Hardship, distress, and resilience: The initial impacts of COVID-19 in Australia

By Professor Nicholas Biddle, Associate Professor Ben Edwards, Professor Matthew Gray & Kate Sollis (ANU Centre for Social Research and Methods)


This paper provides a summary of the impact of COVID-19 on labour market outcomes, income, financial stress, social cohesiveness, political attitudes, subjective wellbeing, and psychological distress. It is based on data from the 33rd ANUpoll which collected information from 3,155 Australians over the period 14-27 April 2020. It is the first longitudinal survey data on the impact of COVID-19 in Australia, with respondents to the April ANUpoll also interviewed in January and February 2020. The findings suggest large declines in employment and income, significant increases in social isolation and psychological distress, changes in household structure, and significant uncertainty about the future. At the same time, we observe greater confidence in government and the public service, large improvements in social trust, and substantial observance of physical distancing measures.

Findings relevant to tax and transfer policy:

  • Average household after-tax weekly income fell from $1,795 in February 2020 to $1,632 in April 2020; a fall of 9.1 per cent.
  • When this household income is converted to a per person income level (i.e., household income divided by adults and children in the household) income fell from $740 per person per week in February to $663 per week in April, a fall of 10.4 per cent. The decline in per person income is larger than the decline in household income because the average household size increased.
  • Based on the decrease in income between February and April continuing for the next 12-months, we estimate a fall in the income of Australian households of $102 billion per annum. While the number of lives saved by the COVID-19 restrictions is not known, modelling by Wilson and Blakely (2020) estimates that under the herd immunity scenario of a 60 per cent infection rate there would have been 134,000 deaths in Australia. If combine these two figures this leads to an estimate of the initial income cost of around $761,000 per life saved.
  • The change in income is not uniform across the income distribution. There was an increase of 33.5 per cent in per person after tax household income for the lowest income decile, and smaller increases for the second and third income deciles. The growth in income at the bottom end are almost certainly due to the increases in government financial assistance to households. There was little change in incomes for deciles 4 and 5 and substantial falls for the higher income deciles with the highest income decile experiencing a 20.0 per cent decrease.
  • There has been a fall in the difference in income between low and high income households, with the ratio of the average income of the 90th percentile (high income) to the 10th percentile (low income) decreasing from 7.2 in February 2020 to 6.2 in April 2020. This is a substantial decline in income inequality.
  • There were larger declines in income for those aged 18 to 24 year and smaller declines for those who lived in the most socioeconomically advantaged neighbourhoods.
  • Despite the falls in income, the proportion of Australians who said that they were finding it difficult or very difficult on their current income decreased from 26.7 per cent in February to 22.8 per cent in April 2020. This is explained by the increases in income at the bottom end of the income distribution.

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