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Direct debited social solutions

By Andrew Laming - posted Wednesday, 10 May 2006

It is the new battlefront for the Australian welfare system. Imagine Centrelink debiting pensions where parents fail to feed, clothe or educate children. Noting that alcohol, drug use, gambling and violence still ringfence many isolated families from Australia’s current prosperity, Families Minister Mal Brough backed direct debiting welfare payments to ensure neglected children were protected, at the April 29 Social Innovation’s Dialog.

Catholic Social Services Australia CEO Frank Quinlan found “blaming welfare recipients for their own circumstances” offensive, claiming it “strips them of any remaining dignity in the face of poverty and hardship”.

But Brough has his allies. Writing in Prospect Magazine, New Labour’s John Denham describes the ‘Fairness Code;’ a set of obligations and opportunities which reward "good" behaviour, contributions and earned rights and punish the "bad". Public services should be for people who are entitled, needy and use them responsibly. Conservative David Willett noted that as lifestyles became more differentiated, it becomes more difficult to (legitimise) a universal risk-pooling welfare state. People ask, “Why should I pay for them when they are doing things I wouldn't do?”


With child protection an unquestioned priority in Australia, surely direct debit is preferable to confiscation of children by the state in cases where poor life skills contribute to mild neglect. Rather than the welfare lobby’s knee-jerk reaction, focus should be upon whether such intervention is morally justified and if so, whether it actually works.

The welfare lobby is wrong to describe the proposal as “a return to coupons (and being) singled out in supermarket queues”.

First, EFTPOS technology means that deductions can occur without stigmatisation. Second, far from being a nanny state, the deductions are merely funding what everyone else pays anyway; utilities, rent and nutrition. The deduction can always be cancelled when the situation improves.

The welfare lobby counters with the need for “comprehensive reform of welfare and marginal tax rates”. True, Australia’s welfare payments make part-time work less appealing. But the alternatives are worse: lower pensions hurting poor people or slower tapering leading to more middle class welfare.

The welfare lobby can’t have it both ways. An imperfect tax system should not be a smokescreen for inaction on neglected children at family level. Fear of humiliation for those breaching norms must to be balanced with the suffering of their dependents.

ACOSS is even more inconsistent. Lin Hatfield Dodds noted last month that while vulnerable families make correct decisions most of the time, all deserve access to housing, education, health and childcare. But where children are deprived, she rejects case-by-case interview and direct debit as a way to achieve those goals.


While few disagree that denying children food and schooling is repugnant, Brough needs to gain community support by explaining precisely how and when Centrelink would flex its muscle. Neglect can manifest itself materially, emotionally and psychologically. How cases are identified is critical, because direct debiting will impact differently upon people who are mentally ill, those who are addicted or sociopathic, compared to well-meaning recipients who merely lack life-skills.

One concern is that subsuming essential family spending exacerbates matters, if the remaining family budget is aggressively diverted into antisocial practices. All the rent, power and school lunches in the world can’t protect children from appalling home situations.

Additionally, Centrelink intervention will unfairly single out welfare recipients, leaving workers exempt. Beveridge, the father of British welfare, would have countered that the middle class only pays for the welfare state if they share in its benefits. That includes minimising the social cost of malnutrition, child neglect, youth disengagement and unlawful behaviour.

If Brough is right that untied welfare inadvertently presents dysfunctional families with the means for their own destruction, only randomised and controlled research in the Australian setting can clarify whether welfare debiting is the next big thing or an exercise in futility.

What is for sure is that after the first round of a comprehensive community debate, the welfare lobby has been a little too slick in their dismissal of Brough’s proposals. Should the Cape York Institute and other Indigenous-led interventions report encouraging results, the welfare lobby must then decide whether it will support expanded trials. Even more controversially, could such strategies be viable across mainstream Australia, which so often differs only in its ability to conceal familial dysfunction.

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About the Author

Andrew Laming is the Federal Member for Bowman in Queensland and the Shadow Spokesperson Regional Health and Indigenous Health.

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