Bills Digest No. 110,
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Social Policy Section
Purpose of the Bill
Cape York—a distinct model of income
Bottom-up versus top-down
Cape York model uses income
management as a tool to encourage responsible behaviour
History of income management in Cape
2003—early proposal for income
2005–2007—development of the Cape
York welfare reform trials
2014—trial extended to include
Number of people subject to
conditional income management
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
Position of major interest groups
Statement of Compatibility with Human
Parliamentary Joint Committee on
Key issues and provisions
Extending the sunset date
Table 1: legislated sunset dates for
income management in Cape York
When will the trial be completed?
Date introduced: 24
House: House of
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
All hyperlinks in this Bills Digest are correct as
at June 2017.
The purpose of the Social Services Legislation Amendment
(Queensland Commission Income Management Regime) Bill 2017 (the Bill) is to
amend the Social
Security (Administration Act) 1999 to extend the income management
element of the Cape York Welfare Reform initiative until 30 June 2019.
Income management was first introduced in the Northern
Territory in 2007 as part of the Northern Territory Emergency Response (NTER).
The Howard Coalition Government announced the NTER in response to the release
of Little Children Are Sacred: Report Of The Northern Territory Board Of Inquiry
Into The Protection Of Aboriginal Children From Sexual Abuse.
Then Indigenous Affairs Minister, Mal Brough, likened the
intervention to Australia’s response to the 2004 Indian Ocean tsunami. He
envisaged the NTER as a relatively short-term exercise with three phases: stabilisation,
normalisation and exit.
The Rudd Labor Government continued the NTER after winning office in late 2007.
Income management was initially introduced in 73
prescribed Indigenous communities.
Initially, it relied on a variety of approaches including supermarket store
cards. The Government later replaced these improvised arrangements with the
BasicsCard—an electronic funds transfer at point of sale (EFTPOS) card that can
only be used at approved merchants, and cannot be used to buy excluded goods such
as alcohol, pornography, gambling products and services, and tobacco products.
Under ‘New Income Management’, income management was extended across the
Northern Territory in 2010.
From 2008, income management was extended to a number of
other locations around Australia. These include areas in Western Australia, the
Anangu Pitjantjatjara Yankunytjatjara (APY) lands and Ceduna in South
Australia, and the Place-Based Income Management trials in Bankstown (NSW),
Logan (Qld), Rockhampton (Qld), Playford (SA) and Greater Shepparton (Vic). All
of these sites use the BasicsCard.
More recently, the Australian Government has introduced a
cashless debit card as an alternative way of restricting access to cash,
alcohol and gambling services.
The cashless debit card has been introduced in Ceduna and in the East Kimberly.
Since the introduction of the cashless debit card, there have been no new trial
sites using the BasicsCard model.
For an overview of income management see Income Management:
A Quick Guide.
distinct model of income management
Income management was introduced in the Cape York Welfare
Reform trial communities in July 2008, shortly after income management was
introduced in the Northern Territory. However, it was developed independently
and the two income management models differ significantly.
The Cape York model was developed over a considerable
period of time and has a well-articulated rationale (see discussion below). The
Northern Territory model appears to have been developed much more quickly and
its rationale is less well articulated.
The Cape York model was developed by the Cairns-based Cape
York Institute for Policy and Leadership with some assistance from outside
experts including staff on secondment from the Treasury.
Then Cape York Institute Director and Indigenous leader, Noel Pearson, drove
the process. The Northern Territory model was developed by the Australian
Government with limited consultation in the affected communities.
According to Noel Pearson:
... in Cape York the reform agenda was the initiative of
Aboriginal leaders, and the policy proposals came from the Cape York
Institute–not from government. The Northern Territory policy was unilaterally
decided by government.
In Cape York, conditional income management is used as a
sanction for individuals who have breached their obligations. In the Northern
Territory it is applied in a blanket way to entire categories of income support
recipients. According to researchers from the Social Policy Research Centre:
The [Cape York Welfare Reform] model of income management is
far more targeted than that in the Northern Territory ... Clients on income
management in the [Cape York Welfare Reform] trial communities are case managed
to a much higher degree, and their progress is closely monitored by the [Family
Responsibilities Commission] as well as the other case management arrangements.
This approach appears to be successful, and has a number of advantages for the
individuals concerned and for the communities more generally, as is evidenced
by the results of the social change survey.
According to Mr Pearson, ‘the difference from the
Territory is that the Cape York scheme encourages community members to take up
their responsibilities. If people are being responsible, they are not affected
by income management.’
model uses income management as a tool to encourage responsible behaviour
In the Cape York model income management is designed as ‘a
catalyst for behavioural change’.
In the long term, it attempts to reduce problems such as alcohol abuse by
encouraging responsible behaviour. In contrast, the Northern Territory model
applies income management in a much less targeted way in order to ‘reduce the
amount of cash available in communities in which substance abuse, gambling and
other anti-social behaviours are problems that can lead to child abuse and
One of the most disturbing findings from the evaluation of
income management in the Northern Territory was that it seemed to encourage
dependence on the welfare system. According to the researchers:
... rather than the program building people’s capacity and
motivating them to take responsibility and become independent and self-reliant,
for these people it has acted to make their lives more comfortable by relieving
them of having to take responsibility for some aspects of their financial
management. This in turn has made them more dependent and reliant upon welfare.
The Cape York model does not appear to have the same
income management in Cape York
In the early 2000s Noel Pearson and other Cape York
Indigenous leaders argued for a voluntary scheme of Family Income Management.
This scheme was designed to help households manage their income support
payments so that essential expenses such as rent, utilities and food were budgeted
for before money was spent on alcohol.
proposal for income management
In 2003 Acting Aboriginal and Torres Strait Islander
Commission (ATSIC) Chairman Lionel Quartermaine suggested paying income support
using a smart card that prevented recipients from buying alcohol and drugs.
Indigenous leader Noel Pearson supported the proposal arguing that it could
help ensure that parents used income support money to feed, clothe and care for
Mr Quartermaine’s proposal was rejected by the then Minister for Indigenous
Affairs, Amanda Vanstone.
of the Cape York welfare reform trials
In 2005, as director of the Cape York Institute for Policy
and Leadership, Noel Pearson called for a welfare reform trial in Cape York
Indigenous communities. Under the proposal, communities would opt-in to the
trial and would set up a new welfare reform model that moved beyond the
Government’s mainstream approach. A key part of the model would be to create
mechanisms that ensured ‘monies received for family go to the wellbeing of the
With support from both the Australian and Queensland Governments,
and assistance from staff seconded from the Treasury, the Cape York Institute
produced a plan for welfare reform trials in the Cape York communities of Aurukun,
Coen, Hope Vale and Mossman Gorge.
The 2007 report From Hand Out To Hand Up, set out an analysis of the
problems in Cape York Indigenous communities along with detailed policy
recommendations. According to the report, Cape York communities had experienced
a collapse of social norms with widespread social dysfunction as a result. The report
set out a strategy designed to rebuild norms and restore Indigenous authority.
The aim was to reinforce norms and values that community members already
endorsed rather than to impose norms from outside.
To reinforce social norms, the welfare reform trial would
make income support payments conditional on a broader range of obligations. These
would include the proper care of children, abiding by tenancy conditions in
public housing and not committing drug, alcohol, gambling or family violence
offences. To enforce these obligations a new statutory authority—the Family
Responsibilities Commission (FRC)—would be established. Where an individual
breaches their obligations, the FRC could issue a warning, direct the person to
attend support services or place them on ‘conditional income management’.
According to the 2007 report, conditional income
management ‘would be the ultimate tool available to the FRC to counter breaches
of obligations and encourage individuals to take responsibility for themselves
and others in their family and community’.
Conditional income management was designed to serve two
purposes. It would act as a deterrent to encourage community members to abide
by their obligations and:
... will effectively prevent the flow of welfare income to
substance abuse and other behaviours that impact upon the welfare of children
and dependents in the Welfare Reform communities. The conditional income
management sanction will help to provide a family with a break from
dysfunctional behaviour, supporting the success of other support services such
as drug and alcohol counselling.
Conditional income management was designed to be targeted
and temporary. As From Hand Out To Hand Up explained:
The conditional income management sanction is meant to be a
catalyst for behavioural change. In the longer term an individual must take
personal responsibility for meeting their obligations. The prospect of
sanctions being in place for an indeterminate period would undermine this
outcome. Individuals should also be provided with the opportunity to have a
sanction lifted once they demonstrate that they can meet their obligations.
In July 2007 the Minister for Families, Community Services
and Indigenous Affairs, Mal Brough, announced that the Government had accepted
the Cape York Institute’s proposal.
The Social Security and Other Legislation Amendment (Welfare Payment Reform)
Act 2007 enabled conditional income management in the Cape York Welfare
Reform trials and a separate model of income management that formed part of the
extended to include Doomadgee
Doomadgee joined the Cape York Welfare Reform trial in
In 2013 the Department of Families, Housing, Community
Services and Indigenous Affairs (FaHCSIA) released an evaluation report on the
Cape York Welfare Reform trial. The report was produced by a number of
independent researchers, each authoring a separate section of the report.
According to researchers from the University of New South
Wales’ Social Policy Research Centre (SPRC) there was clear evidence that the
wellbeing of community residents had improved over the trial period. However:
... it is difficult to establish the extent to which these
changes can be attributed directly or indirectly to [Cape York Welfare Reform],
and it is not clear whether the four communities are faring better than similar
comparison communities in Queensland, all of which have seen some improvements
in outcomes over the [Cape York Welfare Reform] period.
In his overview of the trial Michael Limerick, an
independent consultant, reported: ‘the evaluation has found that income
management imposed by the FRC has been a successful intervention in ensuring
that the needs of families and children are met.’
According to surveys, ‘78 per cent of respondents in the four communities
reported that the BasicsCard made their life better, while 12 per cent thought
that it made their life worse.’
However, Dr Limerick noted that income management does not
operate on its own:
The trial’s positive signs of progress regarding improved
money management are achieved not only through Conditional Income Management,
but also through MPower. MPower is a Cape York Partnerships Opportunity Product
designed to: support individuals and families to manage money for basic
material needs; build capabilities through financial literacy and behaviour
change; and build assets through saving and disciplined money management.
MPower is the most commonly used support service introduced by the trial, with
the usage rate ranging from one-third of Hope Vale residents to about
two-thirds of Aurukun and Mossman Gorge residents.
people subject to conditional income management
According to the July 2016 to September 2016 quarterly
report from the Family Responsibilities Commission:
Sixty-nine [Conditional Income Management] CIM orders were
made in quarter 33, a decrease of 19 from quarter 32. Since the commencement of
the Commission 1,926 CIM orders inclusive of original orders, extensions and
amendments have been made relating to 767 clients. Further activity during the
quarter is as follows: Aurukun, Doomadgee and Hope Vale decreased by 8, 5 and
10 CIM orders respectively, whilst Coen and Mossman Gorge increased by 1 and 3
CIM orders respectively. As at 30 September 2016, 37.6 percent of the
Commission’s clients have been subject to a CIM order over the past eight and a
quarter years. As at 30 September 2016 there were 173 clients subject to a CIM
order which equates to 8.5 percent of clients on a CIM order at a point in
On 13 June 2017, the Senate referred the Bill to the Senate Community Affairs Legislation Committee for inquiry and report by 20 June 2017.
Details of the inquiry are at the inquiry
At the time of publishing this Digest, no submissions to the Committee had been
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
has not yet reported on the Bill. The next Scrutiny Digest is due to be tabled
on 14 June 2017.
position of non-government parties/independents
While in office between 2007 and 2013, the Australian
Labor Party supported the Cape York Welfare reform trial and the use of income
management. In May 2013 the Labor Government committed resources to enable the
trial to continue.
The Australian Greens have consistently opposed income
management, including income management in Cape York. The Greens argue that
income management is expensive, ineffective and reduces people’s autonomy and
major interest groups
A number of community sector groups such as the Australian
Council of Social Service (ACOSS) and the National Welfare Rights Network have
been critical of income management. However, these groups acknowledge that the
Cape York income management is different to other models. ACOSS notes that the
model was not imposed by government but was negotiated with the affected
communities and that it relies heavily on case management and counselling with
income management as a last resort.
Gerard Thomas of the National Welfare Rights Network has said that income
management in Cape York is ‘a better model than blanket income management’.
The Government has not provided separate information on
the cost of extending conditional income management in the Cape York welfare
reform sites. Instead, the Explanatory Memorandum for the Bill gives the cost
of extending income management at all sites ($145.5m over the forward
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights
has not commented on the Bill yet.
the sunset date
Income management in Cape York is the only income
management measure with a legislated sunset date.
The sunset date is set out in the Social Security (Administration) Act paragraphs
123UF(1)(g) and 123UF(2)(h). Paragraphs 123UF(1)(g) and 123UF(2)(h) currently
provide that a person can be subject to income management under section 123UF
only after a decision by the Family Responsibilities Commission made before 1
Item 1 amends these paragraphs by omitting the
references to 1 July 2017 and substituting references to 1 July 2019,
with the effect of extending the sunset date from 1 July 2017 to 1 July 2019.
Income management in Cape York was established in 2007 by
Security and Other Legislation Amendment (Welfare Payment Reform) Act 2007.
Since then it has been extended four times (see Table 1).
Table 1: legislated
sunset dates for income management in Cape York
the trial be completed?
The objective of the Cape York Welfare Reform trial was to
test the policy principles outlined in the 2007 report From Hand Out To Hand
Up. According to the report ‘If the trial is successful, the policy
principles may be used to inform policy across Cape York Peninsula and
potentially in other regions.’
It is not clear whether or not the Government has decided
that the trial phase has ended.
Brough (Minister for Families, Community Services and Indigenous Affairs), National
emergency response to protect Aboriginal children in the NT,
media release, 21 June 2007.
Wild and P Anderson, Little
children are sacred: report of the Northern Territory Board of Inquiry into the
Protection of Aboriginal Children From Sexual Abuse: Ampe akelyernemane meke mekarle, Department
of the Chief Minister, Darwin, 2007.
to Question without notice: child abuse’, [Questioner: D Fawcett], House of
Representatives, Debates, 21 June 2007, p. 76.
of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA), Northern
Territory emergency response: one year on, Attorney-General’s
Department, Canberra, June 2008.
Institute of Health and Welfare (AIHW), Evaluation
of income management in the Northern Territory, Occasional paper, 34, FaHCSIA,
Canberra, 2010, p. 1.
National Audit Office (ANAO), Management
of the tender process for a replacement BasicsCard, Audit report, 26,
2010–11, ANAO, Canberra, 2011.
Bray, M Gray, K Hand and I Katz, Evaluating new income
management in the Northern Territory: final evaluation report, UNSW
Faculty of Arts and Social Sciences: Social Policy Research Centre, Sydney,
September 2014, pp. 18–19.
of Social Services (DSS), ‘Welfare
quarantining: income management’, DSS website, 24 May 2017. Bray, et al,
op. cit., p. 7.
an explanation of how the cashless debit card and the BasicsCard differ see: D
Arthur and P Pyburne, Social
Security Legislation Amendment (Debit Card Trial) Bill 2015, Bills
digest, 27, 2015–16, Parliamentary Library, Canberra, 9 October 2015.
debit card: overview’, DSS website, 24 May 2017.
management: a quick guide, Research paper series, 2015–16,
Parliamentary Library, Canberra, 15 July 2015.
York Institute for Policy and Leadership, From
hand out to hand up: Cape York welfare reform project: Aurukun, Coen, Hope
Vale, Mossman Gorge: design recommendations, Cape York Institute for
Policy and Leadership, Cairns, May 2007, p. 1.
et al, Evaluating
new income management in the Northern Territory: final evaluation report,
op. cit., p. 8.
Pearson (Cape York Institute for Policy and Leadership), There
is nothing the government can do for you that you are unwilling to do for
yourself: Sir Robert Menzies lecture 2011, Melbourne, speech,
27 February 2011.
York welfare reform: evaluation: 2012, FaHCSIA, Canberra, 2012, p. 212.
bipartisanship ruins social policy’, The Australian, 26 March 2011,
York Institute, From
hand out to hand up, op. cit., p. 68.
Evaluation of income management
in the Northern Territory, Occasional paper, 34, FaHCSIA, Canberra,
2010, p. 2.
et al, op. cit., p. 319.
Pearson’, Radio National, Background briefing, transcript,
Australian Broadcasting Corporation (ABC), 29 October 2000.
for “smart card” payment for welfare recipients’, ABC Local Radio, The
World Today, transcript, ABC, 27 October 2003.
supports welfare “smart card”’, ABC Local Radio, AM, transcript,
ABC, 30 October 2003.
smart card unlikely solution: Vanstone’, ABC Local Radio, AM,
transcript, ABC, 1 November 2003.
Pearson (Director, Cape York Institute for Policy and Leadership), The
Cape York agenda: address to the National Press Club, Canberra, speech,
Cape York Institute for Policy and Leadership, Cairns, 30 November 2005, pp.
and public policy: the Australian Treasury, paper presented to
the Population Wellbeing Data Gaps Workshop, Australian Bureau of
Statistics, Canberra, June 2006.
York Institute, From
hand out to hand up, op. cit.
Brough (Minister for Families, Community Services and Indigenous Affairs), ‘Cape
York welfare reform trials to begin in 2008’, media release, 18 July
reading speech: Social Security and Other Legislation Amendment (Welfare
Payment Reform) Bill 2007’, House of Representatives, Debates,
7 August 2007, pp. 2–3, 7–8.
Elmes (Queensland Minister for Aboriginal and Torres Strait Islander and
Multicultural Affairs), Letter
to Mr Trevor Ruthenberg, Queensland Government Department of
Aboriginal and Torres Strait Islander and Multicultural Affairs, Brisbane, 17
York welfare reform: evaluation: 2012, op. cit., p. iv.
Responsibilities Commission, Family
Responsibilities Commission: quarterly report, 33, July 2016–September
2016, Cairns, p. 10.
Senate, ‘Legislation committees – references’, Journals,
42, 2016–17, 13 June 2017, p. 1376.
Community Affairs Legislation Committee, Social
Services Legislation Amendment (Queensland Commission Income Management Regime)
Bill 2017, The Senate, Canberra, June 2017.
Macklin (Minister for Families, Community Services and Indigenous Affairs), $24.5
million to progress Cape York Welfare Reform, media release, 3 May
Committee: Social Services and Other Legislation Amendment Bill 2013’,
Senate, Debates, 5 March 2014, p. 835.
Council of Social Service (ACOSS), Compulsory
income management: a flawed answer to a complex problem: policy analysis,
ACOSS, Sydney, September 2014.
Thomas (Policy and Media Officer, Welfare Rights Centre), Evidence
to Senate Community Affairs Legislation Committee, Inquiry into the Social
Services and Other Legislation Amendment Bill 2013, 10 December 2013,
Memorandum, Social Services Legislation Amendment (Queensland Commission
Income Management Regime) Bill 2017, p. 1.
Statement of Compatibility with Human Rights can be found at page 6 of the
Explanatory Memorandum to the Bill.
reading speech: Social Services Legislation Amendment (Queensland Commission Income
Management Regime) Bill 2017’, House of Representatives, Debates,
(proof), 24 May 2017, p. 12.
(Administration) - Queensland Commission (Family Responsibilities Commission)
Specification 2015 specifies the Family Responsibilities Commission
established under the Family
Responsibilities Commission Act 2008 (Qld) as the ‘Queensland
Commission’ referred to in section 123UF.
York Institute, From
hand out to hand up, op, cit., p. 17.
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