Ideas@TheCentre

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Why income management is not failing

Sara Hudson | 11 June 2010
In an unprecedented move this week, the federal government released a report refuting a Menzies Health Centre study on income management in Indigenous communities—showing how serious Indigenous Affairs Minister Jenny Macklin is about quarantining welfare payments. It also exposed the widening gap between the Rudd government’s approach to the Northern Territory Intervention (NTER) and the regressive attitudes of the Labor Party’s traditional supporters on the Left.

According to the Menzies study (published in the Medical Journal of Australia), income management is having no beneficial effect on healthier food and drink choices or on tobacco sales in Indigenous communities. Macklin’s conclusion that the study was ‘less than transparent’ is quite justified. The study focused on the sale of fruit and vegetables in only 10 remote community stores that also happened to be some of the best performers prior to the intervention. This bias ensured that any changes following the introduction of income management were less marked. This was advocacy-driven research of the worst kind based on an anti-NTER agenda.

Raw data showed a significant increase (45%) in the turnover of fruit and vegetables, which is more than four times the increase in sales of soft drink (9.8%). Ignoring this, the Menzies study made much of the fact that the sales of soft drinks and cigarettes had increased while falsely claiming that spending on fruit and vegetables had not changed.

Income management was introduced mainly to regulate the spending of welfare payments and partly to promote healthy food purchases. Store licensing, which was also introduced as part of the NTER, has helped to improve store management and the stocking of a range of healthy food.

But the intervention was never solely about boosting the consumption of fruit and vegetables, and it is ridiculous to judge its impact solely by that criteria.

Its most important goal, along with controlling alcohol and drug use, was to curb epidemic levels of violence and abuse. Alcohol restrictions and income management have reduced the number of alcohol related domestic violence offences. Drinkers may complain, but many women are happy because they have extra money for food and men can’t ‘humbug’ them for all their welfare payments. This is why Macklin is such a strong supporter of the program.

For the Menzies Health Centre to argue that income management has failed because some people are buying more soft drinks and cigarettes is absurd. Government should not be held responsible for what people buy. It is also a minor issue given the level of dysfunction in Indigenous communities.

Sara Hudson is a Policy Analyst at the CIS.