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Eva Cox 5-2-10

Eva Cox, Women for Wik - 5 February 2010

Crikey Blog - Pushing bad policy against the evidence

The nasty maternalistic state

Sole parents and the unemployed beware! Jenny Macklin is trying to take half your income away. From July in the NT, and 2011 for the rest of the country, she wants to implement the most drastic change to our social security system ever. And almost nobody knows about it. She is expecting support from the very conservative Opposition front bench to have the legislation passed quickly so she can impose these new measures as soon as possible despite almost universal opposition from a wide range of groups.

If she succeeds, those on most payments, except age and disability payments, for more than 12 months will have half their income restricted on a plastic card, usable in certain shops and confined to approved items. While these exclusions are currently cigarettes and alcohol, the government is looking for new systems that will report the bar codes of all items bought. Presumably chocolate biscuits and soft drink could soon be added and all sorts prescriptive lists of what's acceptable. These controls will be placed on all eligible recipients, in low income post codes initially, not just those who have shown themselves to be bad parents or even are parents. This undermines one of her justifications and will shame the majority of sole parents and unemployed people who are capable of managing their meagre funds very responsibly.

This 'income management' program is being touted by Macklin with excessive irrelevant hyperbole, as shown in her recent speech at the Social Inclusion conference last month:

'Over time, a new income management system will be rolled out nationally aimed at fostering individual responsibility; providing a platform for people to move up and out of welfare dependence and to tackle the destructive, intergenerational cycle of passive welfare.' She goes on to say 'Income management can help people regain control over their lives - rebuilding financial capacity where this capacity has been broken down by addiction or when lives spin out of control.'

Where is the evidence that most recipients of income support are affected by addiction or are involved in intergenerational passive welfare? Why does she assume that lack of financial control is fixed by excessive external control? The changes will affect thousands of people who manage their already too limited income well. They will not be able to buy bargains, go to markets or buy second hand if not from approved shops. Potential recipients include those who have lost their jobs in the GFC shakeout, people without adequate English skills to find work, older people who cannot find jobs, sole parents dealing well with solo parenting and others whose lack of workforce attachment has a myriad of reasons, none of which are about personal problems. Gaining exemptions from quarantining will require their proving competence so the assumptions is guilt until the recipient can prove innocence eg by having to ask your child's school for evidence of your child's attendance. How embarrassing!

The Greens set up a Senate Inquiry on the legislation that started hearings this month. There are 35 submissions so far (Feb 3) including ACOSS, Anglicare, St Vincent de Paul and NAPCAN, which deals with child abuse, NONE of the submissions support the proposed changes. This is very significant as most of these named agencies are not the usual suspects and generally support government initiatives.

All the submissions are critical of the way data was used and outline problems if the program is expanded as planned. Some recognise the need for income management but only for those who have shown themselves to be disordered and incompetent money managers; all oppose strongly a universal expansion. Most say the extra money that has been allocated for the expensive administration (about $4,000 pa per recipient) would be better spent on services or income for recipients. Interestingly, there is only one submission from a group representing immigrants who will find the new program particularly hard, which suggests these sectors are not aware and have not been consulted.

The Macklin claims for the effectiveness of the program are based on the supposed good results of Income Management, imposed on 73 Aboriginal communities as part of the emergency response. I have looked closely at the so-called evidence, as have most submissions and there are serious doubts whether the NT program has had an overall positive effect on the communities and individuals involved. There are questions on the validity of the data the government is using and the gaps of no data. No attempts were made to measure the ill effects that the process may have had. There is no international research that shows the good effect of such controls. Imposing such constraints on people's lives has not been shown anywhere to be of benefit while loss of self esteem and sense of control is known to be damaging.

There are other problems, apart from the $80 per week per person administrative costs, such as the lack of support services, cultural damages and the undermining of existing programs and relationships. The defence of the program is that some like it, but this does not justify retaining and expanding a program, even if there were some limited benefits for a few groups to a national program for all. It has had problems in the often isolated and very stressed NT communities, so why would it transfer into other areas, cities and the diversity of groups these hold?

No one in government appears to have looked at the whole picture, relying instead on both a few items of inadequate research data and their versions of the contents of some very shonky consultation processes to tout the program's success. The main rationale for the extension of the program appears to be to get the government off the hook as they promised to reinstate the suspended Racial Discrimination Act. This is illustrated by Macklin's statement this week that the Greens needed to realise that delaying the bill was the same as delaying her attempts to make the NT income-management system compliant with the RDA.

Equality can be positive or negative: raising Indigenous rights to equal non Indigenous ones has benefits but reducing the rights of non Indigenous welfare recipients to match the injustices affecting Indigenous people is not on! This is not the equality we need to see nor is it in the spirit of UN conventions. This move must be stopped before it creates futile misery for many income recipients!

Notes and other bits

There are some simple rules about evaluating a program such as income management and whether it is working. It is useful to have some data on what the situation was before the new program was introduced, but if not possible, to at least identify what the problems are and what the expectations for the program.

Income quarantining was introduced without any such identification of the actual changes that were being sought by controlling 50% of Centrelink income. The shock horror of the report on possible sexual abuse was the primary trigger, and some other accounts in the initial report of parental neglect may have contributed. The assumptions behind the original income control mechanism and subsequent maintenance of it were unsupported beliefs that most community problems arose because of irresponsible spending on money on porn, alcohol, and other purchases that did not benefit children.

Where was the evidence for this? Yes, some families may have mis-spent money, but how much of the social chaos was related to just this part of their lives? Would stopping such spending fix other problems? If the concern was children why stop everyone else from controlling their money?

The arguments in this area for controlling spending are very strange. They seem to echo some long gone preaching about money being the root of all evil, and therefore causal for poor parenting, addiction, boredom, lack of skills, poor housing, bad schooling and the rest. Ergo, removing control over half the families' income would immediately increase y people's ability to take responsibility for themselves and others.

Macklin's speech at the social inclusion conference showed some of the confusion in explaining her extension of the program more widely:

Over time, a new income management system will be rolled out nationally aimed at fostering individual responsibility; providing a platform for people to move up and out of welfare dependence and to tackle the destructive, intergenerational cycle of passive welfare.

This legislation is not without controversy. However I believe it is a fundamentally important reform. Governments cannot shy away from taking difficult but necessary reform decisions. Income management can help people regain control over their lives - rebuilding financial capacity where this capacity has been broken down by addiction or when lives spin out of control. These reforms reflect the Government's determination to put the safety, health and wellbeing of children and families at the centre of our welfare reform agenda.

What evidence was there that most people in the territory areas selected were either addicted or had their lives spinning out of control? There were some that may have fitted the description, but how would these be necessarily helped by Income Quaranting without other forms of assistance? Maybe one of Macklin's earlier statements indicates the over-arching importance she seems to gives to this factor in her policy portfolio and therefore the expenditure she is willing to put into the administration of such controls.

'Financial inclusion goes hand in hand with social inclusion which is why financial independence is critical. We need new approaches that go beyond immediate assistance to promote capacity and build confidence in managing money. We need to give people not only the financial resources to participate but the opportunities and capabilities they need to build their own financial security'

The costs are not inconsiderable. The government's own figures are that the extension of the program to the rest of the NT, including non Indigenous families, will cost. The only justification for such administrative costs would be clear evidence that the program was working so well, the costs would be justifiable. This evidence is not available. The somewhat low key ACOSS plus statement released just before Xmas can't really find any justification for the extension of the program as shown in the quotes below from the joint ACOSS media release.

'The Government has committed $352 million over 4 years to income management in the Northern Territory and estimates that it will affect 20,000 people. On average, this represents $17,600 per person over 4 years or $4400 per person per annum, one third of the single rate of Newstart Allowance

'3. The lack of an evidence base for the policy

The proposed changes lack an evidence base. The evidence that is available on income management in the Northern Territory is limited, of questionable quality and shows very mixed results. While the Government has cited evidence of increased sales in fresh fruit and vegetables in income managed communities, there is little quantitative data available on purchasing patterns or changes in health and wellbeing.

The evidence that is available is mixed, for example, suggesting that sales of cigarettes have remained unchanged, despite being prohibited goods under income management. It is also difficult to isolate the effects of income management from other NTER measures. Evidence from welfare trials overseas and in Australia shows that case management is the key factor in improving outcomes rather than income management, for example in increasing school attendance.'

They go on, quite strongly, to state their strong objections to the extension (but not necessarily its original introduction as part of the NTER)

By extending income management to all long-term recipients of certain payments, with limited grounds for exemption, the Government appears to assume that young people, long-term unemployed people and sole parents on income support payments are either unable or unwilling to manage their finances and care for their dependants. This is an unfounded and discriminatory assumption. It is also humiliating for parents to be forced to prove that their children are enrolled in and attending school and that there are 'no indications of financial vulnerability' in order to obtain exemptions from income management. No evidence has been presented to justify these assumptions. Nor has the Government sought to address the inadequacy of income support payments, which is a major cause of poverty and deprivation among these groups.

The only analysis that fits these strange policy decisions is that the Federal government views most forms of social disadvantage as individual/family based, not structural or in any way caused by flaws in our social structure. Their proposals, under most of the social inclusion banner, are designed to work with individuals, who may have been unlucky or maybe who have not made good use of available resources. This view is echoed in the recently released social inclusion report, which adds locational issues but suggests the remedies for exclusion rests with the individuals or family units and the role of the state is to offer benevolent tough paternalistic control.

Reproduced with the kind permission of Eva Cox.