Income management in the Northern Territory: racism is still the issue

The Evaluating New Income Management in the Northern Territory: First Evaluation Report was publicly released last week, four months after it was submitted to the government. The report’s findings vindicate those who have campaigned to stop compulsory income management.
Income management quarantines 50–70 percent of a Centrelink recipients’ income. This is most often held on a ‘BasicsCard’ that can only be spent on approved essential items.

The interim report was commissioned by FaHCSIA and completed by researchers from the Australian National University, Australian Institute of Family Studies and the Social Policy Research Centre at the University of New South Wales.

It surveyed 818 people subject to compulsory income management. A clear majority believe that overall, compulsory income management has not improved their lives or has made things harder for them. Those surveyed who want to stay on income management, or would ‘recommend income management to others’ are in the minority – even if you count the 4,100 on so called ‘voluntary income management’.

More than two-thirds of people say that income management is discriminatory. Similar numbers report feelings of embarrassment arising from income management, and three quarters feel it is unfair. The ‘voluntary income management’ stream also remains discriminatory in its operation.

But Minister Jenny Macklin’s farcical press statement makes no reference to these findings and simply asserts ‘the model is non-discriminatory’.

Macklin’s statement also ignores the central finding of the evaluation: that ‘there is not strong evidence that, at this stage, the program has had a major impact on outcomes overall’. Instead, the statement grabs at shards of ‘evidence’ and presents them out of context.

The minister quotes the evaluation’s finding that ‘there was a statistically significant perception of an improvement in ability to afford food’. But she omits the following sentence from the report: ‘[however] relative to the control group there was no reduction in the extent to which they reported running out of food’.

The report demonstrates that many income management participants appreciate having access to a well resourced money management system: in particular, the existence of a secure account and free facilities for EFT and checking account balance.

Aboriginal organisations have been demanding such financial services for years, and there is simply no reason that they should be attached to punitive income management.

Income management has been touted by the Labor government as a means to ‘break welfare dependency’ and encourage people into the workforce. The primary reason given for the identification of five income management ‘trial sites’ across Australia, including Bankstown in Sydney Rockhampton and Logan in Queensland, Playford in South Australia and Shepparton in Victoria, was that these are areas with large numbers of people on social security. But the evaluation found that income management has had no impact whatsoever on whether people exit the social security system. On the contrary, it expresses concerns that for some participants, ‘it may encourage passivity and a loss of self-reliance in the longer term’.

With income management failing in its stated goals, the researchers were tellingly prohibited from examining its costs or conducting a ‘cost benefit analysis’. FaHCSIA has requested this wait until the conclusion of the evaluation in 2014.

Earlier reports show more than half a billion dollars has been spent on this program in the NT. By the end of 2014, more than one billion will have been spent Australia-wide. The estimated administrative cost per person per week is $80. For each of the many thousands of Aboriginal people who have been income managed against their will for five years, it has cost the government between $25–30,000.

I have interviewed people on income management who have no running water and dirt floors. They are told that their local councils and Community Development Employment Programs, which used to provide limited services and opportunities, are ‘economically unviable’. Not so the government programs that control how they spend their meager income.

Without shame, Minister Macklin has used the release of this evaluation to announce an expansion of income management. Across the NT, in the APY Lands in South Australia and in the five new ‘trial sites’, young people coming out of prison, or with an ‘unable to live at home’ status with Centrelink, will be compulsorily income managed from July 2013. There is not even an attempt to use any findings from the 350 page report to justify this decision.

Same old racism

The initial roll-out of income management in Aboriginal communities ‘prescribed’ by the Intervention required the suspension of the Racial Discrimination Act. Minister Jenny Macklin claimed to have restored the Act in 2009. References to ‘prescribed areas’ on Aboriginal land were removed from the provisions of the legislation that enables compulsory income management. Now, rather than named Aboriginal communities, the whole of the Northern Territory has been declared an ‘income management area’.

By October 2011, 1,466 non-Indigenous people, including many migrants, were on income management. Most fiercely resent this. Only 20 percent of non-Indigenous people surveyed want to stay on it.

But the inclusion of other marginalised groups has not changed the fundamental nature of the oppression suffered by Aboriginal people in the Northern Territory under income management.

Of the Aboriginal people who were put on income management under the explicitly discriminatory phase of the NTER, and who are still receiving social security payments, only 16 percent have exited income management.

Of people on income management in the NT, 91 percent are Aboriginal. But three quarters of all exemptions are given to non-Indigenous people. The chance of an Indigenous person in a ‘prescribed area’ having a formal exemption from income management is 1.4 percent.

Only 22 percent of Indigenous people who live in ‘prescribed areas’ targeted by the NTER responded that they ‘never’ felt discriminated against by income management.

The report provides no analysis of the broader impact this may be having. But in the same week the evaluation came out, the annual Indigenous Social Justice Report of the Human Rights Commission was also released.

The Social Justice Report provides careful study of the connection between policies which discriminate and disempower and the social crises that are becoming ever more acute in the NT. Commissioner Mick Gooda said:

To leave people feeling like they have no control over their lives has a real human impact as highlighted in the Northern Territory in the last 5 years. We know from national and international research that disempowerment results in ill health and even increased suicide rates.

Reported rates of attempted suicide and self-harm have increased five fold since the NTER and the rate of actual suicide amongst Aboriginal youth increased 160 percent.

The ‘Native Affairs Branch’ goes electronic

Since 2010 every transaction undertaken by people spending ‘income managed funds’ has been recorded for analysis, providing the evaluation with comprehensive breakdowns of the shops people are visiting and their patterns of expenditure.

An overriding theme in Aboriginal opposition the NT Intervention has been that the government had refashioned the old systems of surveillance and control that operated when their lives were ruled by the Native Affairs Branch.

After the frontier massacres and the herding of Aboriginal people into reserves and pastoral servitude through the first half of the twentieth century, they were not to be trusted with money. Missionaries, police, pastoral barons and government officials distributed rations, or allowances – dribs and drabs of cash.

In the 1950s, reformers within Native Affairs moved to make their activities appear ‘race neutral’. The Aboriginals Ordinance became the Welfare Ordinance in 1953 and the Native Affairs Branch, with itss network of protectors stretched across the NT, was renamed the Welfare Branch.

In theory, any unfortunate citizen in need of ‘tutelage’ and protection could be made a ‘ward’ under the act. The legislation made no reference to race. But the regulations solely targeted Aboriginal people and the ongoing reality was apartheid.

The stated aim was to refashion Aboriginal lifestyles to mirror those of white Australia. Once this assimilation was complete, the Welfare Branch believed, Aboriginal people would be ready for citizenship. But in the mean time you had to be cruel to be kind.

Income management provides the old colonial relationship with flash new technology.

Centrelink staff are being used as the frontline of this new armory of racialised control. When surveyed, 79 percent of Centrelink staff agreed that income management was a ‘punitive tool’. But frighteningly, 85 percent said it had improved child health and wellbeing: ‘overall it appeared that Centrelink staff viewed income management as having a greater impact of children’s wellbeing than the socio-emotional wellbeing of adults’.

Now ask yourself how the vast majority of Centrelink staff, who work in call centres or manage payments in the office, could know anything about the welfare of other people’s children, let alone their development under income management?

Punishing Aboriginal people to save their children has been a major theme in Australia’s history. This is precisely the paternalistic and assimilationist attitude that income management demands of those workers who are being asked to administer and promote the system.

One ‘money management service provider’ told the researchers:

It’s not just like tailoring people’s finances but paving their whole lifestyles, from home right through … it’s going to probably take generations and a lot of consistency to change.

Voluntary income management?

For generations, Aboriginal people and their community organisations have been calling for greater support with banking and money management.

Before the Intervention, there were upwards of a thousand people participating in a supermarket voucher system with the Tangentyere Council servicing Alice Springs town camps, operating on a shoestring budget.

It comes as no surprise, then, that very large numbers of Indigenous people surveyed want a both the secure account and the electronic transfer facilities that have come with income management.

A positive about income management for many people was the provision of a ‘free banking’ service through the BasicsCard. This was particularly the case in remote areas, where checking your bank account balance at the local ATM can cost upwards of $2.50 per transaction.

Some 50 percent of Indigenous people from ‘prescribed areas’ agreed that ‘managing your money’ had become easier with the technology and support available through income management.

This finding was not uniform. For both Indigenous and non-Indigenous people caught in the system since 2010, less than a quarter reported improvements in money management. And satisfaction with financial management is consistently accompanied by serious concerns about loss of control.

Amongst Indigenous people on voluntary income management, a clear majority reported feeling that the control they have over their money had not improved or, in fact, had been diminished. This ‘voluntary’ cohort reported close to the same level of feeling of embarrassment, discrimination and unfairness as those on the compulsory measure.

The provisions around ‘voluntary income management’ retain a punitive character. Once on the system, you cannot exit for thirteen weeks. A $250 incentive payment is distributed to ‘volunteers’, but only after they stay on for six months.

In 2010, I wrote a piece for Crikey documenting a visit to Centrelink with a number of elderly Aboriginal women who wanted to exit income management, as was their right as pensioners under the new system. They were refused access to interpreters and talked down by Centrelink staff who insisted they needed a BasicsCard.

Similarly, many Indigenous representative and service organisations argued to the researchers that some of their clients on ‘voluntary income management’ had not been given a proper choice.

This was backed up by an extraordinary finding in the surveys. Only 25 percent of Indigenous people on ‘voluntary income management’ reported that they had been asked to go onto the system.

Under the genuinely voluntary Centrepay system, which existed long before income management, people remain in control of the proportion of their money that goes to bills or food, and they can exit the system at any time.

Very significantly, despite their enthusiasm for income management, 56 percent of Centrelink workers told researchers that Centrepay could be ‘just as effective’ in providing improvements in financial management. The provision of a secure account and free banking does not require income management laws that suspend people’s rights. Clearly if non-punitive financial tools such as Centrepay were given support to flourish there would be no need for income management.

But even more pressing is the need to resource opportunities that can alleviate crippling poverty, chronic substance abuse and family violence that continue to dominate the lives of so many Aboriginal people. The reason many Aboriginal people want a ‘secure account’ is to give them a small patch of certainly amid the torments of life on the margins of Australian society.

This suffering has its roots in systematic racism against Aboriginal people. The Australian political system is far more committed to demonisation and control than providing opportunities for advancement. The energy and money the Labor government is putting into entrenching income management is one of the clearest examples of this.

Macklin has to go

Jenny Macklin must resign as Minister for Aboriginal Affairs. This policy is racist and she knows it. Aboriginal people living on income management have been telling her this her entire term.

Their resistance has now won support from a strong coalition including peak social welfare, trade union, and ethnic community bodies. The NSW ALP passed a resolution calling for an end to the policy at their conference in July this year.

Opponents of Stronger Futures laws include the Peak Aboriginal Organisations of the NT, The Arab Council Australia and the Catholic and Uniting Church.

The Public Sector Association (PSA NSW) has placed industrial bans on the implementation of income management by child protection workers.

These bans need to spread. The government may be refusing to listen to evidence. But public sector workers can refuse to implement flagrant breaches of human rights.

‘Stronger Futures’ legislation, which legalises discrimination against Aboriginal people, must be repealed immediately.

Padraic Gibson

Padraic Gibson is an Historian at the Jumbunna Institute for Indigenous Education and Research, UTS and a socialist active in campaigns for Aboriginal rights.

More by Padraic Gibson ›

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  1. When is the word ‘sorry’ going to translate into the ‘sorry’ that must come from the heart…The sorry that is supported by action and support.
    Is there a political party willing to support the human rights of our indigenous brothers and sisters?
    There is a lot of quality research being carried out by passionate and professional people. Yet the political response does not reflect the needs of so many desperate people

  2. I am a white Australian male with no dependents who lives in the Northern Territory. I have been placed on the Basics Card, mandatory because I have been classed as long term unemployed. It doesn’t take into account that I have been long term unemployed due to having 2 bulging discs in my back, 1 extruded, meaning the disc burst and the inner jelly has leaked out into my spine. If that wasn’t enough, last December I had part of a lung removed due to lung cancer and now have a thyroid problem. It takes none of this into account. I’m not disabled enough for DSP. Once your income is managed, it’s pretty hard to give your kids money for school lunch or the ice cream man etc. Income management was originally brought in with the Intervention on Aboriginal people, in which to do this, John Howard suspended the racial discrimination act. Absolutely disgusting! Because the Basics Card is discrimination. Discrimination based on where you live. If it was across the board to all unemployed, that would be fair enough but it’s not.

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