Refugees put on income management, law still racist

March 26, 2011

The federal ALP government is pushing ahead with the punitive system of “income management” despite the fact that it is racist, unfair and expensive.

In June 2010, the federal government passed legislation allowing the extension of welfare quarantining beyond the 73 Northern Territory remote communities that were its first target.

At the time, Indigenous affairs minister Jenny Macklin hailed the extension, saying it was no longer racially discriminatory. This was supposed to be a departure from the income management scheme first introduced by the Coalition government of John Howard in August 2007.

The measures were supposedly introduced as part of the NT intervention to combat high levels of child abuse and neglect in those communities.

Income management restricts 50% of welfare to a card that can only be spent on food, clothing, rent and medical supplies.

It was an explicitly racist policy that was condemned by Amnesty International at the time.

The ALP government said it extended the policy so that it could apply to all welfare recipients in the NT and therefore make it non-discriminatory.

But a March 10 Senate estimates committee revealed that after more than six months of the new, improved “non-racist” income management scheme, over 92.4% of those who have been forced onto income management are Aboriginal.

In contrast, three-quarters of those who were able to successfully appeal the quarantining were non-Aboriginal.

This reveals that the welfare quarantining system is still racist. More than that, the extension itself has hit hardest the most marginalised in the NT.

The laws give high levels of discretion to Centrelink employees to decide who gets targeted and who doesn’t. This means people from poor and migrant backgrounds, who may have difficulty explaining their situation in English, are more likely to be put on income management.

Newly-arrived refugees are particularly affected. Many refugees who leave the Darwin detention facilities, particularly those with families, who manage to qualify for Centrelink benefits, find themselves placed on income management.

The Refugee Council of Australia said in September 2010: “Quite a number of refugee and humanitarian entrants spend considerable time after they arrive in Australia learning English and then studying for qualifications (often additional qualifications) to assist them in securing sustainable employment.

“In many cases, the income management regime will be applied as they move closer to being ready for full-time work.

“The intervention of government agencies to manage a family’s financial affairs will be unwelcome and unnecessary and, inevitably, will hinder the family’s path to full financial independence.”

Macklin has maintained that income management works, but the figures from the government's own reports don’t back it up.

The government’s three-year report said cases of child abuse and neglect, suicide attempts and malnutrition had all increased under the intervention.

The rise in abuse reports could be because it’s being reported more, rather than more common, but the rise in malnutrition and suicide could not be explained as easily.

In a June 2010 article on, Professor Jon Altman said the government had provided no evidence that income management had improved any social indicator.

Altman said: “This is a serious and disturbing report that unfortunately is accompanied by the now almost de rigueur positive spin media release from ministers Jenny Macklin and Warren Snowden — Improving Community Safety Under the Northern Territory Emergency Response.

“The word ‘improving’ is ambiguous and provocative because there is an increase across a wide range of violence and other crime statistics … much of the analysis is just description of dollar inputs and outputs rather than outcomes and there is no assessment of whether the [intervention] represents good value for money to the Australian taxpayer (including Aboriginal taxpayers in prescribed communities).”

Indeed, it costs $45,000 a year to income manage a welfare recipient. But this hasn’t stopped the “anti government spending” Coalition from calling for the policy to be extended.

In the March 9 Australian, Liberal shadow treasurer Joe Hockey said he wanted income management across the country. He said Centrelink staff “should also have the capacity to consider the extension of income management — the control of welfare payments through quarantining and direct pay schemes — where they believe that it is warranted”.

The ALP seems more than willing to follow through with this suggestion. On February 7, the Daily Telegraph said Prime Minister Julia Gillard had convinced the ALP caucus to support widespread welfare reform that penalised jobseekers and sought to reduce spending on welfare.

As with income management, those most affected will be poor, immigrant, Aboriginal and marginalised people.

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