Income Management Policies in Australia

This assignment delves into the complex landscape of income management policies implemented in Australia. It requires a critical evaluation of various programs, such as Compulsory Income Management in the Northern Territory and the Cashless Debit Card trial, analyzing their intended and unintended consequences. The analysis draws upon academic research papers, government reports, and news articles to assess the effectiveness, ethical implications, and societal impact of these policies on individuals and communities.

Running head: REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 1
Report on Income Management in Indigenous Communities
Name
Institution

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 2
RESEARCH TEAM
Matthew Franczak
Cael Hannah
Alex Kyriazis
Steven Blacker
Zachary Mcclellan
James Thangman
Ammal Haddad

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 3
Table of Contents
ACKNOWLEDGEMENT...........................................................................................................................4
Introduction.................................................................................................................................................5
Historical background of income management........................................................................................6
Definition of Cashless Debit Card Trial.....................................................................................................8
Sites of Trial.............................................................................................................................................8
Objective of the CDC Trial......................................................................................................................8
Reason for Evaluation..................................................................................................................................9
Methods of Evaluation............................................................................................................................9
Results of the Evaluation.............................................................................................................................9
Hostile behaviors.....................................................................................................................................9
Household finances...............................................................................................................................10
Attitude change......................................................................................................................................10
Consumption of alcohol.........................................................................................................................10
Child enrolment in school......................................................................................................................11
Well-being and Health of the child........................................................................................................11
Freedom.................................................................................................................................................11
Financial aggravation................................................................................................................................11
Weaknesses of income management program...........................................................................................12
Exemption application...........................................................................................................................12
Limited acceptance by retailers.............................................................................................................12
Vulnerability of the system....................................................................................................................13
The problem of ascertaining the balance...............................................................................................13
The problem of sharing resources..........................................................................................................13
Exiting the system.................................................................................................................................13
Community differences.........................................................................................................................14
Risks of losing financial management skills..........................................................................................14
Other weaknesses.................................................................................................................................14
Strengths...................................................................................................................................................14
Concerns of Human Right..........................................................................................................................15
Project Cost...............................................................................................................................................15
Conclusion and Recommendations...........................................................................................................15

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 4
References.................................................................................................................................................17
ACKNOWLEDGEMENT
We wish to acknowledge and thank the following;
 Course tutor
 Friends
 Course-mates, 2017
 Shadow Minister for Indigenous Affairs and Aboriginal and Torres Strait Islanders

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 5
Introduction
Income Management is a situation whereby rules and regulations have put in place to
regulate the expenditure of specific group of people from their income payments. Certain amount
is set aside to meet costs of basic human wants like housing, health care, food and education. The
forcible introduction of Income Management was done by the government of Howard in the year
2007 as an emergency response. During this period, schemes for income management were
developed to help in circumstances of parents neglecting their children and also when the
children from such families were not registered in school. Provisions were also developed for
other people who wished voluntary management of their funds from income (Mendes, 2013).
Management of income has greatly changed the welfare structure of the Australian
people (Lovell, 2016). Conditions for joining the welfare has established with the restrictions
regarding the expenditure from the payments. A right has been given for full payment to any
qualifying government of Commonwealth and thus means that the recipients are allowed to
spend from the payment as the may deem fit. In certain occasions the government would grant
help in form of physical materials instead of cash. However, this has been criticized by scholars
of Social Policy like Ronald Mendelsohn describing it as an intrusion into the people’s (the
recipients’) privacy.
The initiation of income management by the government of Howard were among the
first improvements to change the conduct of the welfare recipients to help change the attitude
toward the social disadvantages by imposing sanctions to the welfare in a bid to modify the
recipients’ social customs and behavior. The policy of income management has been contentious
and debated upon by the members of the public while its tenets have not been understood by the

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 6
indigenous people of Australia and the leaders thereof. The background of this report will seek to
address reasons for indigenous people not understanding this policy.
Historical background of income management.
The income management policy was brought forth by the coalition government of
Howard as a response to emergency for some specific areas of the Northern Territory inclusive
of more than 72 remote societies and the related outskirts. These areas were defined by alcohol,
drug abuse and child neglect as well as other forms of social irresponsibility. So the government
had to respond and salvage the ugly state of those communities (Bielefeld, 2014).
Recommendations were, therefore, made to ensure that at least half an individual’s
earning was to be effected in form of food vouchers. This was widely believed that it could
imperatively impact on illicit drug abuse and alcohol use. On the same breath, payment in form
of food voucher was criticized as it portended unnecessary dependency from the people. The
forcible management of income was to be imposed on those who had weird manners in the
society. Therefore, to reconstruct the societal norms, regulations must lean on the values of the
community by coupling welfare incomes to the members of the society and in the children’s
interest as members of the community.
The government then introduced a law that would reduce the income by half by
separating the Australian government income payments with the far-reaching objective of
curtailing cash spent on drug abuse and those that are set aside for the sake of children and are
actually spent for that purpose (Agrawal, 2014). This is so because it was viewed that a child
under the care of a person who is not registered in welfare payment program would risk neglect
and fail to go school.

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 7
The measures have been supported by some people who view it as important in helping
those who are disadvantaged socially while some other people criticize the measures on the
grounds that it is simply concentrating on the indigenous group, stigmatizing them and denying
the right to self-determination of how to spend their money. Therefore the aim of this work is to
review the impact of this policy on the indigenous Australian people regarding its strengths and
weaknesses.
Definition of Cashless Debit Card Trial
The CDC has been intended to reduce the usage of alcohol and drug consumption as well as the
level of gambling by separating bigger percentage of income payments of the clients on the
Welfare program. The CDC has been tried in the remote areas of south and west Australia. It is a
compulsory program those on Income Support Payments. Those on wage or pension can
voluntarily join the program.
The amount of money one entitled to from Centrelink is not altered due to CDC. It only alters the
manner in which the money is received and spent. The amount remitted to CDC is 80% and 20%
is directly wired into individuals’ bank account. It is operated by a company called Indue. It
works like cards used in the bank only that it cannot authorize purchase of gambling,
pornographic materials and alcohol. It works only with authorized stores.
Sites of Trial
The earlier trials were done in eastern part of Kimberly and Ceduna. Currently, the trial will
spread to Hinkler and Goldfields covering the majority sites

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 8
Objective of the CDC Trial
The legislation aims at providing needs of the individual members and their families
particularly the children by ensuring that priority wants are first met before anything else. It
reduces the income available that may be spent on activities like pornography, alcohol and
gambling. The government is, therefore, responsible for the welfare of the disadvantaged, those
who are at risk of becoming alcoholics and the interest of the children of those who are at risk.
The government’s point of view on the importance of income management is that the
program can ensure there is food for family members, proper housing and good medical care.
Also it ensures that the children are enrolled in school and reduced financial harassment. Income
management is therefore a basis for economic and social empowerment through which the
disadvantaged groups can stabilize their domestic economies (Dee, 2013).
Reason for Evaluation
The Leader of the Opposition and Shadow Minister for Indigenous Affairs and Aboriginal and
Torres Strait Islanders, Bill Shorten need to know the extent of CDC impact regarding its
strengths and weaknesses.
Methods of Evaluation
The following methods have used;
 Individual behavior and attitude change
 Desired social effects on the outcome
 Statistics will not be compared on a wider range bearing in mind in there is widespread
consumption of alcohol and gambling practices in the country. This may not be used in
the report.
 Unreliable data will be dismissed.

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES 9
This evaluation will try and show the effects of service treatment and restriction of alcohol.
Results of the Evaluation
Hostile behaviors
The program is lessening the petty problems related to consumption of alcohol, hard
drugs and addicted gambling among the indigenous populace due to income management; there
is very little money left at their disposal to have them indulged in alcohol drinking and even
gambling hence reduced weird behaviors. On the contrary, those who are on voluntary welfare
payment program are relatively deteriorating in behaviors (Bray, Gray, Hand & Katz, 2014).
Household finances
Income management has enabled the indigenous people to overcome problems of running
out funds to cater food and other basic needs like housing (Bray, Gray, Hand & Katz, 2015). The
indigenous people have been able to pay rent, electricity and water bills however, their lending
capacity has reduced a great deal. Most people on welfare payment program have very little to
lend out to friends or relatives in need.
Attitude change
The indigenous people on welfare card have a changed attitude toward their finances.
They are very positive that their finances are being properly managed and they are able account
for their income as compared when it is at their disposal to spend it. Most of them are financially
contented and happy about the scheme especially those who are on voluntary income
management.

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES
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Consumption of alcohol
Alcohol wholesale supply has significantly reduced among the indigenous people.
Consumption per capita have also reduced. Health related issues in the hospitals have also
reduced. The alcohol related offences were also recorded to have considerably been reducing
with time. Violence have increased in families due to domestic issues and not alcohol. Over the
year between 2011 and 2013 the percentage of domestic chaos rose from 53% to 60% and the
violence related to alcohol escalated from 57% to 59 (Northern Territory Department of Attorney
General and Justice, 2013). Whereas there has been reduced cases of problems linked to alcohol,
gambling and other drugs, the situations in the families have not been getting any better as it
pertains issues like violence (Bielefeld, 2014).
Child enrolment in school
According to the Department of Education, (2013) the enrolment in schools has changed.
Between the years 2009 and 2012, the enrolment of indigenous students in remote areas have
marginally reduced. However, the attendance of indigenous students in urban schools have stood
at 84%. The rate of participation in school by the enrolled children from indigenous people
increased slightly from 87% to 90% in the Northern Territory.
Well-being and Health of the child
The children are basically at the risk of hostile behaviors of the individuals and the
community, therefore the development in well-being of others will definitely reflect in the lives
of children. The aim of income management is to ensure that the income is well spent on the
children so there is a notable improvement in the developmental life of children of those who are
on the BasicCard program. The information from the National Aboriginal and Torres Strait

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES
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Islanders Health Survey indicate an increase in fruit consumption by children from indigenous
communities as a result of nutrition program in school (Parkinson, 2015).
Freedom
The freedom of those indigenous people on the welfare program is restricted to extent.
Those who have Card can only buy from specific supermarkets and cannot move from one state
to another for shopping. Even the schools they can take their children to are restricted by the
card.
Financial aggravation
It has been recorded that income management has considerably condensed financial
harassment of indigenous people of Australia. For example, among the Aboriginals, the cases of
money lending leading to other problems have significantly gone down meaning that there is less
financial frustrations from other people (Altman, 2016). Problems related to giving money and
asking for money had statistically reduced among the indigenous people irrespective of whether
on compulsory or voluntary income management program.
The income management has affected a number of indigenous people in many ways
however it can be reported to have weaknesses that hinder its effectiveness as well as strengths
that can be capitalized on to raise the living standards of the indigenous people of Australia. The
weaknesses of the program are as discussed below;
Weaknesses of the CDC Trial
Exemption application
It is difficult to draw the boundary when applying exemptions. With the wide range of
youth disengagement and a wide range of parenting, it is pretty difficult to determine which

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES
12
group to be left out of the program. Even the formula used to determine regions to be included in
the program is not clear. Very few individuals have knowledge about the application for
exemption since there is no information to that effect. The system assumes that criteria for
exemption is related to good management of finance. Those seeking to apply for exemption have
been turned down by the Centerlink thereby failing to address legislative procedures.
Limited acceptance by retailers
The BasicCard is not widely accepted, there are very few retailers in country who accept
the card for any transaction thereby giving the users hard time of looking for specific retailers
they buy from using the card.
Vulnerability of the system
The income manage system is vulnerable to manipulation by the users. The users can
easily go around the system and evade its purpose for example a passenger using a tax may
collude the taxi driver to overcharge then the balance is given to the passenger in form of cash.
Also some retailers have used it to authorize sale of drugs then failing to give receipts for
evidence.
The problem of ascertaining the balance
The users are not able to check their income balances using the card. This raises the
problem budgeting. Those on income management have struggled to engage on transactions for
which their BasicCard balances cannot allow. The people are at most risk when their balances
are running low without their knowledge.

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The problem of sharing resources
Among the indigenous people, families and relatives share resources almost at all-time
therefore, this poses a big challenge among the users of BasicCard. The system does not
recognize sharing of resources but only recognizes the user of the card (Flagon, Herbert, Gibbs,
Swinburn, Keating, Waters & Moodie, 2013).
Exiting the system
Moving a customer off the management of income system is not easy. Some people
among the indigenous groups already know how to manage their finances hence it is useless
having them in the system. But the system does not have such options of letting such people off
the system even when they relocate to other prescribed areas.
Community differences
Communities are different in terms factors that affect them as well as their needs. The
system needs explain such differences so that the income management is applied when
circumstances surrounding a given community are suitable for its total application
Risks of losing financial management skills
Even though the government seeks to impose financial management on the people, the
members may actually lose their management skills in the process of undertaking the scheme.
People will be used to income management to the extent that they lose their management skills
since payments for their bills are done automatically without the stress of having to sit down and
allocate money for different needs and identify how much to spend on specific projects
(Evaluation of New Income Management Report in the Northern Territory, 2016).
Other weaknesses
 Parents were not able to send money to their children living in school.

REPORT ON IMPACT OF INCOME MANAGEMENT IN INDIGENOUS COMMUNITIES
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 Users are not able to accumulate funds so as to acquire expensive items.
 Users could not buy used products.
Strengths
To some extent, is has been used to assist communities to overcome challenges of drug and
alcohol as well as gambling addiction.
CDC Trial has also reduced expenditure on alcohol, drug and gambling by recipients by way of
limiting access to cash.
Concerns of Human Right
It has also been recorded by fellow workers that countless of them have experienced deep
feelings of stigmatization, humiliation and inferiority for having their money managed on their
behalf.
Project Cost
The piloting program is expected to cost tax payers about $ 19 million in which Indue Company
was to be paid about $ 7.9 million. This would cost $ 10,000 per person who participates in CDC
(CDC Trial Evaluation Report, 2017).
Conclusion and Recommendations
The impact of income management program on the indigenous people of Australia is to
some extent very beneficial however there various limitations that need to be worked by the
Leader of Opposition and the Minister for Indigenous Affairs and Aboriginal and Torres Strait
Islanders so as to successfully improve the lives of the indigenous people.

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Income management has been praised and fewer resentment have been reported
by those who willingly join the scheme of welfare payment compared to the group that have
been forcefully signed up. Income management would probably work out for families that
willingly involve in other services and are determined to have their behavior changed. However,
families with complicated needs and continued engagement with child protection issues may
have very little to benefit from income management as it may have been looked forward to from
the beginning (Bielefeld, 2014).
Therefore, income management focused on protecting the child may not very effectively
address social problems of the entire indigenous groups of people in the prescribed areas of the
country or promote sustainability in behavior change of the individuals (Smith, 2015). Income
management, if it should be implemented, then it be given out to the deserving indigenous
people not as a policy but as a service package that supplements other measures to holistically
address the social needs of the disadvantaged children and communities. As there may be a
hindered access to better services in such rural communities, it is proportionate to receive a
limited positive result from such remote areas. It is crucial to carry out individual valuation and
community differences keenly taken into account on the welfare program before voluntarily or
forcibly introducing them to income management so as to ensure that it is suitable for their
environment and circumstances and the required services need to be in place before such an
exercise is carried out by the government (McClure, Sinclair & Aird, 2015).
Considering the numerous positive impacts of income management, it is still invalid to
conclude that compulsory income management program is a feasible method to tackle child
protection disputes with other measures left out. Income management in its present state, may

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not achieve much as far as its objectives are concerned (Humpage, 2016). We therefore
recommend that the Leader of Opposition and the Shadow Minister for Indigenous Affairs to;
 Explain the aims of CDC and apply the countless options available to address the aims of
Cashless Debit Card.
 Ensure an all-inclusive participation in developing strategy for addressing issues of
alcohol consumption, addiction in gambling as well as child protection.
 Make CDC voluntary assisted by adequate funding and other services
 In all the prescribed communities, ensure focused economic growth so as to realize
employment

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References
Agrawal, A. (2014). Indigenous and scientific knowledge: some critical comments.
Anthropology Indonesia.
Altman, J. (2016). Blind‐sided by Basics: three perspectives on income management in an
Aboriginal community in the Northern Territory. Australian Journal of Social Issues,
51(4), 487-502.
Bielefeld, S. (2014). Compulsory Income Management and Indigenous Peoples-Exploring
Counter Narratives amidst Colonial Constructions of Vulnerability. Sydney L. Rev., 36,
695.
Bielefeld, S. (2014). Compulsory income management, indigenous peoples and structural
violence-implications for citizenship and autonomy. AILR, 18, 99.
Bielefeld, S. (2014). Compulsory income management, indigenous peoples and structural
violence-implications for citizenship and autonomy. AILR, 18, 99.
Bielefeld, S. (2014). Income management and Indigenous peoples: nudged into a Stronger
Future? Griffith Law Review, 23(2), 285-317.
Bray, J. R., Gray, M., Hand, K., & Katz, I. (2014). Evaluating new income management in the
Northern Territory: final evaluation report. Social Policy Research Centre, University of
New South Wales.
Bray, J. R., Gray, M., Hand, K., & Katz, I. (2015). Compulsory Income Management in the
Northern Territory–evaluating its impact. Australian Journal of Social Issues, 50(4), 373-
396.
Curtin, J. (2016). Australia. European Journal of Political Research Political Data Yearbook,
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Dee, M. (2013). Welfare surveillance, income management and new paternalism in Australia.
Surveillance & Society, 11(3), 272.
Evaluation of New Income Management Report in the Northern Territory,
http://caepr.anu.edu.au/sites/default/files/cck_misc_documents/2014/12/
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Flego, A., Herbert, J., Gibbs, L., Swinburn, B., Keating, C., Waters, E., & Moodie, M. (2013).
Methods for the evaluation of the Jamie Oliver Ministry of Food program, Australia.
BMC Public Health, 13(1), 411.
Humpage, L. (2016). Income management in New Zealand and Australia: Differently framed but
similarly problematic for Indigenous peoples. Critical Social Policy, 36(4), 551-571.
Lovell, M. E. (2016). The normalisation of income management in Australia: analysis of the
parliamentary debates of 2007 and 2009–10. Australian Journal of Social Issues,
51(4), 433-448.
Mendes, P. (2013). Compulsory income management: a critical examination of the emergence of
conditional welfare in Australia. Australian Social Work, 66(4), 495-510.
Northern Territory, Department of the Attorney General and Justice, 2016
Parkinson, S. (2015). The Effectiveness of Child Protection Income Management in Australia.
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Reference Group on Welfare Reform (Australia), McClure, P., Sinclair, S., & Aird, W. (2015). A
new system for better employment and social outcomes: Report of the reference group on
welfare reform to the minister for social services. Department of Social Services.

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Review of the Cashless Debit Card Trial and Evluation,2017. .
https://www.qcoss.org.au/sites/default/files/QCOSS%20Review%20of%20the
%20Cashless%20Debit%20Card%20Trial%20and%20Evaluation.pdf
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Vedung, E. (2017). Public policy and program evaluation. Routledge.