COVID left us poorer, sicker and with a big financial headache, inquiry told

COVID-19 has left Australians with poorer physical and mental health, helped fuel inflation because of too many government handouts and encouraged people into the black economy, the first wide-ranging inquiry into the pandemic has heard.

Businesses, unions, health experts and the education sector have told the inquiry, due to report in weeks, that Australia needs to prepare for future pandemics to avoid repeating mistakes made across all levels of government that are still being felt in some parts of the nation.

The federal COVID-19 inquiry has been told the county has suffered long-term health and economic problems because of the pandemic.Credit: Bianca De Marchi

The inquiry, promised by Anthony Albanese ahead of the 2022 federal election, is being headed by former senior public servant Robyn Kruk plus economist Angela Jackson and infectious diseases expert Professor Catherine Bennett.

Established last year, the 12-month inquiry is due to report by September. It has been given a wide remit to look at joint Commonwealth-state actions, although its terms of reference preclude examining unilateral actions taken by states and territories or international programs.

Across a series of roundtables, the inquiry has been told of major shortcomings with elements of the federal and state governments’ responses to COVID-19 and the long-term problems these have caused.

Health experts said border closures had a “significant” impact on healthcare provision, particularly in rural, remote and border communities, arguing health workers should be exempt from such restrictions.

Australia’s average age fell last year while the country experienced a record number of deaths in 2022.

Chronic disease monitoring and cancer screening were disrupted, the sector said, noting a nationally co-ordinated effort was now required to clear the backlog of tests.

“People are currently waiting longer for care than before the pandemic, are often sicker and [are] finding it less affordable,” the sector said.

Experts said the mental health system was in crisis before the pandemic, and COVID-19 had exacerbated problems that had only worsened since.

“Australian communities are experiencing a process of rolling recoveries from one emergency to the next (extreme weather events and the pandemic), with resulting cumulative trauma,” they told the inquiry.

“More emphasis is needed on community resilience and on strengthening the system ahead of the next emergency.”

This week, the Productivity Commission revealed the cost of the HomeBuilder program, put in place by the Morrison government in 2020 to support the construction sector during the pandemic, had blown out from an estimated cost of $680 million to $2.7 billion.

While the scheme – which gave up to $25,000 to people building a home or renovating an existing property – closed to new applicants in April 2021, delays in the sector mean final paperwork can be submitted until the middle of next year.

House construction costs have soared since the pandemic, partly due to the generous government payments available to home buyers.Credit: Bloomberg

New-dwelling construction costs have been one of the key drivers of inflation since the pandemic, climbing by 30 per cent in Sydney since HomeBuilder was announced. Overall inflation over the same period has lifted by 17.9 per cent.

HomeBuilder was just one of hundreds of programs put in place by all levels of government to support the economy through the pandemic. Total government spending has been estimated at between $150 billion and $200 billion, on top of Reserve Bank measures such as record-low interest rates and quantitative easing worth more than $300 billion.

Economists from academia and the private sector said original government spending was important in supporting households and businesses, but the speed at which it was rolled out meant “compromises” in policy design that should be avoided in future pandemics.

However, the ongoing financial support proved too much for the economy, they said.

“The scale of the initial fiscal and monetary support was likely warranted during a period of uncertainty. However, the winding back of these measures as the pandemic progressed was too slow,” they said.

The small business sector said differences in public health orders between the states and territories caused significant problems for many companies.

This, coupled with confusion over the definition of essential services and essential workers, encouraged some businesses to participate in the black economy.

“The lack of clarity and consistency around important definitions and public health orders resulted in an increase in the number of sole traders operating in the cash economy in some sectors, such as hairdressing,” it told the inquiry.

The ACTU told the inquiry that the eligibility rules around the $90 billion JobKeeper program encouraged some businesses to restructure their operations to qualify. This included standing down workers when not justified.

It said a ready-made package of economic support should be developed that could be instantly activated in the event of another health emergency.

“The time spent to stand up supports during COVID allowed the pandemic to spread further and faster than it might have otherwise. Access should be simple so that people don’t have to apply for different support through different channels,” it said.

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