Proving yourself to Centrelink

How many of us could justify how we spend our money to a middle level officer from Centrelink? How do we prove we are engaged with our community and responsible in our spending? What about the utilities bill that we paid late or the bargain case of booze with Christmas coming up? How do you prove that you bought heaps of fruit and veg at the local market and that is why the supermarket bill covers less healthy crap? Most of you won't have to but the government is planning to require sole parents, the unemployed and the young on government payments to prove they are not wasting money and are not isolated or have half their payments put onto a basic card, useable only in designated stores.

This proposal is a slight improvement on the current model applied to 73 Indigenous Northern Territory communities. There, everyone on income support, including age, disability and veterans' payments, found they had lost control over half their payments and all bonuses. This was justified by claiming it would reduce risks of violence to women and children, as this was the claimed basis of the emergency measures. This scheme did not allow any exemptions to those without children, or those who were responsible parents. This required the Racial Discrimination Act be suspended to allow this unfair process to be introduced and not be challenged.

As the government has promised to reinstate the RDA, it has now proposed extending the process to non Indigenous communities, with high levels of disadvantaged residents. The proposal is to exempt veteran, age and disability pensions but target the less politically popular unemployed and sole parents, and allows those people that can prove their bona fides to ask for an exemption. It will start next year in the NT and then be extended to the rest of Australia.

Is Closing the Gap to be achieved by reducing non Indigenous advantage by extending to a wider population the lack of dignity that has already being felt by the prescribed community residents? The government's own data on the NTER shows few respectably valid indicators of improvements in nutrition and living standards, or reduced alcoholism and violence, despite their claims. It currently covers about 8,000 recipients and recent consultations identified many problems in its administration, let alone the shame and anger of those who feel stigmatised by being included.

One of the main interesting findings of the social determinants of health is the importance of a sense of agency. It is hard to find an example of a policy that robs people more of any sense of autonomy or control than nannying their spending.

Melissa Sweet has raised the health consequences of this initiative and we need to assess the cost benefits of maybe a bit more fruit and veg versus feelings of impotence and shame.

Sir Michael Marmot, in his work on health outcomes, defined a new factor in the incidence of stress in adults as being control of destiny, i.e. that if people have a sense of mastery in their lives, and the commitment to their job, without feeling imposed upon, enforced or restricted by their superiors, they are much more likely to be successful and healthy.

Newer data from Richard Wilkinson (The Spirit Level) shows that perceptions of inequality are more toxic than poverty, probably because they generate anger at unfairness. In the absence of any direct data, it is likely that this income maintenance and other controls are increasing stress and damage well beyond the benefits that are claimed and not proven.

Then there are the serious doubts that Centrelink can manage the massive increases in workload that such changes suggest. This is an organisation that already has problems dealing effectively with its large and complex workload but is about to be lumbered with 12,000 more “customers” in the NT for income maintenance and maybe in 18 months with 100,000 more.

Can you imagine what it would be like arguing your needs or proving your character to the satisfaction of a stranger in an office?

Centrelink makes many mistakes with payments and legal advice. It was forced to overturn more than a third of its decisions because staff continually get facts and legal advice wrong. Complaints surged 104 per cent in the last two years, making it the most complained about government agency in the country according to the Welfare Rights Centre. Appeals against Centrelink's decisions cost taxpayers more than $33 million a year.

Income maintenance in the NT has offered many more problems than benefits to many of its recipients. The Basics card, for instance, can only be used for certain purchases and in approved stores. This has caused many problems in the NT and advantages stores which capture local trade. No wonder they gave good reports on the Intervention, it adds to their profits.

Imagine extending this complexity to other populations and in big cities. It undermines capacity, if on a limited budget, to check prices and look for bargains. Tough! Sources are defined and you buy what they offer. No more chasing specials, buying from sales or finding stuff at Vinnies or garage sales.

Ever tried living on a very small income? I lived on a sole parent payment for some years while completing a university degree in the 70s. Making ends meet was hard so finding bargains became a way of life: second hand clothes for my daughter; a trip to the markets late to pick up cheap fruit and veg; finding cheap wholesale butchers and other sources of bargains.

I was a uni student with a child and an end in sight, but know others who are stuck long term on payments, trying to manage the tensions and constant crises of daily life. People need government payments to allow them to pay bills and survive while caring for children, upgrading skills, trying to find a job or dealing with a life that fails to leave time and/or energy for earning money.

Most are responsible and cope better than expected. In 2006 we surveyed some sole parents affected by welfare to work changes. They were a very mixed group: a few finishing studies, while parenting at a level that precluded sufficient paid work; others were coping with children who had difficulties with health and well being and needed intermittent attention that made regular paid work difficult. Others have been overly mindful of the traditional roles of motherhood and had left the workforce many years before to find themselves without a breadwinner in their late 40s.

A few were in their teens, some are well into their 50s. Some have little English, and good qualifications, some have little education in their countries of origins and few literacy of language skills. Few wanted to be on Centrelink payments, most want paid work and were employed when they could find appropriate work.

Soon those in NT will have their regular payments quarantined in the NT, closing the gap by exposing non Indigenous sole parents to the same unfair level of control that has been affecting Indigenous families. They will have to queue up with other stigmatised beneficiaries at approved stores and tender a piece of plastic to have certain types of purchases approved and maybe offer other money if they want to buy a beer.

This silly system has no evidence that it will, to quote Macklin: "protect children and families and help disengaged individuals. The Government is committed to progressively reforming the welfare and family payment system to foster responsibility and to provide a platform for people to move up and out of welfare dependence. The reforms will help fight passive welfare and mean that more money goes to food, clothes, rent and less money goes to buying alcohol and gambling."

There are serious questions whether this change will achieve any of the aims stated above. It hasn't done so in the NT, and extending it will find many more people failing to manage the Centrelink pitfalls of snakes and ladders. With the best of goodwill from all, there will be many that will not cope with extra bureaucratic processes, the surveillance and loss of dignity and control that is manifested already in the relatively simple NT example.

It is also expensive, more than $88 million has been spent on extra bureaucratic processes in the NT, alone, but not on the needed services that could really create change. Welfare agencies are mostly not supporting it: “it will demonise more people on flawed evidence that it benefits disadvantaged communities”, said a range of social service, charity and church groups.

This is an expensive piece of social engineering, playing into prejudices.