893k under housing affordability stress when JobKeeper ends

Photo Karen Roach
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UNEMPLOYMENT could peak at 1.752 million in 2021 under the most severe of scenarios as government COVID-19 support ends, putting more households under stress, according to the Australian Housing and Urban Research Institute (AHURI).

Researchers from the University of Adelaide and Curtain university have simulated new model scenarios for AHURI examining the likely impacts upon individuals and households of employment and income loss due to COVID-19, and how this will affect their ability to meet household costs.

The study found that total unemployment in 2021 could range from 8.7% to 15.1%, as even under the mildest scenario modelled, unemployment would exceed 1 million people. That is equal with the highest unemployment rate recorded during the pandemic.

Throughout the COVID-19 pandemic, government initiatives JobKeeper, JobSeeker and the Coronavirus supplement kept 474,500 households from living in Housing Affordability Stress (HAS). Contrarily, a complete phasing out of JobKeeper in March of 2021 would tip 124,000 households into HAS, with 73% of those effected being private renters.

Despite this, 103,500 households were in HAS due to COVID-19. Though without these measures the households in HAS would have been almost doubled to more than 1.36 million, even after Commonwealth Rent Assistance.

“The policy concern is that if these highly successful government interventions are withdrawn prematurely, almost a third of those saved from suffering housing affordability stress will now experience it,” said Professor Chris Leishman, lead author of the research.

It is forecasted that without further extensions of the JobKeeper support payment beyond the current end date of March 2021, households living in HAS will increase to at least 793,000 and could reach levels as high as 893,000 households.

If JobKeeper was extended, even with a reduced payment of $650 a fortnight, the baseline of households in HAS below the baseline would be reduced. Coupled with CRA and a national 25% rent relief scheme, the number of HAS cases could be halved.

“Our research shows that the number of households living in a precarious employment and housing affordability situation is already very high,” said Leishman.

“The 2021 scenario modelling shows that CRA is not sufficient to fully mitigate the impacts of an economic downturn in any of the scenarios we examined.

“The COVID-19 pandemic has had a disproportionate impact on younger workers, and those working in less secure public-facing occupations. Lower-income workers and private renters are also disproportionately affected.

“Serious consideration should be given to the development of further support measures that would benefit these households.”

The impacts on employment from COVID-19 have been concentrated in public-facing industries such as the arts, leisure, accommodation and food services, this will likely be be the source of future job losses as well.

In the most severe scenario modelled job losses in accommodation and food services could be up to 31.8%. However, sectors such as electricity, gas, water and waste services could still see growth under this scenario, of 2.1%.

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