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In the classic tale of Superman, mild-mannered Daily Planet journalist Clark Kent lives an otherwise pedestrian life, despite the activities of his superhero alter-ego Superman.
As Australia’s economic recovery from the pandemic continues to unfold, in some ways it’s a lot like the relationship between Clark Kent and Superman.
On some days the economy is like Superman, rocketing through the sky. One example of this was the recent ABS unemployment figures, in which the labour market shocked analysts as unemployment dropped from 6.4 per cent to just 5.8 per cent.
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On other days it’s more like a groggy Clark Kent slowly recovering from an encounter with some kryptonite.
A recent report from the University of Melbourne provides a snapshot of an Australia that shows we’re struggling.
According to the Taking the Pulse of the Nation survey, 31 per cent of respondents are experiencing financial stress, which is defined as difficulty paying for essential goods and services. A further 26 per cent say they are just “making ends meet”.
With many Australians facing a challenging time of things, the current environment is also impacting their mental health. In recent weeks, 24 per cent of respondents say they have felt anxious or depressed “most of the time”.
This represents a record high for the survey. Despite the fact that the fortnightly study is only 11 months old, its respondents are struggling more with their mental health now than they were when we were in the middle of lockdowns and coronavirus restrictions.
Self-employed Australians report the highest level of financial and mental distress. 50 per cent say they are struggling to pay for the essentials and 15 per cent are only just making “ends meet”, with 47 per cent saying they are mentally distressed.
To say these figures are concerning would be understatement. If they are within several ballparks of being representative of the broader public, it could be argued that many Australian households find themselves still deeply mired in crisis.
Despite the hopeful message of a recovery from the Morrison Government and the strong ABS labour force figures, it’s clear that many Australians are struggling even now while billions of dollars a month in government support is still in place.
For regions where a high number of households are reliant on continued government support, the conclusion of JobKeeper and the JobSeeker supplement on March 31 may end up being kryptonite to household confidence and consumer spending.
Yet, despite these disturbing figures and around three million people still being supported by the payments, the Westpac consumer confidence index and the NAB businesses confidence index are both near decade highs.
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The nation’s households have amassed a war chest of well over $130 billion savings since the pandemic began. However, it’s likely that these savings are concentrated heavily in the hands of Australia’s more well-off households.
According to data from research firm Digital Finance Analytics, 36.5 per cent of households have little to no savings to fall back on. It varies quite widely from state to state, with only 26.2 per cent of households in the ACT holding little to no savings and rising to 47.5 per cent in South Australia.
If the nations more well-off households spend their share of the more than $130 billion in pandemic-driven savings, we may see quite a boom for areas based on that type of consumption and the more affluent areas that usually host those businesses.
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But that may prove to be cold comfort for the millions of households who reside in areas where the benefits of the more affluent spending may amount to precious little.
After March 31, the Morrison Government is relying on households and businesses spending their savings in order to replace government support measures as the driver of the economy.
In the words of Treasurer Josh Frydenberg: “This money (household and business savings) will help underpin our economic recovery and avoid a fiscal cliff as some of the support measures start to taper off.”
With more affluent households holding the lion’s share of the nation’s savings, it’s effectively a national recovery heavily underpinned by Ronald Reagan and Margaret Thatcher’s favourite economic ideology – trickledown economics.
Despite widespread criticism of the policy by academics and economists globally, as it stands it is a key element of the Morrison Government’s economic recovery plan.
As we head into an uncertain future, it is possible Australia may have two very different economic recoveries simultaneously.
In one recovery, parts of the economy emerge from the phone booth like Superman, as affluent areas experience the boom that consumer and business confidence indexes are expecting.
In the other, much of the rest of the economy is far more like Clark Kent after a run-in with some kryptonite, with already struggling households facing an even more challenging time, as the social safety net reverts to pre-COVID levels of support.
Perhaps the economy will find a way to fire on all cylinders as the Australian people put their faith in a better tomorrow.
But if that hope doesn’t come to pass, the millions of households that may be struggling with their finances or their mental health face an even greater challenge than they already do.
Tarric Brooker is a freelance journalist and social commentator | @AvidCommentator
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