Extending income management in Cape York

Legislation introduced into Parliament last week proposes to extend operation of income management in Cape York for a further two years until the end of 2015. This will be the third time income management has been extended in Cape York since it began in 2008. The Government argues that income management is a key element of welfare reform efforts in Cape York, which it says have 'seen improved school attendance, care and protection of children and community safety'.

Cape York income management

Income management refers to a policy under which a percentage of the welfare payments of certain people is set aside to be spent only on ‘priority items’ such as food, housing, clothing, education and health care.

Income management in Cape York forms part of the Cape York Welfare Reform Trial in the 'reform communities' of Hope Vale, Coen, Aurukun and Mossman Gorge. Around 239 people in Cape York are currently subject to income management (see Quarterly Report 21) out of an estimated adult population of 2,040 (p. 108).

Cape York income management differs from the substantially larger ('Parenting/Participation') model in the Northern Territory (applying to over 14,000 people) in that it is targeted at those engaging in specified forms of behaviour deemed to be socially irresponsible. Also, unlike Northern Territory income management, it is part of a broader system involving case conferencing and referral to community support services.

Cape York income management is used both as a mechanism for ensuring that welfare payments are spent on necessities and as an incentive for individuals to engage with social supports and undertake behavioural change.

Is it working?

The best evidence available for evaluating the success of income management in Cape York is the March 2013 Australian Government evaluation of the reform trial. This found mixed results associated with income management.

There was some evidence that income management assists in reducing behaviours that lead to people being reported to the body in charge of welfare reform in Cape York, the Family Responsibilities Commission. Further, 78% of income managed people surveyed reported that the scheme had made their lives better. The evaluation found some dissent about income management, ‘with common complaints being the inability to use it in some stores and the paternalistic nature of the intervention’.

More broadly, the evaluation found that there had been improvements in areas such as school attendance and reductions in crime. However, as two of the report's authors, Ilan Katz and Margaret Raven, have noted it is difficult to draw conclusions from this, given that 'many other Indigenous communities in Queensland had also shown improvements'.

The evaluation found that progress was lacking in other components of the trial, such as housing and economic opportunities. Again, Katz and Raven suggest caution, given that 'it was not clear whether this was because of the lack of impact of the trial or the fact that the evaluation took place only five years after implementation and the expected outcomes may take many years to eventuate'.

Nevertheless, the report makes the important point that there is a 'risk that progress to date will not be consolidated if job, business and home ownership opportunities are not readily available at the time that people become motivated to change'.

Professor Jon Altman suggests that, while intended to promote engagement with the mainstream labour market, the gradual abolition of Community Development Employment Projects (CDEP) has meant that fewer people in the reform communities are now engaged in employment than prior to the trial. While the evaluation found that 211 paid jobs had been created during the trial period, this is well short of the over 800 CDEP positions that previously existed.

Altman (who views CDEP as a more likely source of economic engagement in remote regions than the mainstream labour market) observes that, while under the reform trial there is a focus on inactivity as a source of social dysfunction, 'the almost complete elimination of CDEP in the name of real jobs has rapidly swelled the ranks of the unemployed'.

What next?

There are at least two ways of telling the story of welfare reform in Cape York. One suggests that engagement with the mainstream labour market is the way forward and puts welfare reform at the centre of the kinds of changes in personal behaviour and social norms necessary to bring this about. Patience is required because changes of this kind may take many years to occur.

The other is more sceptical about prospects for 'real jobs' in remote Australia and sees some level of state involvement as inevitable and necessary. From this perspective, the absence of market-based employment opportunities may ultimately undercut any gains in social functioning that may be achieved through welfare reform.

The extension of income management in Cape York would be an indication of further support for the first story. Over time, though, substantial gains in areas such as employment and housing will be essential if this story is to be considered plausible and continued support justified.

*updated 2 December 2012



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