Who'll be hit hardest by COVID-19 pandemic – and who'll pay for it

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While you’re stuck inside lamenting your loss of freedom, spare a thought for those who’ll be hit hardest by the pandemic.

COVID-19 could be the catalyst for this generation’s Great Depression, says an Australian National University (ANU) health equality expert.

Professor Sharon Friel, Director of the Menzies Centre for Health Governance at ANU, believes the pandemic could have profound long-term health implications for the socially disadvantaged.

The coronavirus won’t discriminate when infecting people, but how Australia’s economic and social services systems respond is very socially patterned, says Prof Friel.

“Poor people, the precariously employed, those with big existing debts, the homeless, people with disabilities, the socially marginalised – these are the vulnerable people who will feel the disastrous effects of this global pandemic most,” she said.

“They will suffer for many, many years to come.”

Prof Friel is worried the equality gap will widen further as a result of the pandemic.

“COVID-19 will have significant impacts on health inequities in Australia through the economic and social fallout resulting from necessary pandemic mitigation measures compounding an already inequitable society,” wrote Prof Friel with the VicHealth CEO Dr Sandro Demaio in an article for the Medical Journal of Australia.

“The existing embedded inequities in the social determinants of health will amplify the COVID-19 response effects, exposing socially disadvantaged groups even more. Fourteen per cent of Australians already live in poverty, and income inequities have widened.”

While Prof Friel applauded the government’s increased JobSeeker payments in response to the coronavirus pandemic, she argued that the jobless should not lose this benefit afterwards.

“This extra cash in the pockets of the unemployed should be a mainstay of public policy, not just a temporary fix for the dire economic situation the country finds itself in,” she said.

Professor Friel and Dr Demaio also say the health sector has a vital role to play now and in future.

“An analysis of 266 health policies showed that while the rhetoric of the social determinants of health abounds in governments’ health policies, medical care and individualised behavioural change strategies continue to be privileged during implementation,” they wrote.

“These policies matter, of course, but they will not prevent massive health inequities. The health sector must engage in policy discussions about welfare, labour markets, housing and infrastructure, to name a few.

“COVID-19 may end up being this generation’s Great Depression. The determinants of health, and how they are distributed, should be our guiding measure of a successful Australia as we rebuild from COVID-19.”

While the poor and disadvantaged may be hardest hit by the pandemic, another ANU professor says it will be young people who’ll foot the bill for the government’s economic response to the COVID-19 crisis.

Leading economist Professor Robert Breunig, who heads up the ANU’s Tax and Transfer Policy Institute believes Australia’s tax system will mean young people bear rthe economic burden for the pandemic stimulus packages, adding that this crisis may end up increasing inter-generational inequality.

“This inequality will be exacerbated by our tax system settings,” said Prof Breunig.

“The massive government spend of at least $330 billion to counter the economic shock of COVID-19 will have to be paid for by young people. The design of Australia’ tax system has pre-determined this outcome.

“Our heavy reliance on direct taxation—activities by corporations or individuals—means that the tax burden to repay the debt will fall very heavily on the future incomes of young people, which will now be lower as a consequence of the pandemic.

“In addition, governments’ economic responses to crises like COVID-19 favour protecting people’s assets and their value. This includes the family home and shares.

“This is fine for people with assets. But in the main young people don’t have these assets and if their parents don’t have these assets, they can’t even look forward to inheriting them. And so they are the ones who will be left with the bill.”

Prof Breunig is calling for urgent policy fixes and has proposed a number of solutions to make the tax system fairer, one of which would be increasing GST.

“This has the extra benefit of taxing people’s accumulated wealth as they spend it,” he said.

“We should also switch from stamp duty to land tax to better capture the value of increased asset prices and make it easier for people to buy and sell houses.

“Another option is to include owner-occupied housing in the asset test for the age pension and introduce a government-run reverse-mortgage program to help people to spend their assets while alive.

“And we should reduce corporate and personal rates while removing many of the exemptions that allow people to avoid paying their fair share of tax.”

These policies, when implemented with others, should stimulate more economic growth and reduce house prices in Australia.

“Both of these are good things for young people,” he said.

“By tapping into accumulated wealth, these policies will also help to redistribute the financial burden of this pandemic across society more equally – this benefits everyone and especially young people.”

Are you worried the pandemic will lead to a depression? Are you in the group that will be hit hardest by this crisis? What do you think of Prof Breunig’s ideas for paying the bill for the government’s response to COVID-19?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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60 Comments

Total Comments: 60
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    “Are you worried the pandemic will lead to a depression? Are you in the group that will be hit hardest by this crisis? What do you think of Prof Breunig’s ideas for paying the bill for the government’s response to COVID-19?”

    No, I have faith in the financial advisers to the government who have been working on the fiscal side of the COVID-19 pandemic as well as the medical experts working on the infectious side. It won’t be easy and there will be some pain but I believe we will come out of this pandemic healthy and bruised but not beaten. We don’t appear to be in the group hit hardest by this pandemic but we may have to do some belt tightening.

    Because we live in a free market democratic society, there will be those who are well off and on the other end of the spectrum there will be those who will be doing it tough. Reading what the good Professor has proposed smacks to me of socialism or, to use another term, communism. The way I read his theory is that people who have accumulated wealth are to lose a good proportion of their wealth to give it to those who don’t have a lot and I can’t support that theory at all.

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      Couldn’t agree more. The socialist push comes surging through with every academic opinion on Your Life Choices. If this site made a submission to government on any issue affecting older people, it would likely be socialist-biased.

      I feel utterly gutted about what’s happening to our young people. For many years I’ve been unable to weep away various sadnesses, but this time the flood gates regularly open. It’s heartbreaking for every age category, but particularly our young. No-one escapes. The upside may be that with the predictable decline in real estate values, our young people will get a better chance in the home-ownership market.

      This is the best opportunity to ditch our culturally cringeworthy belief that we have to give huge sums to countries that have never improved their quality of life as a result of recurring massive financial gifts from western democracies. The virus is teaching us that our dependence on China has to cease forthwith. It’s teaching us to be cleaner and to value our interaction with others.

      We do not help the poor by tearing down the rich who are the financial risk-takers, the business people who employ the majority of Australians, and they should be respected for their entrepreneurship and talents. The only people getting their real wage right now are public servants. Teachers have put themselves on extended fully paid holidays (who else gets a guaranteed total of 3 months per annum paid annual leave?) when thousands of others have gone broke. The education system has been permitted to evolve into a socialist breeding ground.

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      I agree, I don’t agree with all the doom sayers.
      In fact, the knowledge that this is going to cost a lot is the very reason that all will have to change their way of thinking, the government will have no choice. I still wonder who all this money has to be paid back too, I have said if its international banking organisations, the money they lend must be from individuals and business’ and industry depositing money for investments or for savings or doing all sorts of business.
      So to me, the planet may have to leave calling in debts in some instances behind, because the actual money lent to our governments through international banking organisations, was probably the publics money anyway, Plus taxes.

      Of course, banks do invest and make money for dividend-paying for all those who use banks all over the world.
      But basically those international money lenders and gigantically wealthy institutions,
      ALL STARTED WITH OTHER PEOPLES MONEY.

      Manipulation of the interest rate and the stock market, caused the great depression, manipulating and mistake making cause recessions, they won’t let another one happen like that, because, the whole world as we hear incessantly and get told we’re in this together!!!!

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      Yes it will be mostly the younger generation paying off the debts of this pandemic like we oldies had to pay off the debts of WW2. Those today under 55 had a relative easier ride but them’s the breaks. My parents’ generation shouldered the mess from WW1. Maybe we just had it too good for a while?

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      Horace, someone will have to pay that’s for sure and it won’t be us oldies. While I can agree with most of your post equating socialism with communism is totalling misleading and meant to capitalise on peoples prejudices. To be more accurate I suggest you substitute “smacks to me of socialism or, to use another term, communism” with “smacks to me of socialism or, to use another term, Christianity”. Christianity is an almost forgotten religious cult, rarely practiced nowadays, where rich people are encouraged to look after the poor, almost the exact opposite of capitalism or free market economy.

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    I have been impacted by Covid-19. I have been diagnosed with Prostate cancer and have been informed that cancer surgery is now classed as elective becasue of the pandemic. Seems there are alternative treatments so hopefully that will work.

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      Hopefully talk about lifting some restrictions will enable elective surgery if that’s required. Not all prostate cancer requires surgery – my uncle has it for 15+ years, without surgery. Alternatives are often best for many types of cancer these days.

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      good luck with the alternate treatment Snowflake. I am in remission with prostate cancer after radio and hormone therapy which are far less invasive than surgery and have less detrimental effect than you probably would get post surgery. keep positive as the alternative treatments have a good success rate.

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      I wish you tons and tons of luck. But if its a slow-moving prostate cancer, I believe that there are other ways for it to be treated . Sometimes you have lots of time .

      But I am not a Doctor, I have had ongoing problems in that area, and have read a ton of stuff on it.

      But once again GOOD LUCK GIVE IT A GOOD KICKING! Stay well. And your op will come.

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      Snowflake there are many treatments for PC nowadays as an alternative to surgery, but it all depends on your Gleason Score and your own preferences. I presume you have had a long discussion with your Urologist or, even better, a Urology Nurse. I suggest you Google ‘Prostrate Cancer Support Group’ for a local PCSG to get some reassurance.

  3. 0
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    SEND THE BILL TO BLOODY china…………………..

  4. 0
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    So once again it is proposed as a possibility to include our home in the assets test and then maybe a reverse mortgage. So after many years struggling paying off our debt and bringing up our family it will now count against us and our family. We had hoped to leave our home to our family so they could afford to buy their own homes. Seems to me that the tighter you live to pay off debt, have a roof over your head and provide for your family The harder it will be. Would they prefer we all live in subsidied public housing and just spend our money throughout life instead of trying to provide our own home.

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      yes I also worked hard, at one time working 2 jobs, struggled to pay off all debt, contributed to my super before it became compulsory, set up my nest egg with an accumulation of shares and purchased a rental. Now I can’t get any support from the current taxpayers because I’ve been too thrifty and taxes are way too high. My heart bleeds for you.

  5. 0
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    Typical of what one would expect from another socialist/communist parasite living off university money. Double the handouts for the habitual long term dole bludgers and our so-called refugees who will never work a day in their lives, take money from those who have accumulated any wealth because they actually worked to better themselves and also screw over the pensioners by finding ways to further reduce any entitlements.

    • 0
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      Well, well This a first for me on these columns. I agree with all the above comments.
      In particular; leave us, bloody pensioners, alone, At age 91, I worked very hard long hours often 7 days per week for every penny I have. Any money that I have saved is from diligently being careful shopping. Plus the fact at my age I must consider eventually moving into a care facility that will eat up most of my savings and the sale of my Unit from which I will lose 30% exit fee.

    • 0
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      I looked up Professor Sharon Friel’s credentials and she is a very well educated person although something caught my eye. In January 2010 she was awarded an Australian Research Council Future Fellowship to investigate the interface between health equity, social determinants and climate change. I wonder if her hypothesis is based on selfishness based around getting more funding. One would hope that funding for climate change would take a back seat to free up more funds for getting Australians back into work and stimulating the economy.

  6. 0
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    Well bloody well excuse me, I am so sick to death of the companies that rape and pillage our natural resources, gas, oil , Iron Ore, coal, gold and all the others and pay no roylaties or tax to the country. Yes our country..

    A legion of Accountants are employed to allow these to not pay tax & the govt allows this rort of the Australian People…

    We own these assets…… The arab countries dont let this happen so why should we.

    • 0
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      Arab countries have different systems overall. Try to get the dole or the pension in one of them. You might not like the politicians here, have a look at their rulers, Sheiks and Princes. We are only paying all these monies to overseas countries because we are called the free world. I have lived in places where no foreign aid was ever given but not much to the local population either.

    • 0
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      The Australian mining industry paid $185 billion in federal company tax and state and territory royalties between 2005-06 and 2015-16, according to a report produced by Deloitte Access Economics, The Deloitte report said that if you add in royalties to company tax, miners paid an effective tax rate of 51 per cent

    • 0
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      185 Billion is just like me giving you $2.00….. in the scheme of things chump change, and thats what we are getting for all our natural resources.

    • 0
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      Try to get the dole or the pension in one of them.

      It appears you dont need too as everything is so damn cheap….

    • 0
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      If you are so clever Panos, why are you on welfare?

  7. 0
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    If we didn’t import everything from China and people in Australia were to make things there wouldn’t be so many people unemployed. I was touring Australia and wanted to by a Australian gift, I could not find one gift made in Australia, they were all made in China. I didn’t buy anything. It doesn’t take a professor to tell us the poor will get poorer etc. Ive been finding depression all my life, covid 19 as made no difference, just hope we can learn by our mistakes. Governments doing ok as long as he puts the people first and not greed. Agree Briss send these comments to government or your local mp.

  8. 0
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    Homeless will be just that, nothing to take from them other than less space to occupy.
    Make room for more Homeless, the Poor that have very little to live off/pay rent.
    There is a Moratorium on Evictions, not a no rent free kick. This is going to be Very Challenging for some.
    Christmas has past and the “Christmas Cringe” credit card has to be paid. No way of paying as no income for now or future.
    The landscape has Change Dramatically.

  9. 0
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    I’m not too concerned. Resistance to change, inertia particularly among pollies and historical data all point to little or no change in the short to medium term. Look back to the GFC. What’s changed? Has the stock market reformed itself? No. Have the bloated salary packages and bonuses paid to top executives changed? No. Has the self interest of all pollies of all political parties changed? No. Why would anyone think that our tax system will undergo radical reform just because a virus is causing financial havoc in our economy? Oh, please …get real. What political party is going to offend any group when we are in a recession/depression? No Morrison, not Albanese, for sure. Their focus will be on winning the 2022 election and to do that they will need the greypower vote more than ever. Maybe reform the GST … perhaps.

    • 0
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      Reform the GST, What a funny way of saying ‘Increase the GST’? OK, I can see 15% on everything, no exemption for fresh food, like it is in the rest of the Globe, possibly even higher alcohol and tobacco levies. In my old place in Europe it’s 2.5% for necessities and 8.5% for things you want. Some places in the EU go up to 23%. Do we want that? Do we have a say in it? It will be a decision handed down like “you will work till 67” from now on. No referendum

  10. 0
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    I’m not sure how this mob will try to recover after the pandemic is over. One thing for sure though is they will blame the pandemic for the recession not their lack of policies. A government cant keep reducing tax and keep giving welfare to the wealthy. While at the time point to the unemployed for not trying harder and maintaining new-start at the introductory level. The jobs were not there Australia’s unemployment level was nearly at a record low thanks to Australia’s record growth over the past 23 years (thanks to PK).
    One of the financial advisors put the recovery at increasing income tax by $2 a week and the debt would be repaid in two years.
    At the moment slow mo and his mob are trying to reduce workers rights at a very inappropriate time. Haven’t seen or herd from the employment minister since hi gaff about centre link. Strange? Cant wait to read Malcolm’s book about this sleazy right wing party of petty bigoted Christians.

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      Turnbull’s book, happy reading, ab2. Another left leaning billionaire with money on the Caymans. His book will be full of sour grapes because the nation did not want him and his Republican Movement is on the wane.

    • 0
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      Just wondering, 4b2, whether you are going to pay full price for Malcolm’s book, or wait a week or two and pick it up for a few dollars at the discount counter?

    • 0
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      Mariner, Turnbull was not voted out. His own party turfed him in a very dishonourable manner. Republican? This is Australia. I think you are a little confused.
      Interest rate is so low that repayment will not be as bad as what people think.
      Also, the economy is not all about taxes.

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