A Report on the Effectiveness of Income Management in Australia

This comprehensive report evaluates the impact of income management programs, particularly the Cashless Debit Card (CDC) trial, on Indigenous communities in Australia. The study examines the historical context of income management, tracing its origins to address social issues such as alcohol abuse, drug use, and child neglect. It defines the CDC trial, its objectives, and the methods used to assess its effectiveness. The report analyzes the results of the evaluation, including the impact on hostile behaviors, household finances, attitudes, alcohol consumption, child enrollment in school, and the well-being of children. It also discusses the strengths and weaknesses of the income management program, including concerns about human rights, financial aggravation, and community differences. The report concludes with recommendations based on the findings, aiming to provide insights into the effectiveness of income management policies and their implications for the economic and social well-being of Indigenous Australians. The report also acknowledges the various sources and references used in the analysis.

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.

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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.

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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
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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.