The novel coronavirus pandemic ushered in a new climate of uncertainty, wrecking virtually all global economies in unprecedented ways.
Australia, for instance, has been on the receiving end of the COVID-19 whip, which has left many in dire need of financial help.
The country—which was the only major economy to avoid the 2008 global financial crisis— witnessed its first recession in thirty years, thanks to COVID-19. Today, major cities in Australia, including Sydney, are still in lockdown, one year after the pandemic first hit.
The pandemic, and the subsequent economic and social lockdowns, have left many Australians in financial hardships. According to a recent survey from the Australian Bureau of Statistics (ABS), 1 in 3 Australians are financially worse off due to the pandemic.
And this brings us to the question; How are Australians coping financially with lockdowns? Keep reading to find out.
1. Swarming for Short-Term Loans
Many Australian households have had a change in income due to the restrictions resulting from COVID-19 and the subsequent lockdowns. In a recent Life During COVID-19 Survey, 30% of respondents reported a reduction in their income.
When asked what actions they had taken to mitigate the impact of COVID-19, over 60% of respondents said they had taken at least one of these actions:
- Applied for a short-term loan or new credit card
- Asked for help from welfare or community organizations
- Cut down on spending
- Asked for financial support from friends or family
- Requested for a pause on rent or mortgage payments
The financial stress imposed by COVID-19 has driven people to borrow more, with some opting for same-day loans. These loans have become very popular in Australia due to their convenience and fast approval rate.
2. Cutting Down on Spending
The most common action taken by Australians in response to the ongoing lockdowns was to cut down on non-essential spending.
The Life During COVID-19 Survey report revealed that over 80% of those who have experienced income reduction have at least:
- Cut down on essential items such as grocery
- Asked for cheaper rates on utilities and delivery costs
- Don’t go out for meals
Many people reported dipping into funds reserved for emergency or other services, with many using their savings to cover their daily expenses.
3. Relying on Government Financial Aid
With millions of Australians locked down across three states, many are unable to work and provide for their families. The federal and state governments are offering financial assistance through a range of programs, as outlined below.
The COVID Disaster Payments
This program is accessible to those in the federally declared hotspots who have lost work due to the COVID-19 pandemic and the resulting lockdowns.
Workers who have lost between 8 and 20 hours of work are eligible for disaster payments, amounting to $375 and $600, respectively. To qualify for this program, you must be an Australian resident who has lost income and doesn’t have any paid leave entitlements.
Pandemic Leave Disaster Payment
This program offers $1,500 to those who cannot work because they have been directed by a health official to self-isolate or quarantine as a result of COVID-19.
COVID-19 Business Support Grants
As of July 2021, the S. Australian government is offering grants to support thousands of small businesses that have suffered a significant loss due to the pandemic-imposed lockdowns. Grants of $3,000 are available for eligible employing businesses and $1,000 for non-employing businesses.
To qualify for the COVID-19 Business Support grant, a business must have a turnover of at least $75,000. Additionally, it must prove that the turnover declined by more than 30% in the week commencing 20th July 2021 due to the COVID-19 imposed restrictions.
Wrapping Up: It’s Not All Doom and Groom
The COVID-19 pandemic has put Australia on a standstill, with more than half of Australia’s near 26 million population in lockdown due to an outbreak of the highly infectious delta variance. However, the future looks positive as the regulatory bodies work hard to help those who have been hit hard and lift the lockdowns.