Consumers from diverse communities saw greater hardships during COVID-19 lockdown due to financial stress and poor industry practices, new research claims.

The impact of the COVID-19 pandemic has been devastating across Australia. Whilst job losses and financial instability did not discriminate, consumers from culturally and linguistically diverse (CALD) communities have been disproportionately impacted, according to the Consumer Policy Research Centre (CPRC).

The CPRC analysed economic fallout of COVID-19 with consumers who speak a language other than English at home, compared to English-only speaking households.

The most recent survey results from November and December 2020 show culturally diverse consumers resorted to much higher levels of debt, drawing down on superannuation and accessing emergency relief to meet everyday livings costs such as rent, food, and bills compared to the rest of the nation.

The research found culturally diverse consumers accessed personal loans at rates two times higher than the average, took on high-cost payday loans at rates four times higher and borrowed from friends and family at rates two times higher.

The research also found diverse consumers accessed superannuation early and twice the rate of other Australians and sought emergency assistance at rates four times higher.

“It’s pretty clear from our data this group has really struggled with a shortfall in income, are far more reliant on informal income and capital, and seem to be accruing debts and arrears”, said CPRC Senior Policy and Research Manager Ben Martin-Hobbs.

He said the findings were consistent with other recent research highlighting those in insecure employment – predominately in sectors which were hit the hardest by COVID-19 such as retail, hospitality, aged care, hygiene, construction, and fast food, with day labour arrangements or labour hire contracts – the most severely impacted. 

CPRC CEO Lauren Solomon said that in addition to insecure employment, a lack of inclusive approaches to policy design, delivery of customer service, and the communication of supports was creating a gulf between the experiences of English and non-English speaking communities.

The report said that while state government support mechanisms provided important immediate relief for many culturally diverse students and renters, there were high levels of concern about financial wellbeing persist across the nation.

It said 73 per cent of CALD consumers are still concerned about their financial wellbeing, compared to 56 per cent of the broader population.

“As debts have been accruing with essential service providers, we’ve seen this translate into higher proportions of CALD consumers reach out for help in managing their bills, but they also report significantly more difficulty accessing supports” Mr Martin-Hobbs said.

“Sufficient income clearly must remain at the forefront of the policy response, but we also need to drastically change the way we engage and communicate with diverse communities,” he said.

“Australia is a diverse nation, yet our approach to policymaking and customer service delivery does not reflect this. Our markets and businesses should not be creating further vulnerability and disadvantage in the community. Inclusive practices must be the way forward – our communities and the economy will be all the stronger for it,” Ms Solomon said.