Punishing poverty

Recent legislation introduced by the Federal Government sees welfare recipients across the Northern Territory lose control of at least 50 per cent of their income.

The Income Management bill, passed in the dying days of Parliament before the winter recess, is the first step in introducing a national welfare quarantining scheme.

Family, Community Services and Indigenous Affairs Minister Jenny Macklin introduced the bill with the hope that welfare payments will be spent on essentials like food and utilities, instead of alcohol, tobacco and gambling.

“The reforms aim to increase parental responsibility, fight passive welfare and protect vulnerable people especially children,” the Minister said.

But welfare groups haven’t been so quick to applaud the scheme. More than 90 submissions were given to the government opposing the reforms, with only two submissions supporting it.

"This poorly targeted, expensive scheme is a gamble with the daily lives of people on the lowest incomes, and a gamble with taxpayers’ funds," CEO of ACOSS, Clare Martin said.

With a national scheme on its way, sole parent Petra Hilton of Hornsby, Sydney is concerned that the government’s scheme will make living on welfare payments more difficult.

“It’s like the government is assuming that because I’m a single mother it must mean that I am a bad person who drinks and smokes and can’t look after her kid. It’s just not the case,” she said.

Petra says the money she receives on the parenting payment is spent on essentials like groceries and utility bills, leaving little money at the end of the week for luxuries.

“Sole parents like myself are canny shoppers because we have to be,” she said. “We get the grocery catalogue each week and my son knows he can’t ask for anything that’s not on special.”

Petra said that losing control of at least half her weekly income would impact her 13-year-old son the most who regularly needs dental work.

“Children of sole parents are already being forced to live in poverty and now the government is making it clear that their family is different to everyone else’s,” she said.

While Income Management will impact people who receive Youth Allowance and other benefit payments, welfare groups are concerned that sole parents will be hurt the most.

Unlike other welfare recipients who are expected to remain under the scheme for short periods of time, many sole parents with young children will effectively remain under the scheme for a long time.

Chair of the Women’s Electoral Lobby, Eva Cox says these measures will force many people on the parenting payment or Newstart Allowance to request an exemption in order to retain control of their money.

“It will impact on the mass of sole parents who will have to either accept having half of their income controlled or prove that they are good mothers,” she said.

Exemptions for sole parents include proving that you are a responsible parent, where parents with pre-school age children (48 months) must show that their child is enrolled in structured activities such as childcare or play groups.

“Mothers who support their children by spending time with friends or informal playgroups … it appears would not be considered ‘structured activity’ and therefore would not meet the responsible parenting test,” Terese Edwards, CEO of National Council for Single Mothers and Their Children said.

Income Management is a part of Labor’s new approach to welfare reform that seeks to extinguish passive welfare. In a speech to Parliament the now former Prime Minister Kevin Rudd said the legislation is a part of the government’s commitment to moving people from welfare dependency to a more active role such as working.

“We are of the view that welfare should not become a way of life for any Australian and that encouraging welfare dependency helps no Australian,” Mr Rudd said.

The program is an amended version of the measures introduced as a part of the Northern Territory Emergency Response initiative, already spread across 73 Indigenous communities.

While Minister Macklin has indicated that a national roll out of income management would not occur before late 2011, opposition leader Tony Abbott has said that if elected he would implement a national scheme immediately.

Despite introducing legislation that now applies 20,000 welfare recipients in the NT, the Federal Government is yet to produce any solid evidence to suggest that managing a person’s income will influence their purchases of fruit and vegetables.

Prior to the government extending Income Management to all welfare recipients across the NT, the Menzies School of Health Research released a report that examined the impact of the scheme on store sales.

It found that compared with store sales 18-months before Income Management, the scheme “had no beneficial effect on tobacco and cigarette sales, soft drink or fruit and vegetable sales”.

Within its findings, the report states: “… our study showed that across 10 stores in the NT, income management had no effect on fruit and vegetable sales or turnover, contrary to results reported in official reports. The average daily turnover of fruit and vegetables throughout the 18-month income-management period was about 152gm per person.”

Senator Rachel Siewert of the Greens said the government’s current evidence is based on poor consultation.

“Their evaluation process is this: ‘Let’s ask the people who are already subject to income quarantining whether they think their kids have put on weight or are eating more.’ When half of the 76 people they have asked - of the over 15 [and a half] thousand people who are quarantined - say yes, that means that income management is working,” Senator Siewert told the Senate (PDF 963KB) last Monday night, an hour before the bill was passed.

Irrespective, the government has allocated $410 million over five years to manage the 20,000 welfare recipients, which equates to approximately $5,000 per person income-managed, each year: or ten times what that person would receive to help them get a job.

Currently, Income Management applies to all people under 25 who have been on welfare for more than three months or people over 25 on welfare for a year.

Head of the Sole Parent’s Union Kathleen Swinbourne said she is concerned about the new policy direction. “There is a great deal of Australian and international research that shows that the more impositions you put on people, and the more you reduce their autonomy, the worse the outcomes for them and their children.

“This legislation appears to be punishing people for being poor, rather than helping them to run their own lives and care for their families,” she said.