An inclusive response to the financial impacts of COVID-19
In a report published last week, Dr. Jeremiah Brown, Assoc. Prof Gemma Carey, and Dr. Jack Noone from the Centre for Social Impact, UNSW, provide an overview of the impact of the pandemic on the financial wellbeing of Australians, and explain the key elements of the government response so far.
The report provides a context for understanding the changes to the JobKeeper and JobSeeker payments that will take effect when the current period of the scheme ends in late September.
The report highlights that as we transition from a public health crisis towards an economic one, it is important to consider the principles that underpin our recovery. Those principles can be informative about who is included in the recovery, and how they should be included.
From the report:
“Principle based solutions focus on achieving a particular social aim or outcome, and consequently, are more adaptable. They aren’t developed with a specific mechanism in mind, and so adjustment to mechanisms to ensure the policy goal is achieved is less of an issue. Principle based approaches aren’t perfect –there can be disagreement about what a principle means, and therefore challenges with properly translating that principle into a policy that reflects the principle. But they can be an effective way to create solutions that aren’t bogged down in complex targeting mechanisms, and which are clear in the way that they apply to everyone.
The government’s current approach to the crisis has been hinged around the question: ‘What does the government need to do to support the economy until it can ‘go back to normal’? This framing is problem focused, and has resulted in a response designed to keep people attached to businesses by keeping them on the payroll where possible. The emphasis on keeping people attached to business is evident in the increased rate of payment to those on JobKeeper when compared with JobSeeker.
However, there are some issues with the way the government has framed the problem, and as a result the policies they have presented as a solution and the mechanisms through which they operate.
[…] A principled approach could have been based on a principle like leaving no one behind. This would have focused on protecting the most vulnerable members of the community, or households likely to become vulnerable, as a priority and building responses from there. While the overall policy has protected many of those left vulnerable by the lockdown, there are some groups who have been left out of support–like temporary visa holders.
A significant feature of the current measures is that they are temporary. While that alone is not an issue, it is important to be clear about the looming fiscal cliff that is approaching as we move closer to the initial date that they are scheduled to finish. The temporary nature of the changes means that for many relief is only short-term, with concerns about what happens when we get to the end of September.”
Content moderator: Kathryn Snow