Gender Impacts of COVID-19: Budget update
Before the COVID-19 pandemic, the gender pay gap had narrowed to a record low and women’s participation in the workforce was at its highest level. That welcome progress is now at risk in a post-coronavirus environment. It is critical for a fast and sustainable recovery and that the labour potential of the whole population is fully leveraged.
The impacts of COVID-19 are experienced differently depending on gender. The effects on women have been changing over the course of the pandemic. In the early stages of the pandemic, the employment figures pointed to a ‘pink recession’ as the paid hours worked by women fell by more than half that of men, with women cutting back their hours by 11.5 percent compared to 7.5 percent for men.
The most recent Labour Force data (last week) found that hours worked increased more for females (5.0 per cent) than males (3.3 per cent) over the month – however hours worked for females were still around 7.3 per cent below March, compared to 6.5 per cent for males. The loss of employment remains relatively balanced between genders, with around 4 percent less male and female workers today compared to 12 months ago.
According to today’s Economic Update the employment-to-population ratio and the participation rate declined more significantly for women than for men in the June quarter. The significant fall in female participation moderated the rise in the measured unemployment rate for women.
The JobKeeper review found that young people and women have been disproportionally affected by the current downturn. Compared with pre-Coronavirus employment females are slightly over-represented in JobKeeper coverage. The review found that 47.1 percent of employees receiving JobKeeper were female, compared to 44.9 percent in private sector employment.
JobKeeper 2.0 is a welcome measure to support women during the pandemic given they make up a greater share of employment in the sectors most heavily affected by virus containment measures.
The Economic Update today outlines the $312 million cost of the Early Childhood Education and Care Relief Package which provided ‘free childcare’. This measure is partially offset from CCS that would otherwise have been paid in a non-COVID-19 environment with regular child care attendance.
While families will continue to be supported through the pandemic by easing the Child Care Subsidy activity test requirements and ensuring childcare fees remain at their pre-COVID-19 levels, the Government may need to consider providing further support to the sector if families choose to keep their children at home while self-isolating or withdrawing their children altogether. This would be in line with JobKeeper and its continuation until March 2021.
Early Access to Super
Data from the ATO in May indicated that men are withdrawing on average 40 percent more in super than women – however, the government has not yet completed a full distributional analysis of the impact on women’s super. We would be concerned if younger women were disproportionately accessing their entire super fund balance, as has been reported by some funds. There are also long-established factors in the super system which disadvantage women.
The Economic Update outlines $150 million in support for Australians at risk of domestic, family and sexual violence during the COVID-19 pandemic and further support to help protect victims of family violence in family law proceedings. This funding is welcome and supports the movement towards the fundamental right for women to feel safe in their homes and respected in their workplaces.
Other gender measures for recovery
The Prime Minister noted in his address to CEDA on 15 June that the government needed to maintain a key focus on its women’s economic security statement, which would get a refresh. While not included in today’s Economic Statement, we would welcome the refresh of this statement ahead of the October budget.
While the data now indicates a slightly more balanced impact between the genders, women have still been disproportionately impacted through increased levels of non-paid care work by taking up most of the additional burden that has come about due to home schooling and caring responsibilities. There is a real risk that the progress made in female participation may be eroded as high workforce disincentive rates and fewer work hours available make it an unviable option for women with caring responsibilities to increase their paid work hours.
The extension of the JobKeeper program, funding for domestic violence and the Early Childhood Education and Care Relief Package have provided significant support for women impacted by the pandemic.
We would encourage the government to monitor super withdrawals under the early access to super scheme and conduct a full distributional analysis to better understand any unintended consequences of the scheme.
Other measures that the government could continue to support to ensure the crisis and recovery doesn’t disadvantage women includes investing in gender-disaggregated data including the ABS Time Use Survey and the continued focus on longer term structural changes including reviewing inequities in the super system, such as the paid parental scheme; and reviewing the affordability of childcare as a key element to a strong and sustainable Australian economy.