The Australian government’s coronavirus economic stimulus measures saved almost 500,000 families from the risk of losing their homes, research has found.
Modelling released by the University of Adelaide on Thursday found that the number of households in “devastating” home affordability or mortgage stress would have doubled if not for government JobKeeper and JobSeeker payments.
The government spent more than 100 billion Australian dollars (736.4 million U.S. dollars) on the JobKeeper scheme, which entitled Australians who lost work as a result of the pandemic to payments worth up to 1,500 AUD (1,104.6 USD) per fortnight, and more than 15 billion AUD (11 billion USD) on the coronavirus supplement, which doubled the value of JobSeeker unemployment payments to 550 AUD (405 USD) per week.
“Without government intervention, Australian households in housing affordability stress (HAS) would have nearly doubled,” Chris Leishman, the lead author of the report, wrote.
“The JobKeeper and JobSeeker interventions reduced the incidence of housing affordability stress by a considerable amount: 861,500 households compared to 1,336,000 without the intervention.”
However, he warned that in a worse case scenario where a vaccine is not available early in 2021 unemployment could grow to more than 1.75 million and another 124,000 homeowners could go into HAS as the government phases out the payments.
HAS is defined as people in the bottom 40 percent of income earners who spend more than 30 percent of their income on their mortgage or rent.
“The policy concern is that if these highly successful government interventions are withdrawn prematurely, almost a third of those saved from suffering housing affordability stress will now experience it,” Leishman said.
The report noted that as JobKeeper moves through its later phases, HAS gradually rises by a further 62,000 to 124,000 and more than 70 percent of these households are private renters.
“The 2021 scenario modelling shows that Commonwealth Rental Assistance is not sufficient to fully mitigate the impacts of an economic downturn in any of the scenarios examined and households in HAS rise from the baseline 757,000 to at least 797,000 to 893,000,” it said.