Coronavirus risks widening intergenerational wealth divide

Economists are leading a debate about whether now is the time to start rolling back social distancing restrictions in Australia, given rapidly falling new infection rates for COVID-19 and mounting economic and social costs of the widespread shutdown. Research by ANZ senior economist Catherine Birch, based on ABS data, shows that three of the six industries that have slashed staff hours the most due to COVID-19 are hospitality, retail, and arts and recreation, which collectively employ 45 per cent of young people compared to 27 per cent of all other age groups. Youth still suffering post-global financial crisis Not only that, but Ms Birch points out that young workers were already doing worse than everyone else: while general unemployment pre-COVID-19 was around 1 percentage point higher than before the global financial crisis in 2008, youth unemployment remained 3 percentage points higher. Youth underemployment was even worse — at 18.2 per cent, it was more than double the level of any other age group before the COVID-19 crisis struck. The same could be said for winding back negative gearing, the 50 per cent discount on capital gains tax for long-held investment properties and tax advantages from superannuation and trusts used by many wealthy people to protect the inheritance they leave for their children.