Federal parliament this week passed laws that will subject non-Indigenous welfare recipients in the Northern Territory to income management for the first time. If the program is a success, the government will also extend the policy – which sees a proportion of a person’s welfare payment quarantined for essentials such as food – to other parts of Australia.
This historic shift puts one more nail in the coffin of passive welfare. There is now a bipartisan consensus about the need to make welfare more conditional. Income management also ends the discrimination towards Indigenous residents of the Northern Territory.
Yet the road ahead may still be rocky. The original policy, which was part of the Northern Territory Intervention, aimed to increase the consumption of healthy food and reduce the amount of welfare money spent on grog and drugs. On this front, the policy had reasonable success. But the government has now started trumpeting a much more ambitious claim that income management will reduce welfare dependence.
It will be difficult to measure the program’s effectiveness against such a broad criterion. The phalanx of welfare organisations who have already come out fighting will use this to claim that the policy is ineffective. The government must make sure that income management doesn’t overpromise and under deliver.
Another danger is that extending the policy will give birth to yet another expensive, but ineffective, welfare bureaucracy. There is a risk that in trying to take a nuanced approach, so many exemptions will be granted that the policy becomes meaningless. Income management cannot be allowed to become an expensive toothless tiger.
Policies that suit remote Indigenous communities may not be right in an urban setting and vice versa. Qualifying for an exemption from income management may be difficult for some parents to meet – in many remote areas, there is no kindergarten or preschool in which to enrol your child to become exempt from income management for being ‘a good parent.’ There are so many variables between different communities that a one-size-fits-all approach may not work.
Minister Jenny Macklin must be prepared to change course if the program appears not to be delivering results and value for money.
It does appear though, that Macklin is aware of these risks. She plans to expand the program gradually and has built in a review process. But she must explain to the electorate that the policy is a work in progress and may be adjusted as time goes on.
Paternalistic solutions like income management may challenge liberal principles, but all agree that unconditional welfare has been an unmitigated disaster. While the risks of teething problems are high, income management has the potential to be a game-changer.