Billionaire Andrew Forrest proposes punitive welfare plan

Andrew Forrest wants to expand income management at the same time as saying "it's time to end the paternalism”.
August 8, 2014

In the same week that employment minister Eric Abetz announced the government would expand Work for the Dole to all job seekers under 50 and that job seekers would have to apply for double the number of jobs than previously, billionaire miner Andrew Forrest released his own recommendations for welfare reform — some of the most punitive ever proposed.

In his Indigenous Employment and Training Review, Forrest said he was seeking to address the gap in educational, employment and health outcomes between Aboriginal and non-Aboriginal Australians.

Its recommendations, though, apply to the entire country. Included is extra funding for programs that focus on prevention for at-risk families and individuals with extra prenatal and early childhood support, and major changes to how Job Networks operate.

Along with these suggestions are harsh measures such as stricter obligations for jobseekers, including extending Work for the Dole, less flexibility for Centrelink to exempt people from requirements and waive penalties for non-compliance, linking Family Tax Benefits to school attendance, tightening eligibility for the Disability Support Pension, and, most controversially, expanding income management to all working-age Centrelink clients.


Forrest calls for everyone but age pensioners and veterans to have all of their payments “managed” through what he calls the “Healthy Welfare Card”. This would affect 2.5 million people.

This would be the most dramatic expansion of income management in its history, not only for the number of people affected but for the severity of the restrictions on the freedom of welfare recipients. Currently income management clients have 50 to 70% of their funds “managed”. Only lump-sums are 100% “managed”.

As the Australian Council of Social Service noted, “this proposal would take our nation back to the 1930s when unemployed people did not get cash benefits and had to work on the roads or beg for charity to survive.”

Prime Minister Tony Abbott responded cautiously. Abbott said the report was “bold and ambitious”, that he “had no current plans to expand the income management system to all welfare recipients”, but he did not rule out an expansion of the policy.

Forrest argues income management will improve economic and social health for individuals and communities, and that the scheme is “regarded as very helpful for vulnerable people to help stabilise their budgets”.

Hypocritically, Forrest calls for this program that takes away the right of income support recipients to fully control their money to be expanded, despite saying “it's time to end the paternalism”.

Despite advocating income management as a tool for those struggling and needing assistance, he recommends an indiscriminate “blanket” approach, targeted at everyone.

It is offensive to assume everyone on Centrelink payments is suffering from deficiencies in financial and personal skills or is stuck long-term on payments. It ignores the fact that most of those who struggle with their money do so because Centrelink payments are too low.

An Anglicare Victoria hardship survey from 2009 found only 4% of recipients' payments was spent on alcohol, cigarettes, and gambling whereas 70% was spent on necessities like groceries and housing.

There are about 25,000 people on income management nationwide, 80% are in the Northern Territory.

The scheme has achieved little. The Commonwealth Parliamentary Library's 2012 paper Is Income Management Working, said there was “an absence of evidence relating to the effectiveness or otherwise” of the scheme.

The Department of Families, Housing, Community Services, and Indigenous Affairs study from the same year, Evaluating New Income Management In The Northern Territory: First Evaluation Report, was less guarded: “[Income management] has been applied to many who do not believe they need income management and for whom there is no evidence that they have a need for, or benefit from income management.

“Income management has led to widespread feelings of unfairness and disempowerment … for many people the program largely operates more as a means of control rather than a process for building behaviours or changing attitudes or norms.”

Given that one suggestion in Forrest's report is that programs be carefully judged by their outcomes with ineffective programs “terminated”, expanding income management when there is little evidence that the policy improves budgeting skills or the health of clients or their children is curious.


More than $1 billion has been spent nationwide on income management since 2007. Estimated costs for income management per person per year vary from $4000 to $5000 in suburban sites like Playford and Bankstown to $7900 in the remote communities of the NT, according to the Australian National Audit Office.

Why expand income management? Forrest recognises the need for more programs that build skills (for those who do need support), that are preventative rather than merely treating the symptoms of personal and family breakdown. There is no need for these to be attached to something heavy-handed.

In fact, income management could make these programs much less effective by making clients depressed and humiliated, making them much less likely to engage long-term with the positive services that do exist. There is some evidence that income management encourages dependency, making people with budgeting issues reliant on others to look after their money instead of building their skills.

The evidence says income management is an expensive, blunt, ineffective tool for helping those with serious financial, personal, or substance issues. But if the program is being expanded, the government obviously thinks it is working.

They must be judging it by a different criteria.


There is a lot of political advantage to the program. At a time when there is only one job for every five job seekers, it shifts the blame from the government’s lack of job creation programs to individuals.

It punishes people who need welfare and makes conditions to receive it so restrictive that people will avoid it if at all possible. This creates a pool of desperate people who will accept any job, even if it is very low paid or with poor conditions.

The government looks tough to those who believe welfare makes people lazy and passive, that Australia is too generous and lenient on the unemployed and is being taken advantage of. And it allows the government to blame the unemployed for budget cuts to other government services.

Forrest's report is part of this ideology. He uses all the old cliches: welfare as a destination, as a lifestyle, ending “the lure of unconditional welfare cash”.

His report fits nicely within the Abbott government's approach towards those on welfare: victim-blaming rather than system-blaming, and refusing to acknowledge the evidence about which policies actually work to reduce poverty and unemployment.

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