Saying No To The Evidence, Again


It’s done. The government has just passed new income quarantining laws through the Senate which will extend income management to non-Indigenous welfare recipients in the Northern Territory.

The Government, supported by the Opposition, pushed a set of unamended Bills through the Senate which will make it possible for government benefit payments to be controlled such that 50 per cent of income will be available only via a plastic basics card for spending on certain items in certain stores. The target groups will now extend beyond the residents of certain Indigenous communities to other benefit recipients in a designated area, starting with the whole of the Northern Territory.

Governments inevitably make mistakes, some big, some small, but when there is real evidence that policies are flawed, red flags should rise. Usually someone in power listens when confronted by a diverse phalanx of reputable opponents, compelling counter evidence, and a very high cost of implementation. In this case, however, the Government is not only not listening but crowing about the policy.

Here’s what Indigenous Affairs Minister Jenny Macklin wrote about income management in The Australian yesterday:

"This week, the Senate has the opportunity to pass legislation in the best interests of Australia’s most vulnerable children, by helping families up and out of entrenched welfare dependency. The federal government’s reforms aim to restore independence and dignity to people’s lives and to instil in their children the expectation that life has more to offer them than the next welfare cheque."

She continued, "I know there are strongly held views about these reforms but at their core they are about human dignity. The dignity of being a responsible parent, seeing your children go to school each day with no limits to their aspirations. The dignity of earning a pay cheque, of learning the skills to get a job."

The only trouble is that there is no evidence that such changes work — and there is some evidence that they reduce dignity and self worth. The changes constitute a massive change to the welfare system — and they have passed without adequate scrutiny.

There was little serious debate when the original income management program was introduced because, in a mix of racism and ignorance, most either ignored it or failed to examine the blanket removal of the rights of people in certain areas who had neither shown any evidence of financial mismanagement nor parental incompetence. The majority government members’ report released early in March oddly recommended that the legislation be passed — despite the fact that 90 of 93 submissions to the Committee did not support the strategy.

The new inclusion of non-Indigenous welfare recipients will allow the Government to lift the suspension of the Racial Discrimination Act. As Macklin phrased it, "the passage of this legislation will remove what has been a blight on Australia’s reputation as the land of a fair go. If the legislation does not pass, the suspension of the Racial Discrimination Act continues. A vote against the bill is a vote for the status quo."

This is a desirable change — but it will only be made possible by stripping the human rights of a wider population of payment recipients: parenting payments, Newstart, Special Benefit and Youth Allowance (if not in full time study). In fact, the initial change will be marginal as it will, de facto, include most of the Indigenous people who were already on income management and add in many more from non-targeted communities. Add in non-Indigenous older unemployed people, sole parents and youth and you have an average shock jock’s usual suspects line-up. The more respectable and powerful recipients of pensions — such as the aged and disability support pension or carer income support — are not presently included in the income management scheme.

This targeting partially explains why few have bothered to defend these groups from the retro paternalistic assumptions that these income recipients are generally disorganised, isolated and anti-social and therefore need to lose control over half their income. Even if some recipients of payments were bad managers of their lives, will income management solve the problem?

The latest data from the Northern Territory does not show any significant improvements of life after two years of income management. There is a singular lack of evidence that there are any particular benefits for these types of programs and some evidence, in fact, that they may do harm.

There are some women’s groups in the NT who claim there are benefits for their communities — but there is little more than anecdotal evidence to support their views. The government claims to have data that prove benefits but an exhaustive examination of the reports (pdf) they use that are public does not support this.  The evidence against the program is much more public and convincing and is based on good data.

A careful professional report from the Australian Indigenous Doctors’ Association 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 AIDA recommended that compulsory income management be stopped and that a voluntary option be provided. This was also the recommendation delivered by the Government’s 2008 review, chaired by Peter Yu.

The Government should not just argue about whether there is some other data or what is on offer could be differently interpreted, but consider that they may have got the policy wrong. The ample evidence, the experience of most welfare groups, and analysis by informed academics all opposing the process, should be convincing. But they are impervious to oppositions.

Asked recently by The Australian whether she was embarrassed by compulsory income management, Macklin said: "Not at all, I think it’s a beneficial tool. If you look how it has worked, it has helped families put more food on the table. Labor is committed to progressively reforming the welfare system to foster individual responsibility."

However, this view is contradicted by many, including ACOSS chief executive Clare Martin who bluntly said last week: "We are calling on the federal government to halt this scheme. There is little evidence to show compulsory income management assists people overcome disadvantage."

The overarching assumption of this policy and its fundamental flaw is that almost all welfare recipients in the NT, and presumably elsewhere later, lead disordered lives and therefore are not managing their finances or providing adequately for their children.

The exposure draft also puts a heavy onus on those seeking exemption to prove standards of behaviour that may be inappropriate and often unattainable for quite competent people. One "improvement" touted for the new scheme was that compulsorily included people could apply for exemptions — if they could prove they were competent. However, the criteria set ignore both financial constraints and lack of service, as well as the limits of below poverty line incomes.

The processes may create further compliance difficulties by placing applicants and their children at greater risk by imposing additional bureaucratic demands and burdens. However, the current very severe criteria are expected, we are told, to exempt only 10 per cent of welfare recipients, which indicates an assumption that 90 per cent of people on welfare are vulnerable and disengaged. Compulsory inclusion should mean that standards for exemption must be reasonable. The exemption process should set sensible criteria that can be met by the average type of money manager, not those who follow text book models.

This extension of income management shows an unusual combination of bad policy making that ignores any counter evidence and bad design of instruments that impose extra problems of bureaucratic control over those affected. The processes counter every claim by this government to be driven by evidence-based policy — and may prove extra damaging for those marginal groups who are least able to make their political points. These groups are already often damaged by their lack of autonomy — and now their powerlessness will be extended to where and how they buy their groceries.

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