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What does compulsory income management teach us about ourselves?

Posted By lachlan On January 4, 2012 @ 11:45 am In Social Justice | No Comments

By Sally Cowling -

The past 25 years have seen a pronounced shift in the conduct of welfare policy and the way we speak of those who receive income support. Welfare is now a creature that will foster ‘dependence’ in the absence of the growing raft of requirements, suspensions and sanctions designed to change the dysfunctional behaviour of particular individuals and communities.

It has been a long time since we discussed what a welfare system which fosters human dignity and agency looks like. We seem to be afraid of conceptual foundations that are both meaningful and demanding. At the same time, we have been content to roll with a paternalistic and punitive tide of welfare reform without questioning its efficacy, assumptions or morality. In this piece I’d like to ask these questions of Compulsory Income Management (CIM) to make the case for a new conversation on welfare policy. But first, let’s put the policy in context.

CIM requires that between 50 and 70 per cent of income support and family payments are spent on ‘priority goods and services’. People subject to CIM(or who sign up voluntarily) are issued with a BasicsCard which determines where they can shop and what they can buy. CIM first appeared on Australian shores as part of the Northern Territory Emergency Response. In 2010, the Labor Government introduced a New Income Management model which did not discriminate on racial grounds.

Instead, income support recipients in the Northern Territory, parts of Queensland and Western Australia, who were part of a particular risk category (the long-term unemployed, disengaged young people, the financially vulnerable or people referred by a child protection worker) were subject to CIM. Income management has also been part of the Cape York Welfare Reform trial but is imposed as a last rather than first resort. In July 2012, place-based income management will be introduced in Bankstown, Shepparton, Playford, Rockhampton and Logan (areas characterised by pronounced socio-economic disadvantage) for the child protection, financial vulnerability and voluntary streams.

So why is the roll out of CIM a matter of concern? Let’s start with considering moral questions. In a 1998 article published in the Boston Review, the American philosopher Martha Nussbaum explores what Greek tragedy can teach us about the alliance between sympathy for weakness and respect for human agency. For Nussbaum, this requires us to have compassion for those in trouble, to understand the causes of life’s ills and to recognise that when we are struggling, our very human needs for friendship, connection and respect remain strong.

She states:

It is so strange that we so often speak differently about the poor, suggesting that cutting off basic social support is a way of encouraging agency in poor mothers and children and improving their character, rather than a way of stifling agency, or stunting it before it gets the chance to develop. If we do respect agency and its dignity, we owe it a chance to develop and flourish.”

The needs of families where children are at risk of abuse or neglect; of communities where socio-economic disadvantage is entrenched and opportunities few; of individuals where addiction has created financial vulnerability or distress, are rightly the concern of government. But genuine concern and policy responses realise change must start by asking how we can best support agency to develop and flourish. What is required of us so that the resources and opportunities needed to address pronounced structural inequalities are available to all? How do we work with individuals, families and communities so they are empowered to make change? What is the nature of very complex problems and what works to address their root cause or causes?

In 2010, FAHCSIA commissioned a paper by Jacqueline Homel and Chris Ryan which explores what studies from psychology, behavioural economics and procedural justice teach us about the way in which people receiving income support respond to government incentives, edicts and sanctions designed to change behaviour. The authors found that the intrinsic motivation to change would only be activated and maintained if conditions satisfy “basic human needs for relatedness, competence and autonomy”. It is imperative that all of us working with those in need create environments where people can understand and work through how and why they want to change, are offered choices and access to necessary services and supports, and feel respected and cared for.

I would argue that as a welfare policy designed to motivate behavioural change, CIM fails all of these tests. On top of that, the evaluations published to date are poorly designed; provide no evidence that change is being realised and some evidence that the ‘dependency’ so troubling to both sides of politics is being entrenched. For example, the evaluation of the income management trial in WA showed a worryingly low take-up rate for financial counselling services. Many people didn’t know about the service but many didn’t see the point of developing money management skills when they had a BasicsCard. The ironies abound.

The decision to expand the march of CIM into five new locations is unfathomable. When resources are so desperately needed for the programs and approaches which do make a difference to families where there are child safety issues or to break the vice of alcohol or substance abuse we cannot afford to dedicate precious funding to failed, but expensive policy options like CIM.

It is time for a new national conversation on welfare policy that speaks with people receiving income support. We must also ask ourselves whether we are committed to understanding the difficulties of others, the supports we would need and want were we in similar circumstances, and whether we still see dignity and agency as the foundation stones of our welfare system.

We need to focus much more attention on what works and how we work to build policy settings, systems and programs that promote “relatedness, competence and autonomy”. This is not just a challenge for government, but for all of us. As neighbours, practitioners, community organisations, researchers and peak bodies the time has come to think more imaginatively and respectfully in the welfare policy domain than we have done for a long, long time. A commitment to human dignity, agency and wellbeing demands this.


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