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COVID-19 has set in motion an economic tsunami that will exacerbate mental health distress, domestic violence, homelessness and child neglect across NSW.

That is the disturbing finding from a new report from Equity Economics, A wave of disadvantage across NSW: Impact of the COVID-19 recession.

The expert report was commissioned by NSW peak social services bodies, and examines five areas impacted by disadvantage: housing, domestic violence, child protection, mental health, and education.

The report models the impact of rising unemployment by June 2021 when JobKeeper has ceased and if JobSeeker returns to its previous rate. It looks at how this will affect progress with key targets set out in the NSW Premier’s Priorities. Findings include:

  • Areas with the highest levels of unemployment by June 2021 include Newcastle and Lake Macquarie (12.3 per cent), Coffs Harbour – Grafton (12.2 per cent), Sydney – City and Inner South (11 per cent) and Sydney – Parramatta and Sydney – Blacktown (10.6 per cent).
  • The number of 20-24 year olds in NSW experiencing high or very high mental distress will increase by up to 16.8 per cent.
  • Higher unemployment alone will lead to rates of domestic violence increasing by up to 5.5 per cent in some regions of NSW, with COVID-19 lockdowns already having caused alarming spikes in reports to police.
  • More than 9,000 more people in NSW will be homeless – a rise of 24.0 per cent in the homeless population. Some regions will see a 40.5 per cent increase in homelessness.
  • The number of NSW families experiencing housing stress will increase by more than 88,000 or 24.3 per cent.
  • There will be 27,447 more children at risk of neglect across NSW, a 24.5 per cent rise due to increased unemployment.
  • Mean NAPLAN scores in Year 9 maths will fall by 23.5 points (3.5 per cent) in 2021 compared to 2019, with some areas improving and other areas, including those with a high proportion of Aboriginal and Torres Strait Islander students falling more than 6 per cent.

The report also examines how the community sector in NSW is responding to the increase in demand for services, finding the need for critical intervention increasing significantly.

NCOSS CEO, Joanna Quilty said the report provides a stark warning to the NSW Government of what can occur without intervention to stem rising disadvantage, strengthen the community services sector, and lift the productive capacity of the NSW economy.

“The Premier’s Priorities are aimed at breaking the cycle of disadvantage. But the modelling shows that rising unemployment threatens to undermine progress to date and send us backwards unless action is taken. Those in our state who were already vulnerable will be most hurt, while others will face precarious circumstances for the first time. Urgent intervention is required,” Ms Quilty said.

“Addressing disadvantage before it becomes entrenched will ensure that children, young people, families and communities can get the support they need to get through this recession. It will be less costly and will ensure that the long-term negative impacts of the economic crisis are minimised.

“The community services sector has risen to the task but faces a challenging future to meet rising demand. With the right policies we can support those most at risk and rebuild our state to lift all citizens up.”

Community Housing Industry Association NSW CEO, Mark Degotardi said the report highlighted the need for urgent investment in social housing.

“The large increases in housing stress and homelessness should sound alarm bells for the NSW Government.  Tens of thousands of NSW families in housing stress need the Government to make urgent and significant investments in social housing,” Mr Degotardi said.

Youth Action CEO, Kate Munro said the report demonstrates the significant impact COVID-19 is having on young people in NSW.

“This report highlights that the already precarious circumstances facing young people pre-pandemic are likely to become protracted and exacerbated if immediate support is not provided by the State and Federal Governments,” Ms Munro said.

“COVID-19 risks furthering the inequities faced by young people in NSW. The educational divide between high-SES and low-SES schools and students, alongside the compounding impact of unemployment, mental distress and risk of harm, emphasises the essential role of the sector in limiting growth in disadvantage.”

Homelessness NSW CEO, Katherine McKernan said a greater focus on supporting homelessness services was needed.

“Homelessness services in NSW were providing support to 27% more clients than funded for even before the bushfires and the COVID-19 pandemic, yet despite being absolutely essential are currently facing funding uncertainty and cuts to their Commonwealth funding,” Ms McKernan said.

“If NSW is to prevent the likely 9,000 additional people experiencing homelessness from the economic impacts of COVID-19 then we need concerted investment in social housing and additional funding for homelessness services, which will also have the positive effect of retaining jobs in both the construction and community services industry.”

Interim CEO of Domestic Violence NSW, Delia Donovan said: “The report clearly highlights the drastic implications of a COVID-19 on families all across NSW. Addressing rising rates of domestic violence through investing into early intervention and adequate resourcing is fundamental.

“The impact and consequences cannot be ignored - lives will be lost unless urgent action is taken. We need to act now.”

Shelter NSW CEO, John Engeler urged the NSW Government to invest in social housing and homelessness services.

“Building or buying social housing, in the suburbs, town and regions with rising unemployment will save construction jobs and support those struggling with the basics,” Mr Engeler said.

“We also call on the NSW Government to immediately implement the Covid19 Rental Hardship Fund (passed by the NSW Parliament in May 2020).  Implementation would provide immediate support to renters who have suffered significant loss of income due to Covid-19 and take the pressure off landlords who may also be struggling.

“This report serves as an early warning for the NSW Government. Time is running out, but there is still a big opportunity to protect people from this oncoming wave of disadvantage.”

To access the report, visit here.

Media contact: Nick Trainor (NCOSS) 0407 078 138