By Joe Montero
Covid-19 is making people sick, and worse. Some are dying. This will have a lasting impact on our community. On top of this, people are suffering the effect it is having on their standard of living, and this is set to get worse.
A lot has been said about the cost to the economy and the uncertain time it faces in the future. But to consider this apart form the human cost is morally wrong, and even wrong from a strictly economic point of view.
Dealing with the human cost must be the top priority. Only though this, can Australia heal properly, and create the best means for Australia to pull together towards social and economic health.
The extent of the cost of Covi-19 and the response is starting to come out. Incomes have fallen. The cost of food and other necessities has gone up, and for many, housing affordability is set to become an even greater challenge than it was before
Parts of the stimulus packages did help. But they have been far from being sufficient to prevent a worsening position for a large part of the population.
So many have been thrown out of work and a considerable but yet unknown proportion, will not have a job to go back to. Businesses have closed their doors and thousands of them will not reopen. Many people are finding it harder to make ends meet. And it stands to get worse in the period ahead.
Large businesses are in a much better position, either because they have the resources to tide them over or have the capacity to pass to cost onto others.
The supermarket chains are a case in point. Panic buying and hoarding created shortages. It hasn’t only been only toilet paper. Other necessities have been affected. The supermarkets used this as an opportunity to hike up prices. Enough to cause some people to accuse them of price gauging, and the evidence seems to fit the accusation.
For instance, I found broccoli to have hit $15 a kilo. This wasn’t the only price rise, way above what anybody would consider reasonable.
The usual excuse given, is that this is how the market operates. It’s a question of supply and demand they say. The truth is, the Australian retail market for basic food and household items, is one of the most monopolised in the world. Three supermarket chains control most of it. This means they can operate as a kind of cartel, exercising substantial control over prices.
It has been in their power to contribute to the pandemic fighting effort, by holding done prices. They chose not to do so.
To get the full picture, we must realise that It’s not only the virus that has caused shortages and price hikes. The devastation from the bushfires shortly before Covid-19 hit, was already beginning to make its own impact, sending prices for fruit, vegetables and cereal products up by up to 6.8 percent, according to the Australian Bureaux of Statistics (ABS).
Put it together, and prices have risen more than 20 times the rise in the Consumer Price Index (CPI).
As the latest report form Anglicare in relation to housing affordability shows, we came into this Covid-19 period, with a large number of Australians living in what can be considered housing cost related poverty.
Although the temporary doubling of some Centrelink payments has helped those who were lucky enough to get them, the housing affordability problem is set to become even worse. Age pensioners and those on disability did not get this, and it amounts to about 1.5 million Australians, who do not even enjoy the temporary relief.
While it is true, that the pandemic has pulled down housing prices and slowed the rise of rents, many have found that they have less disposable income to cope.
Mortgage lenders and landlords have been prevented from pushing people out of their homes for now, which is good from the mortgagee and tenant’s point of view. But what happens when these blocks are lifted?
As money owed accumulates with not enough income coming in, a new debt crisis is building. How many are going to find that they face losing their home?
Dealing with the human cost means applying measures like a guaranteed minimum income, an amnesty on Covid-19 related housing debt, suitable rent control, and the outlawing of monopoly and cartel related price gauging.