• Australia's economy is officially in recession after recording two straight quarters of falling GDP. (AAP)Source: AAP
With the country entering it's first technical recession in decades, NITV News spoke to Dr Francis Markham from the Centre for Aboriginal Economic Policy Research to find out what impact this could have on Indigenous peoples.
Shahni Wellington

5 Sep 2020 - 11:29 PM  UPDATED 7 Sep 2020 - 10:07 AM

A little more than a year ago, the federal government happily forecasted 2019-20 to be the first budget surplus in a decade.

Despite what economic decisions were made between then and now, what also followed was a tumultuous combination of a horror bushfire season and a sweeping coronavirus pandemic.

At a time when unassuming Australians could be reaping the benefits of 'Back in Black,' the federal government has instead declared the national economy is in a recession.

NITV News spoke with Dr Francis Markham from the Centre for Aboriginal Economic Policy Research (CAEPR) at the Australian National University to find out what that means and the impact it could have on Aboriginal people.

What is a recession?

According to the Reserve Bank of Australia, the term recession refers to a period of reduced output and a significant increase in the unemployment rate.

While there is no global definition, Dr Markham said a recession is generally accepted as a temporary decline in in economic activity.

"It's usually defined in Australia as happening for at least half a year, so it basically means a time where generally there's more unemployment, fewer people working in paid jobs," Dr Markham said.

He also describes a recession as two consecutive quarters where gross domestic product (GDP) falls, and that's basically the measure of the market value of everything that's produced in Australia.

The Australian Bureau of Statistics showed on Wednesday that GDP in the second quarter experienced the worst economic fall on record, going backwards by 7 per cent. The quarter previous had fallen by 0.3 per cent. 

The most recent labour data shows more than one million Australians are now out of work, reaching an unemployment rate of 7.5 per cent.

While the reality of these figures is harsh, Dr Francis Markham said our current economic woes are not majorly uncommon. 

"In some ways, this recession is an unusual one in that it's happened so fast," Mr Markham said. 

"Usually it's sort of something that creeps up over a period of time rather than something which is just sort of sprung out of the blue. 

"It can happen for all kinds of reasons - Because of an event or a financial crisis like in the GFC (Global Financial Crisis), they can also happen for structural reasons in the economy, and as we're seeing now - They can happen because of health reasons and a pandemic." 

How will that impact Indigenous peoples?

The failing economy will have a flow-on affect to all communities in some way and there will be both long-term and short-term implications of living through a recession.

There is, of course, the financial hardship of hundreds of thousands of people becoming jobless, income drops, pile ups of bills, mortgage or loan payments and expenses, and businesses going under across the country.

According to Dr Markham, Aboriginal people will also experience added layers of turmoil.

He believes the issue of discrimination becomes much sharper during a recession.

"Many Aboriginal and Torres Strait Islander people are discriminated against in the labour market and during a recession, essentially employers who might discriminate against First Nations people have more scope to do so  because there are just so many people applying for work," Dr Markham explained.

There are also concerns for the long-term implications of that discrimination, and the struggles to re-enter the workforce after the recession.

In Dr Markham's opinion, Indigenous people will also be more likely to lose their job during this time.

"Because of the on-going intergenerational legacy of colonisation and segregation and historical discrimination, even when people are being directly discriminated against, that legacy has meant that for many Aboriginal and Torres Strait Islander people, they might enter the labour market with less education than would otherwise be the case," Dr Markham said.

"And so we see that Aboriginal and Torres Strait Islander people tend to be concentrated in jobs that are less secure, for that reason."

According to the Centre's analysis of recent data on industries that have been most affected by COVID-19 in the short term, around 60 per cent of Aboriginal and Torres Strait Islander workers in those industries are employed on casual contracts rather than on-going contracts.

While there won't be any official data released about Indigenous employment until the 2021 census comes out, Dr Markham is an expert in both Economic Geography and Aboriginal And Torres Strait Islander Policy, and has given his analysis on the current COVID-19 numbers.

Different experiences of recession

During this crisis, the immediate financial impacts of the recession can lead to very different experiences. 

For many people, it will be a really hard time. That's across the board, but particularly for the Indigenous population.

For others, this will be looked back on as a better time in terms of their financial position and their ability to do things like buy food or support their families. 

Australian National University research recently revealed around 650,000 more people are expected to be pushed into poverty when the government COVID-19 support payments are scaled back to pre-pandemic rates.

Dr Markham said this is especially true for Aboriginal and Torres Strait Islander people. 

"In 2018-19, before any of us knew the word 'coronavirus', already a quarter of Indigenous adults were receiving a a Centrelink payment that would make them eligible for the extra $550 a fortnight which was offered from April this year," he said.

"And so for that quarter of the population the coronavirus crisis has meant that their standard of living is actually got probably gone up quite a lot, certainly as individuals and probably for many people as households."

On Tuesday, the government passed legislation that will extend COVID-19 support payments through until March of next year, but the Treasurer will drop the amounts received and change the eligibility standards.

In 2016, income support receipt was lowest in 'Major cities' (45%) and highest in 'Remote and very remote areas' (56%).

Calls to permanently raise the rate of JobSeeker, formerly known as Newstart payment, have gone unheard, and Dr Markham said this will be detrimental for Aboriginal people. 

"If you were relying on these types of social security payments to survive, you're kind of living well below the poverty line," he said.

He describes the shift as the biggest increase to Indigenous incomes that's been seen since non-discriminatory access to employment benefits were introduced.

"Particularly in very remote communities where there's just not many jobs to be had, people's incomes have gone up hugely and for a whole community, probably the income coming into the communities probably gone up by about a quarter," Dr Markham said.

Forty thousand out of work

While there have been temporary financial gains due to the government's response to the pandemic, there have been many Indigenous people who have been left jobless in the aftermath of COVID-19.

Data cited by the Centre for Aboriginal Economic Policy Research shows between February and the end of March this year, the number of Indigenous people receiving a social security payment increased by 40,000.

Dr Markham said that's an increase of about 8 per cent of the Indigenous population.

"There are a very large number of individuals and families who are newly out of a job and for those people, this will be remembered as a very difficult time," he said.

"But the kind of longer-term consequences in terms of unemployment and the real difficulties that we expect many Indigenous people to face getting into employment for the first time or back into employment if they've become unemployed, I think those things will be remembered for many years as a difficult time."

No guide to survival

The median age of an Aboriginal and Torres Strait Islander person is 23 years old, compared to 37.8 years for the non-Indigenous population.

Based on that data, this is the first recession to ever be experienced by a lot of our mob. 

While it's recommended to use this time to up-skill or enrol in tertiary education to improve the chances of finding work in trying times, there is no guide to living through a recession.

According to Dr Markham, the resilience and structure of Aboriginal communities puts us in a better position to survive the financial hardship.

"In many ways, Aboriginal people have been in economic crisis for two centuries and are experts of surviving in difficult times.

"Those kind of community resources of survival and strength, I wouldn't say will make it easier for Indigenous people, but are very strong and real community resources of supporting each other through difficult times," Dr Markham said.

Despite a track record of resilience through oppression spanning hundreds of years, unfortunately there is no clear finish line in sight when it comes to the economy. 

When asked when there'll be an end to the recession, Dr Markham gave a pretty blunt response.

"Nobody knows, anyone who says that they do it's probably fudging," he said.