BY AMY MCQUIRE, AUGUST 10, 2011
Originally published by Tracker Magazine.
The BasicsCard, used to manage quarantined welfare payments for those living under the NT intervention. Compulsory income management will be rolled out into five disadvantaged centres around Australia from next year.
NATIONAL: Compulsory income management was one of the most controversial – and overtly racist – components of the Northern Territory intervention. Now it’s being rolled out across the country, writes AMY McQUIRE.
What is income management?
Income management is a plank of welfare reform designed to force welfare recipients to spend their social security payments on essential items, in an attempt to promote socially responsible behaviour. It quarantines a percentage of a person’s welfare payment.
This must be spent on priority goods, such as food and basic essentials.
The quarantined income cannot be spent on items such as alcohol, tobacco, or gambling.
Affected welfare recipients are required to use an EFTPOS-like ‘BasicsCard’ at prescribed shops.
There are several types of income management now in operation around the country. They range from child protection income management to voluntary and compulsory income management.
The scheme is administered by Centrelink with the “reforms” falling under the jurisdiction of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA).
Where is income management now in place?
A form of voluntary and compulsory income management has been operating in several Cape York communities since 2002.
It does so under the Family Income Management trial, a part of the Cape York Welfare Reform project.
In July 2007, the Howard government announced it would act on recommendations made by a Cape York Institute report, headed by Aboriginal lawyer Noel Pearson, which proposed welfare reform in four targeted communities on Cape York, with the intention to “restore social norms”.
The trials began in 2008 and involved establishing a Families Responsibilities Commission (FRC).
Welfare recipients are referred to the Commission if they fail to send their children to school, if there are concerns about child protection, or if they breach tenancy agreements. The FRC has the capacity to determine if a person’s income should be managed.
The greatest controversy surrounding income management has been played out since the Commonwealth made it compulsory in 73 Aboriginal communities targeted under the Northern Territory Intervention.
Welfare recipients in these “prescribed areas” are automatically captured by the scheme, regardless of their financial history, past behaviour or whether or not they have children (the intervention was rolled out, in large part, on the basis of assisting children). Fifty percent of welfare payments are quarantined, and, in cases, of lump sum payments, such as the Baby Bonus, higher percentages are often income managed.
The federal government has since announced trials of income management linked to child protection in several sites in Western Australia – including Cannington, Perth and Fremantle – in an attempt to make the legislation which underpins the intervention appear to be less discriminatory.
Income management has also been extended beyond the prescribed Aboriginal communities to the rest of the Northern Territory in a further attempt by the Federal Government to make the intervention comply with the provisions of the Racial Discrimination Act.
The federal government recently announced that voluntary and child protection income management would be rolled out in five disadvantaged centres from next year.
They are Playford (SA), Shepparton (VIC), Bankstown (NSW), Rockhampton (QLD) and Logan (QLD). Income management in these areas will begin on July 1, 2012.
Why the controversy over income management?
Income management is one of the most controversial aspects of the Northern Territory intervention, mainly because of the fact it was compulsory.
This meant that even Aboriginal people who were spending their payments wisely were captured by the policy.
Many have claimed it has demonised them as financially irresponsible. On top of this, there is no clear evidence to show it works. The income management system has also been beset by glitches.
For a time, apartheid style lines formed in supermarkets in the Territory. Aboriginal people were forced to queue in separate lines from other customers to access income managed funds.
People had to travel for hours to buy groceries because their local community stores were ill-equipped for the new system, meaning their expenditure on fuel – just to purchase food – left them much less available income.
There were numerous occasions where the system crashed, with some people unable to access funds over entire weekends. Many of these glitches have been resolved, but there is still a lot of controversy over the nature of income management and the cost of the system.
In the Katherine region, the Sunrise Health Service reported an immediate spike in anaemia rates in children – as high as almost 60 percent – as a direct result of the policy.
A 2008-2009 review of the NT intervention, commissioned by the Rudd government, found a large majority of Aboriginal welfare recipients disliked the system.
92 percent of respondents reported problems getting half their money, 90 percent said they didn’t like the BasicsCards, 86 percent disliked going to Centrelink to get money.
Overall, 91 percent of participants were negative about its impact on their lives. The Western Australian trials have also been criticised due to concerns it will unfairly target Aboriginal welfare recipients and the linking of school attendance to welfare payments. Several welfare groups claimed this would not solve truancy issues while increasing economic hardship for parents.
Is there evidence to support its roll out?
Income management faces considerable opposition because there is no reliable data on its worth.
Federal Indigenous affairs minister Jenny Macklin rejected the NTER review’s recommendation that income management be made voluntary.
While she claims the Federal Government is acting on evidence-based policy she has only been able to offer anecdotal accounts on its benefits to affected Aboriginal families.
The federal government has also claimed income management is supported by a large proportion of affected Aboriginal people.
Earlier this year Macklin told a Senate Estimates Committee hearing the scheme had acted as an incentive to secure jobs or study. She said a number of people had volunteered to go on the scheme. As of February, 1754 of the 16,200 people subject to income management have been moved off it, with 4,650 volunteering to take part in the scheme voluntarily.
“I anticipate that income management will continue to be an incentive for people to participate in work, study or training, as well as supporting parents to take better care for their children,” Ms Macklin said.
“We can see from the number of people volunteering to be on income management that people value it as a useful tool to help manage their money.”
But dissenting reports have been damning. Last year, a Menzies School of Health and Research report which monitored sales in 10 remote NT stores found there was no change in people’s spending on tobacco, that there was no change in spending on vegetables and fruit, and that soft drink sales had actually increased.
The Sunrise Health Service has found anaemia rates in children under five jumped significantly in six months from December 2006 to June 2007 due to a lack of nutrition stemming from compulsory welfare quarantines.
It is clear there is a lack of evidence on both sides of this argument. But the federal government is committed to rolling out this scheme nation-wide despite credible evidence it actually works to improve the well-being of those targeted.