Government that ignores evidence sets up welfare policies to fail

In the seven years since the Northern Territory Intervention, a large body of evidence has been built up showing few if any benefits from compulsory - as distinct from voluntary - income management. AAP/Terry Trewin

The mess of federal budget negotiations has taken over the limited space for social policy debates. However, we are due to get final reports on a range of inquiries. These include the McClure report on social security, which will take into account Andrew Forrest’s Creating Parity report on Indigenous welfare and employment.

The report will trigger major changes to income-support programs, so any input from related evaluations may have considerable impact. One of the ideas being touted, particularly by Forrest, but also mentioned by Social Security Minister Kevin Andrews, is the extension of some forms of income management.

A range of pilot programs have run in various parts of Australia. However, these and the Northern Territory model show few if any clear benefits, despite extensive evaluations of controls on the spending rights of income recipients.

Push to extend income controls is on

The debate is on, as indicated by coverage of two new reports just posted on the Department of Social Services website. These are already being misinterpreted by the minister and misreported as offering encouragement to expand the program:

Social Services Minister Kevin Andrews welcomed the findings of the reports, which he said proved income management was helping individuals and families to budget better and stabilise their lives. ‘The reports found that the vast majority of people who volunteered for income management were positive about the initiative, reporting lower stress levels and marked improvements in their ability to manage their money,’ Mr Andrews said.

The Australian article suggests that the reports support the extension of the program, with the minister going on to remind us of the McClure and Forrest contributions to this policy area. However, my more careful reading of both reports finds no clear results that would endorse imposing any form of compulsory income management on income-support categories or place-based eligibility.

What did the reports find?

One report covers a voluntary version in the APY lands. This program was requested by local Indigenous communities and devised in consultation with them.

The other report covers pilot programs in various locations. These involve a wide range of compulsory and voluntary entry and eligibility criteria.

The only really clear finding of both reports was that those who had voluntarily decided to participate had more positive responses to income-management programs.

This included most but not all in the APY scheme who saw it as meeting some local needs. The other evaluation included about half of the interviewed group who were compelled to take part, either as a category or on social worker recommendations. Their responses to income management were often negative compared to the voluntary groups.

To quote from the reports, the Social Policy Research Centre’s APY findings were:

The majority of community members and other stakeholders who participated in this study were positive about income management being introduced into the APY Lands. The fact that the communities had requested income management, and had been consulted about its introduction, appears to have had a major influence on the communities’ view of income management.

Responses are mixed in relation to the impact of income management on the wellbeing of the community as a whole, but overall there is a belief that it has had a positive though limited impact so far.

But income management has not suited everyone. A number of study participants had decided not to try it, or had tried it and decided not to continue.

The second report on Deloitte’s evaluations of place-based income management (PBIM) gives some measurable positive results for voluntary income management (VIM) participants. They were on the program for some time before some compulsory categories were added. The latter group showed far fewer positive responses to being deprived of control over their spending.

The Deloitte report observes:

The short-term outcomes of PBIM noted in this report include the ability to pay bills and other payments on time and reduced stress or worry. The probability of reporting positive outcomes was increased for VIM customers between the survey point at baseline and the wave one survey. The probability of reporting negative outcomes increased among the surveyed VULN [vulnerable income management] cohort.

The level of tobacco and alcohol consumed by VIM customers decreased significantly over the period between baseline and wave one compared with the change for the comparison group. This suggests a positive impact of PBIM on these behaviours. No such significant impact was observed in the short term for VULN customers, who were less likely to engage with these behaviours at baseline than VIM customers.

Consent is the key to benefits

The above findings are obviously limited. They certainly do not offer clear endorsements of any forms of compulsory income management, only support by those who voluntarily joined it.

Many of these people were reported as already using the Centrepay system for housing etc. The question arises whether this voluntary system should be expanded rather than continuing the income management program, which is linked to compulsion and costly administration.

Fred Chaney fears that imposing compulsory income controls could be ‘very destructive’. AAP/Newzulu/Hugh Peterswald

Even former Liberal Indigenous affairs minister Fred Chaney has warned against compulsory income management. There is a signal lack of serious evidence in the many other earlier studies of income management that compulsory controls on benefit spending create general benefits.

Some recipients have indicated they like being managed. Yet seven years of NT official data covering the communities that started the program under the Howard government have produced no independent evidence of improved outcomes.

At this stage of policy changes, we need to note the repeated reports of failed programs that were supposed to assist Indigenous people with “Closing the Gap”. These failures often come from the inclination of ministers and advisers to follow their political beliefs instead of evidence. They fail to make effective use of any professional, rather than political, expert advisers, including impartial advice and evidence from the Australian Institute of Health and Welfare.

It is interesting to note that the original income-management trials were part of the so-called emergency NT Intervention. Although the program was de-racialised under the ALP, its original and still majority application to the NT Indigenous population has resulted in little public scrutiny of the basic assumptions of the right to control welfare support.

The Forrest view of generalising it to all welfare recipients obviously echoes government beliefs that they need paternalistic controls. In times when budget cuts in welfare are touted, it is strange that the expense of the administration of social control, estimated at up to $4,000 a year per person, is not a disincentive.

We can only hope the government, which claims to want change, does not continue to fund expensive but ineffective programs. That will lead to cries that “nothing works” in welfare as well as Indigenous policies.

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