What's the future for income management in the Northern Territory?

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What's the future for income management in the Northern Territory?

Posted 4/07/2011 by Luke Buckmaster


In her foreword to the Government’s recent discussion paper on the future of the Northern Territory Emergency Response (NTER), the Minister for Indigenous Affairs, Jenny Macklin, argued that lack of consultation had caused ‘ongoing anger, fear and distrust among indigenous people’ and that the next stage of the NTER would need to be based on ‘partnership with Aboriginal people’. To this end, the Government plans to consult with Aboriginal people over coming months about ‘what has worked well and where improvements can be made’.

Interestingly, the paper does not include income management as one of its ‘eight areas for future action’. Indeed, the paper argues that ‘as income management applies in other areas of Australia it is no longer part of the [NTER]’.

Despite not being included specifically as an area for future action, it is likely that income management will be raised by participants in consultations on the NTER. For one thing, it would seem to be a central element of the NTER, given that it currently applies to nearly 17,000 people in the Northern Territory and, according to the Government, at December 2010, over 94 per cent of Territorians on income management were indigenous.

Further, income management has been one of the most controversial aspects of the NTER. One of the main criticisms has related to the way in which it is applied to particular categories of welfare recipient—not just those whose personal behaviour may be seen to indicate that management of their welfare payments might be necessary. This criticism has recently been made by Cape York Indigenous leader, Noel Pearson, a person who is generally supportive of the concept of income management.

Pearson has also criticised the way in which policy in the Northern Territory has been ‘unilaterally decided by government’, rather than developed and implemented in large part by Aboriginal leaders and organisations. According to Pearson, if the system of income management in the Northern Territory was similar to that introduced in Cape York, it would have gained far greater acceptance.

So, what do we know about the Cape York approach to income management?

Probably the most important difference from the Northern Territory approach is that the Cape York system is more clearly targeted at those failing to meet certain obligations to their children and the community.

Income management in Cape York forms part of the Cape York Welfare Reform Trial (CYWRT), a joint initiative of the Australian Government, the Queensland Government and Noel Pearson's Cape York Institute for Policy and Leadership. The CYWRT is being implemented in the communities of Hope Vale, Coen, Aurukun and Mossman Gorge (‘the reform communities’).
The purpose of the trial is to address Indigenous disadvantage in the Cape York region by fostering personal responsibility and local leadership. This builds on the recommendations of the Cape York Institute’s welfare reform project report. This report argued that Indigenous poverty and dysfunction in Cape York are not only a result of dispossession and racism but to a large extent are caused by negative social norms associated with a culture of ‘passive welfare’.

The CYWRT is administered by a Queensland state statutory body, the Family Responsibilities Commission (FRC). The FRC holds regular case conferences in each of the reform communities.

Any person who is a welfare recipient living in one of the four CYWRT communities and who fits into any of the following categories, may be referred to the FRC:
  • the person’s child is absent from school three times in a school term, without reasonable excuse
  • the person has a child of school age who is not enrolled in school without lawful excuse
  • the person is the subject of a child safety report
  • the person is convicted of an offence in the Magistrates Court, or
  • the person breaches his or her tenancy agreement—for example, by using the premises for an illegal purpose, causing a nuisance or failing to remedy rent arrears.
People referred to the FRC are required to attend a conference in order to discuss the issues that have led to their referral.
FRC Commissioners attempt to reach an agreement with individuals on actions they will take to assume greater responsibility, including attending support services and through personal actions such as putting children to bed early. People who have entered into such an agreement are case managed by the FRC for the period of the agreement.

In addition to this support role, the FRC has the power to require that the person's income (generally, 60 to 75 per cent) be managed by Centrelink for a period of between three to 12 months. The FRC uses income management both as a mechanism for ensuring that welfare payments are spent on necessities and as an incentive for the individual to engage with social supports and undertake behavioural change.


Statistics related to the operation of the FRC highlight the extent of the problems the CYWRT is attempting to address. As at 31 December 2010, the FRC had received 6336 notifications related to individuals within the reform communities since it was established in June 2008 (see table in this FRC presentation). The proportion of the adult population to have been identified in at least one notification has been substantial. A review of the FRC conducted by KPMG for the Department of Families, Housing, Community Services and Indigenous Afairs found that, by January 2010, more than 80 per cent of the adult population of Mossman Gorge and 50 to 60 percent of the other reform communities had been named in a notification. 

The FRC reports that 78 per cent of its clients have been the subject of multiple notifications. The FRC suggests that it is the refusal of many of these clients to engage in case plans and related activities that has resulted in the relatively large number of income management orders made - 458 people in Cape York had been subject to income management by May 2011

At this point, it is difficult to say whether the CYWRT has led to genuine, long-lasting improvements in the lives of people in the reform communities. As with the Northern Territory reforms, it may only be possible over the longer term to tell whether the sorts of personal and cultural change being sought under the reforms have taken place.  

The KPMG report found that that there had been:

 ... indicators of positive community-level change around school attendance, alcohol and violence in two communities (Aurukun and Mossman Gorge) [which] may be associated with the FRC and other initiatives, and underpin a higher level of acceptance of the FRC in these communities.
However, it also found that: 
Progress is not even across communities and individual behaviour changes are fragile. Such a situation is to be expected considering the complexity of the changes being implemented and the very great support needed for individuals as they move to align behaviour with community values.
The fragility of change is highlighted by the most recent data showing that school attendance actually fell in Term 4, 2010 when compared with Term 4, 2008 and 2009 in all communities except Aurukun (again, see table in the FRC presentation). It should aso be noted that Hope Vale mayor, Greg McLean, is reported to have said recently that his community is against an extension of the CYWRT, stating that the trial has failed and his community has had enough.

The absence of conclusive evidence of success, at this stage, is not necessarily an argument against the CYWRT. Indeed, it may be argued that it highlights the need for a continuation of the reform process (underpinned by income management). To this end, the Federal Parliament recently voted to extend income management under the CYWRT for an additional year to 1 January 2013 (for the trial to continue to this date, the Queensland Parliament will need to pass legislation extending the life of the FRC).

It is not possible to say whether an approach to income management in the Northern Territory similar to that in Cape York would be an improvement on current arrangements. Nevertheless, an approach that is more clearly targeted and community-based would be likely to address some of the main concerns of critics of income management in the Northern Territory. 

(Image sourced from: http://www.indigenous.gov.au/index.php/stronger-futures-in-the-northern-territory/)


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