdraw the money in cash. This will severely limit their financial flexibility.
Domestic violence services are already reporting increases in demand for help. For women escaping domestic and family violence, social security is critical. Centrelink support is vital in helping people affected by violence get to safety and start rebuilding their lives. The Crisis Payment is an additional payment available for victims of family violence as a one-off payment.
However, there are many issues for people experiencing domestic violence that relate to the structure and payment of social security payments. These include delays in payment for people in crisis and debts resulting from administrative error and/or opaque Centrelink correspondence regarding reporting obligations.
Often women deemed to have been living as a member of a couple are left with large social security debts while their violent partner or ex-partner has no financial liability.
The social security system’s expectation that people in relationships will share income and assets ignores gendered power imbalances in many relationships and increases some women’s risk of domestic and family violence.
The inability to secure income support can force some women (and their children) to stay in the home, which could be exacerbated by home lockdowns.
The packages are also something of a gamble. We could face the worst recession on record the longer lockdowns continue. There could be a downward spiral of consumer spending, increases in bad debts, mortgage defaults and corporate failures.
Government debt will be much higher following the stimulus packages. However, without these substantially increased government outlays, the effect on society, especially women (whose experience of poverty is greater than men’s) would be catastrophic. It is important that after the crisis, Australia doesn’t undertake a stringent austerity regime because of an overstated debt crisis. Australia’s fiscal position is in the highest category possible. There is ample room to substantially increase spending. As Adam Triggs explains, “The Australian government could increase debt by three-quarters of a trillion dollars - far more than anyone is suggesting - and still have less debt as a percentage of our economy than the average among our G20 peers.”
This post is part of the Women's Policy Action Tank initiative to analyse government policy using a gendered lens. View our other policy analysis pieces here.
Posted by @SusanMaury @GoodAdvocacy