Income management doesn’t work, so let’s look at what does

Real and sustained engagement with Aboriginal people should be the starting point in rethinking Indigenous welfare policy. AAP/Marianna Massey

In recent years, Tangentyere Council Research Hub has undertaken data collection in Alice Springs town camps as part of a longitudinal study of income management. The final report of around 300 pages was handed to government in September and was finally released on Thursday.

As a participant in the data collection we received four pages of feedback on the research. This showed that, to a large extent, income management does not achieve its stated aims. The one group of people who do gain a little benefit are those who choose to have their income managed voluntarily.

The report is based on administrative information from Centrelink, from stores that accept the so-called Basics Card, a survey of more than 1000 people on income management and interviews with a range of stakeholders.

What has the research found?

Income management quarantines 50% of a person’s welfare income, which is available for spending through the Basics Card. This card does not allow the holder to buy alcohol, pornography, tobacco and tobacco products, gambling products, gambling services, home-brew kits and home-brew concentrate.

In brief, the study findings are:

  • income management does not change problems such as running out of food;
  • people do not manage their money differently – very few people save their money up and those who spent their money quickly continue to do so;
  • humbug in the community is reported to be about the same; and
  • there is no evidence of less drinking, kids going to school more or people eating better foods.

Finally, there was almost no change in financial well-being among people on income management over the period of the research (2011 to 2013).

The question of what to make of these findings is particularly pertinent now,in light of the recent proposal in Andrew Forrest’s Creating Parity report that people receiving welfare should get a “Healthy Welfare Card”. Those receiving age or veterans’ pensions would be excluded, though there is no explanation for this.

If quarantining welfare payments does not change people’s behaviour, particularly in their ability to “manage” their money, then we need to question whether expanding this system makes sense. And if income quarantining does not work, what are the alternatives?

To properly answer this question we need to go back further and explore the origins of the thinking that produces “solutions” like income quarantining. Then we will be able to explore other policies that may provide different and more effective solutions.

To work, policy must be just and fair

In Australia (and the US and UK), a reconceptualisation of what welfare was “for” started to take shape around the turn of the century. Welfare was rebranded not as a “right” of a citizen, but as a benefit that people needed to “earn”. This move has underpinned the notions of mutual obligation (which has led to policies such as Work for the Dole), which are deeply embedded in welfare policy thinking today.

One of the interesting developments to have come from this move is that welfare recipients are no longer regarded as the best judge of their own needs; they are seen to need external control to assist them to make “good” decisions. However, one of the strong proponents of this thinking and someone many feel is responsible for leading this conversation, US poverty theorist Lawrence Mead, acknowledges that government can only do so much to foster change. That, he says, needs to start within the family.

Although many Aboriginal people in Alice Springs town camps are happy to stay on income management, the recurring issue people have with the measure is essentially a moral one: they see the blanket nature of the provisions as racist. Everyone was treated as if they had a problem, regardless of whether they were managing their money effectively, sending their children to school or buying healthy food.

For those in town camps, a more just and effective solution is one in which their agency and aspirations are taken seriously, and investment is directed toward assisting them to get meaningful employment while living in harmonious communities.

Under compulsory income management, everyone is treated if they have a problem. AAP/Marianna Massey

Engagement, not imposition, is the way forward

Aboriginal researchers at the Tangentyere Research Hub and Aboriginal residents we talked with see that the key to better futures lies in working together to strengthen people’s sense of responsibility, with a prime focus being helping the people and families who need it. The difficulty with such a prescription is two-fold in the case of Alice Springs town camps.

First is that Aboriginal people see strengthening family in very different terms to that imagined by policymakers, who tend to assume that society is made up of individuals rather than groups. This thinking leads to the construction of solutions that target people as individuals first, rather than as members of extended social networks.

The practical problem with this is that it undermines the building of strength that change is predicated upon. Aboriginal people in the town camps are looking to engage with governments in ways that strengthen their knowledge and culture, which in turn produces tangible meaningful change in their lives. They reject the contradictory logic at the heart of compulsory income management in relation to who drives (and should be driving) change in their communities.

As the research demonstrates, taking away people’s responsibility to manage their own money does not lead to any change in the way they manage their money, or increase their ability to manage it better in the future.

We should be asking serious questions as to whether the proposed Healthy Welfare Card will produce the transformation desired by government. If, as this research suggests, the answer is “it won’t”, then we need to fundamentally rethink our approaches. Real and sustained engagement with Aboriginal people should be the starting point.


This article has been amended since publication.

We produce knowledge-based, ethical journalism. Please donate and help us thrive. Tax deductible.