The Sydney suburbs hardest hit financially by COVID-19 crisis
The COVID-19 Financial Impact Index developed by Taylor Fry, an analytics and actuarial consulting firm, shows the demographic character of these suburbs left them disproportionately exposed to income losses relative to pre-pandemic levels.
But it revealed average incomes in much of Sydney’s west have been less affected overall because suburbs in that region have a higher proportion of retirees and a larger relative share of low-income earners for whom government subsidies replaced a greater proportion of any lost income.
Alan Greenfield, principal at Taylor Fry, said that while many Australians have been affected financially by the pandemic in one way or another, some low-income earners and those on government payments may have experienced a short-term rise in income due to schemes like JobKeeper and JobSeeker.
The index’s finding that Sydney’s inner-south has been badly affected by the economic disruption caused by the pandemic was reflected by a separate study published last month by consultancy SGS Economics and Planning.
It forecast the economic output of both the Sydney City Council area and the Bayside Council area, which includes Sydney airport, to contract by between 10 per cent and 12.5 per cent this financial year. This compares to a forecast 6.5 per cent decline nationally.
Mr Greenfield said the suburbs most financially impacted by COVID-19 tended to have a higher proportion of middle-to-high income earners and a lower share of retired or unemployed people relative to the state average. That left them more susceptible to the sudden increase in unemployment or underemployment caused by the pandemic.
“Inner suburbs are populated by young professionals who are either renting or paying off a mortgage,” Mr Greenfield said. “When a drop in income hits it’s a real challenge to adjust expenses accordingly. The bills still have to be paid.”
The financial impact index uses the latest industry and employment-related data published by the Bureau of Statistics in combination with the most recent census information to identify the financial effects of the crisis by postcode.
As well as drawing attention to hard-hit inner-city suburbs, it shows regional areas with a heavy reliance on tourism have been acutely affected by the coronavirus crisis.
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Matt Wade is a senior economics writer at The Sydney Morning Herald.