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Government remains deaf to the data on income management

There’s no evidence to suggest that the government’s income management program is working. So why is it being expanded? AAP

If Finance Minister Penny Wong is serious about delivering budget savings to Australians, perhaps she should rethink the government’s commitment to its contentious income management program.

By cutting income management, the government could save at least $100 million a year for administering and possibly harming the 20,000-plus welfare beneficiaries who lose control over half their payments. The New Income Management (NIM) program in the Northern Territory has now been evaluated by the Social Policy Research Centre. Its report raises serious questions on whether it delivers any significant benefits.

Unfortunately, the federal government’s response so far suggests the opposite will occur. Despite the conditional welfare program offering no clear evidence of its efficacy after five years in operation, the program is expanding. The report, stage one of three, was delivered some months ago but was only posted on the FAHCSIA website in the last week of November. The media release showed official government responses failing to recognise or address either problems with the program or its failure to show significant benefits.

On November 29, the federal government announced improvements to the delivery of income management in the Northern Territory in response to findings from the interim evaluation report.

The government claims income management helps families ensure their welfare payments are spent in the best interests of children. It ensures that money is available for life essentials, and provides a tool to stabilise people’s circumstances and ease immediate financial stress. The data does not support this claim.

The interim report by the Australian National University, Australian Institute of Family Studies and the Social Policy Research Centre at the University of New South Wales found no clear benefits. The best the government media release could find to quote were the following claims: among indigenous people on income management in the Northern Territory, there was a statistically significant perception (emphasis added) of an improvement in their ability to afford food; and income management may make a contribution to improving wellbeing for some, particularly those who have difficulties in managing their finances or are subject to financial harassment.

And that was it! Despite the evaluation’s signalling of widespread negative responses from recipients, the government’s media release does not acknowledge these findings at all. In fact, two new categories of income recipient were added for income management: under 16-year-olds, and those emerging from jail.

The dilemma remains of how to encourage the government to make policy with its own data rather than prejudices. This report is not the first to question benefits and raise possible damage, so the official response further suggests that the government is impervious to evidence that does not support existing policies.

This report needs to be read in context. The results reported are neither all new nor surprising, as they reflect other data and recommendations provided over at least four of the five years that income management has been operating in the Northern Territory. Whether compulsory income management is beneficial was raised in the Yu report in 2008, which was commissioned by the current government. The possibility of harm was raised by the Australian Indigenous Doctors’ Association (AIDA) report.

Using methodology endorsed by the World Health Organisation, the AIDA report found that the Intervention would potentially lead to “profound” long-term damage, and that any potential benefits to physical health were largely outweighed by negative impacts to psychological health, social health and wellbeing, as well as cultural integrity.

The survey by the Equal Rights alliance also suggested many of those covered felt shamed by using the BasicsCard. The government has offered, as alternative data, other responses that welcomed the compulsion to justify its continuation. However, this is the first evaluation — apart from the Equal Rights Alliance study — that records widespread negative experiences of recipients who take part in the income management scheme.

The Social Justice report, tabled in the same week as the SPRC one, by Mick Gooda suggests that aspects of the Intervention, including income management, could be affecting the rising self-harm and suicide rates in the Northern Territory. His report was written before these data sets were released, so the possibility of connections should now be at least examined.

The evidence suggests the imposition of unwanted income controls can undermine people’s sense of agency and self control, which is essential for good health and wellbeing. This concept comes from research by epidemiologist Michael Marmot in the World Health Organisation’s Social Determinants of Health report. He suggests that lack of a sense of control is one of the major barriers in remedying health inequalities.

There is little (if any) evidence of overall improvements in affected Northern Territory communities. Often there is deterioration in indicators such crime statistics, self-harm injuries and suicides, school attendance and NAPLAN results, child protection or other possible wellbeing statistics that appear in a wide range of official NTER reports and NT statistics. The few good changes are more clearly attributable to increased policing, more services, better shop management and other funded programs than income management. These results suggest that the NTER, as an overall top-down imposed program, has not achieved many clear improvements to indigenous wellbeing in the Northern Territory.

There are few visible benefits of participating in the income management programme. Apart from some reporting of reduced humbugging and apparent approval of the program by some participants, the evaluation shows a lack of data to support the benefits of the program. Government responses are that some people claim to like imposed IM. These particular responses often raise methodological doubts as respondents have been paid to answer the surveys, and positive responses may involve possible gratuitous compliance. People may often claim a program does them good, despite other evidence it does not. The evaluation itself offers examples of respondents reporting local improvements that are not backed up by valid data.

The government’s response that it is too soon to see results is also questionable, as SPRC results show that individual length of time on income management does not show any statistical differences of responses of those on for five years and the more recent recipients.

Costs of the program

The program is expensive. One wonders why it is being expanded at a time that the government is looking for savings. Costs are estimated to be about $80 a week to provide administration and infrastructure per person.


The Senate Community Affairs Committee inquiry that preceded the new income management legislation noted the lack of data for benefits of the prior version of the program and recommended the current evaluation to provide that evidence. Now we have the report and there remains no valid evidence that any forms of income management — compulsory or voluntary — are making a positive difference.

This is a similar conclusion we came to at Jumbunna in 2010. In 2011, the analysis we did appeared as the Journal of Indigenous Policy 12, (

In February 2011, I expressed my concerns about the evaluation, given that the government members were then ignoring all the current evidence. I questioned whether the evaluation would not be used to inform decisions but to legitimate further bad decision-making. Unfortunately, my predictions were accurate, and the program was expanded on July 1 2012 and again later.

The latest media release suggests more groups will be added at will. Even though some newer versions outside the NT have not included the wide compulsory IM for total populations, they still target ‘vulnerable’ groups for compulsion as judged by Centrelink or others, and often those on so called voluntary measures have been pressured to join them.

The challenge to academics and advocates is whether we can use the data in the SPRC report to influence changes in government policies, or whether it will continue to be used to legitimate bad decisions.

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