Tuesday, July 23, 2024

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Income management misses mark: Report

Income Management, with the BasicsCard as its major tool, has made little difference to alcohol sales, and “rather than building capacity and independence, for many the program has acted to make people more dependent on welfare”.
The current, same size fits all strategies following the Intervention in the Northern Territory has not enough “working with individuals and tailoring the program to their needs.
“Building capacity is a challenging process that requires time and resources, and it cannot be developed by simply imposing restraints.
“Measures of well being at the community level show no evidence of improvement, including for children.”
That’s the dim view expressed in a long-awaited report by the Social Policy Research Centre of the University of New South Wales, which was commissioned by the Australian Government Department of Social Services.
“There was no evidence of changes in spending patterns, including food and alcohol sales … for those on compulsory income management [and] spending on BasicsCard on fruit and vegetables is very low.”
The reports says 41% of participants want to get off the program and 45% want to remain on it. This figure is much higher for people who have volunteered for management.
The report did not find support for the common belief that Aboriginal women are predominantly for Income Management, and men against.
The head of the evaluation team, Professor Ilan Katz, says amongst Aboriginal participants in the scheme “we did not find much of a difference between men and women” in their attitudes towards Income Management.
The report says: “Many of those on income management want to remain on indefinitely.
“The main reasons people gave were that it was easier being on income management, it was easier to manage their money, that they are used to income management and it is easier to stay on, and that they liked having the BasicsCard.
“Around two-fifths of people on income management thought that it had made things better for them; about one-third thought that it had made no difference, and about one-quarter thought that income management had made things worse for them.
“These mixed sentiments were reflected in many other areas, with substantial groups reporting that they felt more in control of their lives and money and that it was good for their children, and substantial groups reporting the opposite.
“A substantial group of people subject to income management felt that it is unfair, embarrassing and discriminatory.”
The program appears to be failing where it needs to succeed most: “New Income Management appears to have encouraged increasing dependence upon the welfare system,” the report says.
“The tools which were envisaged as providing them with the skills to manage have rather become instruments which relieve them of the burden of management.
“While at one level, and for some groups, this may still be seen as a positive outcome and one which they report as having improved their quality of life, more broadly it also comes at a cost of greater dependence.
“Program elements designed to build financial capabilities have not been successful.
“Despite over 29,400 people having been on the compulsory measures, only 1,139 people (4%) had completed an Approved Money Management course, and 31 had obtained a Matched Savings Scheme Payment.
“There was no evidence of any overall improvement in financial well being, including reductions in financial harassment or improved financial management skills.
“Data was collected on the incidence of problems in families due to alcohol, drugs and gambling. This was analysed as to whether there were any problems, and whether there were severe problems.
“All the groups reported a relative reduction in the incidence of there being any problems, but no change or an increase in severe problems.
“Only those on Voluntary Income Management reported a relative reduction in alcohol problems in their family, but, along with others, no improvement in problems with drinking in their community.”
Income management was first introduced in the NT in 2007 as part of the Federal Government’s Northern Territory Emergency Response (NTER).
The main form of income management currently in place is “New Income Management”, which was introduced in the second half of 2010.
“While income management has been implemented in a number of other locations in Australia, it is only in the Northern Territory that the program is primarily composed of a compulsory component, which is simply linked to duration on payments and is implemented on such a large scale,” explains the report.
Indigenous people make up 90% of those being income managed. It is estimated that 1.3% of non-Indigenous people and 34% of Indigenous people aged 15 years and over living in the Northern Territory are subject to income management.
The BasicsCard can be used in approved stores and services to buy non-prohibited goods and cannot be used to withdraw cash.
Some 35,000 people have been subject to income management in the Northern Territory since the introduction of New Income Management.
In December 2013, 18,300 people were income managed. Of this total, 77% were on the main compulsory measures, and 20% were on Voluntary Income Management.
Income management appears to have been relatively successful in ensuring that the income managed portion of income is not spent on proscribed items, says the report.
“Expenditure of these income managed amounts, however, covers a very wide range of commodities and services, with no particular emphasis on the narrow set of ‘priority needs’ identified in the policy objectives of the program.
“Significant problems reported with the BasicsCard include the imposition of minimum purchase limits, surcharges on the use of the card, and the limited number of outlets at which it could be used.
“Merchant approval meant that many people reported having to purchase items at higher prices at approved merchants.
“The payment of rent was a major problem for some people in urban areas in a range of situations, including group housing and where landlords sought cash payment.”
PHOTO: Yuendumu store, where the basics card can be used.


  1. There are a couple of points in this that need clarifying. It is unfair to assume that those who are on it don’t know how to manage their money.
    Some who are on it are on it because of circumstances beyond their control e.g. death, unemployment, sickness. The welfare payments are below the poverty line and if one is ill and not able to work other options are there.
    It is a well known fact and has been for many years that those that are alcoholics cannot be forced to go off the alcohol but rather have to have the desire to do it for themselves.
    Also limiting alcohol to alcoholics often turns them to other substance abuse or if they cant buy alcohol then they end up stealing to get the money to do so.
    The limitations of the basics card are often disastrous for people who have already excellent knowledge of money management and savings principles.
    They lock a person into set management and companies but if the person sees something better they cannot access it because basics card is not accepted at a lot of places.
    The assumption that fresh food is best is not true in Central Australia as often food is transported long distances and not at its best buy the time it gets to the shops. Also, often chemicals are used to grow fresh food and then absorbed into the body when eaten. Over the long term it is as bad on health as preservatives.
    On the whole income management for a lot of people is disastrous especially when the blanket approach is used.
    It does not take into account the varying levels of knowledge of the people concerned and the varying reasons why the people concerned are unemployed or having problems coping.
    Income management is also so hard to get off. You can be doing really well for years yet Centrelink wont let you off it. In some cases when people are put on it because their children are not at school it is not the parents’ fault – this applies in particular to older children who can manipulate the system to get their parents under their thumb and the parents don’t have any right of reply.
    In other words it can let the children punish the parents if they cant get their own way.

  2. Income management. Basic cards encourage the ability to manage a quality of life.
    This is what we all want and are attempting to achieve for others. Money makes the quality of life easier to achieve.
    Without knowing the value of money, or ever knowing the purpose of money and not having the education, some people will be in the space of disadvantage for a long time.
    The article by Peter Latz on Art touches on the world of knowledge about the “deep memory” existence of Aboriginal people in Central Australia that was present. Acknowledging that the true form of aboriginal drawings / art were a very important part of life that linked people to country through art.
    Economic sustainability was a fully implemented and practiced procedure by Aboriginal people.
    Time after time, year after year it meant sitting down for “business “to encourage the stimulation and growth of our foods.
    These required the practicing and learning of songs and dances to sustain the world of the Aboriginal economy. In hard times of drought, the rain men were sought after to stimulate the economy by sitting down for “Business” to encourage fresh growth for all living in the world.
    Aboriginal people were continually “stimulating the economy through ART that required a song to be sung, which required a dance had to be danced!”
    This procedure was fully detailed and followed accordingly to the Altyerre!
    Business that was born straight from the Altyerre (dreaming) was continually practiced.
    Business was kept in safe places (caves) and the business had an owner (boss) and the business had a caretaker (manager) and the objects belonged to a country.
    Skin names made up the whole world and the world came from the Altyerre! Skin groups carried out different duties according to the law.
    Aboriginal people’s economic development depended on this process, continuation of teaching, knowledge about songs to encourage the fruits to grow, the animals to breed, the songs to bring rain to re-generate the country so all plants and animals could prosper were taught and continually practiced.
    The Aboriginal world sustained the economy by practicing these procedures, year after year.
    Slowly the ability to sustain an “economy (drawings, songs, dances) to re-generate growth” that required the “deep memory” knowledge that sustained the economy has diminished. Or is no longer required.
    Aboriginal people have no need to live under the strict teachings and protocols that once governed each tribe to sustain life.
    It was and still is a very demanding form of learning and there are so many obstacles in the way now. The basic card is something that has to be understood and the purpose of it is, to give people a better quality of life.
    Without education, it is easier to be managed then to manage one self.

  3. Michael: From my observation the failure of the basics card is not that people don’t understand what its purpose is.
    They understand but reject the changes that make the card worthwhile.
    That’s why those on Voluntary Income Management, that is, those who wanted to change, reported a relative reduction in alcohol problems in their family, but others showed no improvement.
    It was always simplistic to think that the basics card was going to change lives. Predictably, Aboriginal people have not handed over control of their lives to government as had been planned for them.
    Irrespective of value judgements regarding their lifestyles they have resisted changes to them, by “misusing” the basic card.
    There are very different cultural norms at play here and no amount of education in the use of the card will be effective.

  4. Perhaps for to many, the start of real education is living in unit / house, with needs to regularly pay rent, electricity, phone, other costs, then survive with remaining money for food, furnishings, etc.
    Those NOT accept these costs, can live under a tree.
    Worst NT examples remain the ALR(NT) Land Trusts refusing accept responsibility for their houses, buildings, other facilities.
    As landowners they are the landlords, bad landlords ignoring their responsibilities.
    Enabling such ongoing landlord negligence does not help their tenants.
    Until Commonwealth fixes these Commonwealth created landlords, why pick on their tenants?


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