July 1 is the new financial year and the start of many new government policies. This year, the carbon and mining taxes, and expansion of income management, or welfare quarantining, to five new locations.
People receiving Centrelink payments and living in Playford in South Australia, Logan and Rockhampton in Queensland, Greater Shepparton in Victoria, and Bankstown in NSW may be subject to the new system.
The carbon and mining taxes have generated hysterical debate, but the extension of income management has been noticeably underreported.
From July 1, people Centrelink deems financially or personally “vulnerable” or are referred to Centrelink by child-protection authorities will have 50-70% of their payments restricted to a “BasicsCard”, to be used only for essentials, during its three-year “trial”.
But the federal government and opposition have made no secret of the fact they would like to see income management nationwide, and extended to other categories of welfare recipients, like “disengaged youth” and “long-term welfare recipients”.
At the 2010 election, Liberal leader Tony Abbott said income management should be applied to all long-term unemployed. This would have an estimated cost of $7 billion a year, the National Welfare Rights Network said.
The major parties' refusal to acknowledge the plethora of research condemning income management as expensive, humiliating and ineffective suggests a deeply-rooted ideological commitment regardless of the evidence.
Initially introduced with the 2007 Northern Territory intervention and described as a child-protection measure, income management has morphed into an increasingly vague initiative to reduce spending on alcohol, cigarettes and gambling, improve nutrition, and promote financial and personal responsibility.
It has also been linked to “welfare dependency”, the supposed idea that generous, lenient systems of welfare make recipients lazy and passive, stifling their responsibility, self-reliance and motivation to find work. It is argued making Centrelink payments stricter and more onerous will raise motivation.
After five years, the evidence suggests the policy (at least its non-voluntary versions) has not achieved its professed goals. Rather, the policy is doing more harm than good.
A stream of studies – from the Australian Indigenous Doctors Association (AIDA), the Public Health Association of Australia, the University of NSW Research Centre for Primary Health Care and Equity, and the Menzies School of Health to name a few – indicate income management does not significantly affect the consumption of alcohol, cigarettes, soft drinks, or fruit and vegetables.
* An Equality Rights Alliance survey of 180 NT women on income management found 85% had not changed what they buy, 79% no longer wanted to be subject to it, and 74% felt discriminated against.
* AIDA found that NT stores being better organised and supplied with better food was responsible for healthier consumption, not income management.
* Research by the Menzies School of Health found that improving the affordability of healthy food and community-wide education does improve nutrition, but not income management.
* Income management can actually worsen health outcomes. AIDA found that feelings of humiliation and powerlessness generated by income management can cause long-term mental health impacts.
This is consistent with work by Michael Marmot suggesting that control over one’s life is one of the most important determinants of mental and physical health. Income management reduces recipients’ control over their life by micromanaging their finances.
There is also research from Latin America and the US suggesting coercive, punitive policies like income management have the potential to increase family breakdown by placing additional stresses on already vulnerable families.
Also concerning are the perverse consequences of the policy for victims of domestic violence, explored by multiple Australian Law Reform Commission reports.
It is feared the prospect of being subject to income management will discourage many victims of domestic violence from disclosing their situation to Centrelink, claiming extra assistance like Crisis Payments, and leaving the relationship. Domestic violence will be one of the triggers for the “vulnerable” category of welfare recipients and make them eligible for the BasicsCard.
If the five years of deafness by governments to negative evidence of income management is any indication, it is almost certain they will ignore negative evidence from the five new trials. Only a sustained, nationwide campaign linking Aboriginal and non-Aboriginal communities, welfare recipients and welfare sector workers, unions, migrant, religious, and women’s organisations will make them hear.