The Morrison Government’s stimulus package is a welcome set of measures to keep businesses open and put money in the hands of people most likely to spend it. But the package doesn’t do much to help workers who will lose some or all of their incomes in coming weeks and months. The Government must be ready and willing to step in with further assistance for this group when needed.
A lot of people are going to be unable to work over the coming weeks. The steep drop in the number of tourists and international students arriving in Australia has already meant that some people have lost shifts, or seen their work dry up entirely. The ban on non-essential public gatherings will also dent employment.
Many of us should be able to weather the coming economic storm. Australians who are fortunate enough to be able to work from home, or who have paid leave they can draw on when they need it, may get through the economic turbulence relatively unscathed, at least provided our employers stay in business.
But a large number of Australian workers are vulnerable if they can’t work, especially for an extended period. Over a third – around 37 per cent – of Australian workers do not have paid leave entitlements. There are about 12.5 million Australian workers. About 2.4 million of them are casual employees – with no paid sick or annual leave, and no entitlement to ongoing work – and a further 2.2 million are self-employed.
Low-paid workers are much less likely to have paid sick leave than other workers. Among people who earn less than $800 a week, only 46 per cent have paid sick leave. Another 4 per cent are self-employed, and the remaining half are casual workers without paid leave entitlements.
People on this level of income are unlikely to have a lot of savings set aside to see them through periods when their shifts dry up, or they lose their jobs entirely.
Young people are disproportionately likely to be in casual work and not have paid leave. But casual work is not just for young people who are putting themselves through university. More than a quarter of people in their 30s, 40s, and 50s do not have paid sick leave – either because they’re casual workers or they’re self-employed. About 1.5 million parents – which is about a third of all working parents – have no paid leave.
Most workers without paid sick leave are in industries that are especially vulnerable to shutdown. More than 400,000 casual and self-employed people work in cafes and restaurants – an industry that will be hit hard over the coming weeks. Not many of the 20 industries with the largest number of workers without paid leave entitlements are likely to be able to continue as normal over a period of widespread self-isolation.
Australia has a lot of people who are not entitled to paid sick leave. Casual workers, by definition, have no job security – no guarantee of ongoing employment, nor of a certain number of shifts. As businesses close and people avoid public places, many casual workers will lose their jobs, or at least some of their income.
The Government’s stimulus package, quite appropriately, provides support to business to keep the lights on and keep the pay cheques going out to workers over the period ahead. But when people do inevitably lose their jobs, the safety net might not be strong enough to catch them.
The Government will give one-off $750 payments to concession-card holders and people who were on a benefit such as the Age Pension, family payments, or Newstart, as at last Thursday. But if you lose your job tomorrow, you’re out of luck.
More worrying still, people might have to wait a while to get even the regular, meagre level of public assistance. In 2018-19, the typical applicant for Sickness Allowance had to wait 35 days for their claim to be processed – and half of applicants waited longer. The median processing time for Newstart was 15 days. These times could well blow out further if the system is overwhelmed by new applications, and if growing numbers of Centrelink and Services Australia staff have to self-isolate.
It would be very bad for Australia over the coming weeks and months if workers who should isolate themselves decide to keep showing up to work because they are not entitled to paid leave.
Any further stimulus – and more may well be needed – should put this group front and centre.
This post has been updated to correct a minor error. Unfortunately some numbers in the text were from an older version of the Characteristics of Employment survey; the correction does not affect any charts.