Impact Of Income Management Policy And Cashless Debit Card Trial On Indigenous Australians: Essay.

Definition of Cashless Debit Card Trial

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 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.

Sites of Trial

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.

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.

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.

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

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).

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.

Objective of the CDC Trial

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.

This evaluation will try and show the effects of service treatment and restriction of alcohol.

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).

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.

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.

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).

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.

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 Islanders Health Survey indicate an increase in fruit consumption by children from indigenous communities as a result of nutrition program in school (Parkinson, 2015).

Reason for Evaluation

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.

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;

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 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.

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.

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 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.

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).

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.

Methods of Evaluation

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

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).

• Parents were not able to send money to their children living in school.
• Users are not able to accumulate funds so as to acquire expensive items.
• Users could not buy used products.

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.

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.

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.

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 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

References

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