Stimulus Shields Australian Economy, but not in Recovery until Unemployment falls

It is a major achievement that Australia’s economy has been protected by the severe impacts of the global financial crisis, ACOSS has said in a submission to the Senate Inquiry into the Government’s economic stimulus initiatives.

ACOSS has called for two vital adjustments to the stimulus program to ensure Australians without jobs or secure housing are protected from the worst effects of the downturn.

“Given the severity of the financial crisis and the slowdown in international growth, it is a remarkable achievement that Australia has avoided higher levels of unemployment,” said Clare Martin, CEO, Australian Council of Social Service.

Evidence points to the cushioning effect the stimulus measures have had on the Australian economy and unemployment rates. A recent OECD report estimates that 150,000 to 200,000 jobs were ‘saved’ as a result of the stimulus measures.

“Australia will not be in recovery until unemployment has decreased. There has been a 40% rise in joblessness from the lowest level achieved during the boom and this figure is likely to keep rising for at least another six months,” said Clare Martin.

“To prevent long term joblessness and entrenched social disadvantage ACOSS has recommended the stimulus be adjusted to tackle two vital social problems – prolonged unemployment and a critical shortage of affordable housing.”

“A quarter of future expenditure of the $650 million Jobs Fund should be allocated to assist unemployed Australians who have looking for work for over a year. To improve their jobs prospects, they would be engaged them in paid temporary employment in projects of local community benefit.”

“The need for affordable housing remains critical. ACOSS strongly supports the social housing element of the stimulus package and calls for the $750 million which was cut from the social housing stimulus budget to be reinstated, or committed to a future affordable housing growth fund. The $750 million could have generated an additional 2600 affordable housing dwellings.”

Download the submission here.

Media Contact: Clare Cameron, ACOSS – 0419 626 155