Coronavirus pandemic’s impact on household budgets laid bare in new postcode data
The cuts to JobKeeper and JobSeeker payments in late September had an “instant and dramatic” impact on the finances of Australian households, according to new figures from analytics consultancy Taylor Fry.
It says job numbers fell by 1.6 per cent in the two weeks following the reduction in the payments, while total salaries paid across the country fell by 5 per cent according to the Australian Bureau of Statistics.
“Some households are back to where they were in the first month or two of the pandemic, in terms of income and uncertainty,” said Taylor Fry principal Alan Greenfield.
“Some businesses that no longer qualify for JobKeeper have not recovered enough to keep their staff employed. A much larger number of Australians have seen their incomes drop by at least $300 a fortnight.
“That means that 5 million Australians will have more than $4 billion less in their hip pocket every month, which should have an impact on spending habits,” he said.
Taylor Fry has been tracking the financial impact of the pandemic in every Australian postcode since March by analysing employment, income, and population data, to gauge whether people have enough of a financial buffer to weather the crisis.
Unsurprisingly, it shows Victoria has been the hardest hit — with 286 postcodes in the “extreme” range, compared to just 7 in NSW, Queensland, and Tasmania, and 51 in South Australia and Western Australia.
Zoom in on our interactive map to see how Victorian postcodes scored:
JobKeeper was keeping food on Ross Jansz’s table
One of those postcodes is Pakenham in Melbourne’s outer east, where mechanic Ross Jansz has owned his repair garage for 17 years.
He said his business was going through the hardest financial time he had ever experienced — worse than the 2008 global financial crisis.
“People haven’t been driving their cars because they haven’t been allowed to go anywhere,” he said.
Mr Jansz had three employees, but let go of two in March when the pandemic hit — and has continued with one worker part-time since then.
He’s deeply worried about the next cut to JobKeeper looming in January, of $100 a week.
“The Government needs to keep JobKeeper where it is now until life comes back to Melbourne,” he said.
“JobKeeper is the only thing keeping food on my table and paying my bills. If business doesn’t pick up, I’ll have to find a job working for someone else. If there are any jobs out there.”
JobKeeper is a ‘trap’ for some businesses in Victoria
Mr Greenfield said the hardest-hit industries include construction, hospitality, arts and recreation, transport and rental, hiring and real-estate services.
He said the JobKeeper cuts have created something of a trap for some businesses, especially in Victoria, where restrictions still apply to opening hours and customer numbers.
“They may have too much revenue to qualify for JobKeeper, but not enough to keep their usual number of staff employed,” Mr Greenfield said.
There are some surprises in the data — such as the severe impact on incomes and employment in inner Melbourne ‘hipster’ suburbs around Brunswick, St Kilda, and Abbotsford — heavily geared toward the hospitality, retail, and entertainment industries, and also desirable places to live for the young people who work in them.
There’s also an unusually large cluster of severely affected postcodes in western Victoria, stretching from the weekend playgrounds of Lorne and Anglesea, to the Great Ocean Road and the Grampians, which have been starved of local and international tourists.
Coronavirus laid bare economic vulnerabilities
Other clusters are less surprising — such as the ring around Melbourne’s urban fringe, where new suburbs have been springing up to meet population growth, and people have stretched themselves to the limit chasing the dream of home ownership.
“Coronavirus has highlighted pressures that were already there in the economy,” said Danielle Wood, CEO of the Grattan Institute.
“We know that people who were underemployed, often with small savings, were already living close to the line. They’ve partly been able to survive because of JobKeeper and JobSeeker. But as those supports transition off, I think those vulnerabilities will be laid bare,” she said.
Likewise, there’s been a less severe impact in Melbourne’s leafy eastern suburbs, like Surrey Hills and Canterbury — home to a high proportion of professionals who held onto their jobs working from home.
They’ve kept businesses like Canterbury food store owner Leanne Bennet so busy, she never needed JobKeeper.
But she said it had been tough for friends in other business like gyms and hotels.
“We feel blessed that we’ve been able to continue,” she said.
“But when we looked out and saw lots of the other shops closed, and it was just desolation in the streets … you feel for people, and you see the pain in their eyes. You want it to end.”
Ms Wood said the stark difference between Victoria and other states like NSW and Queensland is perhaps an encouraging sign.
“We see that activity comes back. We see that the jobs come back. Maybe not as fast as all of us would like, but I think Victoria can expect to be on a similar trajectory now that we’ve started to lose some restrictions and get the situation under control.”
But Pakenham mechanic Ross Jansz said it will be slow going.
“It all comes down to confidence and people ready to spend money again. I haven’t seen any sign of that yet out here.”