The COVID poverty wave revealed

Despite early progress to reduce inequality during the pandemic, new research reveals more people than ever are locked into poverty 

While government stimulus packages in 2020 saw levels of poverty and inequality dramatically reduced, new research reveals this reduction was short-lived. 

Released by the UNSW Sydney and the Australian Council of Social Services (ACOSS) on Wednesday, the new report examines how people at different income levels fared during the two phases of the pandemic across 2020 and 2021.

Despite the unemployment rate hitting 17 per cent during the first outbreak of COVID-19, the Coronavirus Supplement and JobKeeper significantly reduced income inequality and poverty. For the first time in years, many people on the lowest incomes could afford to pay household bills and put food on the table.

But by April 2021, both the coronavirus supplement and JobKeeper had been rolled back. When the Delta variant spread across Australia later that year, there was no pandemic support for the approximate one million people still unemployed. 

Even when the COVID Disaster Payment was introduced in September 2021, 80 per cent of those on the lowest income support payment were excluded. 

Subsequently, the number of people in poverty rose by around 20 per cent and income inequality once again increased, with a bias in jobs growth towards high-paid professions and a rapid rise in investment incomes. 

Scientia Professor Carla Treloar, director of the Social Policy Research and the Centre for Social Research in Health, said that this latest research painted a grim picture for those on the lowest incomes during the pandemic recovery. 

“Despite remarkable early progress in reducing poverty and income inequality during the COVID recession, they are both likely to be higher now than before the pandemic,” Treloar said. 

“That’s the legacy of the policy response to the pandemic.”

ACOSS CEO Dr Cassandra Goldie said that one thing the pandemic demonstrated clearly was that poverty and inequality were not “inevitable”.

“They [poverty and inequality] grow because government policies allow them to, and in many cases, directly increase them,” Goldie said. 

“We also showed that good social policy, tackling poverty, is good economics. By targeting income support to those with the least, the vital help was rapidly spent on essentials, helping to keep others in jobs.” 

She said that Australia’s income support system should sustain people in tough times and help them find suitable employment, which at just $45 a day, it was not doing.

“The unemployment JobSeeker Payment is not up to the task and the government acknowledged this by almost doubling it,” she said.  

See a full copy of the report here.