I were better to be eaten to death with a rust
than to be scoured to nothing with perpetual motion
Henry IV, Part Two, Act 1, scene 2.
A recent Working Paper[1] by CAEPR Research Scholar
Lisa Fowkes (link
here) provides a fascinating excoriation of the implementation of
the income support arrangements in remote Australia over the five years from
2013 to 2018.
This is a ‘must read’ paper for anyone with a desire to
understand the dynamics of remote Australian. It is also a perceptive analysis
of the ways in which national policies evolve, are made, adjusted and
ultimately expire.
The core of the paper is an analysis of the extraordinary
level of penalties and ‘breaches’ handed out to participants in the Community Development
Program (CDP). This program operates across around three quarters of the
Australian landmass, but has only just over 30,000 participants compared to the
700,000 plus Job Active participants in urban and regional Australia.
I will not attempt to summarise the paper in detail, but
instead will highlight a few of its most salient insights.
Fowkes begins by outlining the genesis of the CDP,
describing in detail the progressive shift from a relatively anodyne process of
unconditional income support (albeit not always made easily available) to the
current arrangements of hyper conditionality. These arrangements seek to
incentivise – in the jargon of policymakers – ‘job activation’ based on the
imposition of extreme forms of conditionality backed up by a graduated
selection of penalties.
On the level of penalties, Fowkes states (page 1):
Over
five years from 1 July 2013 to 30 June 2018, the small group of
unemployed people living in remote areas – comprising fewer than one-twentieth
of all unemployment benefit recipients – received more penalties than all of
their nonremote counterparts combined.
A strength of the Paper is the clear articulation of the
data and the graphs that demonstrate the impacts of policy change and
adjustment over time. Figures 5 and 6 sum up the core argument in a glance.
A second key insight is to demonstrate the ways in which
hyper-conditionality have perverse outcomes amongst remote communities. Fowkes
observes that as the intensity of conditionality and penalisation increased, so
too did the number of people who responded by disengaging from the program,
voting with their feet to not seek income support. Fowkes demonstrates (page
16) that between 2015 and 2018, the CDP caseload dropped 17 percent from 36,642
people down to 30,380. See Table 3 for an age breakdown. Fowkes notes that this
has been a long-term issue, but convincingly argues that CDP has made it worse.
Fowkes conclusion is a highly persuasive argument that
hyper-conditionality has not worked to encourage employment (not least because
there are constraints on the number of jobs available in remote Australia given
the limited financial investments of governments generally).
So what is missing from, or only hinted at, in the Fowkes’
analysis.
First,
while Fowkes analysis if focussed entirely on work obligations and penalties,
there is a parallel policy intervention that applies to income support payments
across the NT, and in a number of other remote locations (Kununurra, Ceduna). I
refer of course to the policy of income management (quarantining) and its
policy descendant the cashless debit card (which the current Government has recently
announced will be rolled out across the NT: link
here). While the two policy interventions (CDP and income
quarantining) do not exactly overlap, there is a very substantial overlap.
So in thousands of cases across remote Australia, income
support comes not only with substantial conditions regarding ‘job activation’,
but the payments provided are also quarantined, severely limiting their
flexibility. There is a substantial literature on the merits and
appropriateness of income quarantining, however there has been very little
research or analysis into the combined impact of the two policy approaches.
Intuitively, they will each reinforce the impact of the other, increasing the
stress on recipients, and strengthening the impetus for disengagement.
Second,
Fowkes under-emphasises (at least to my mind) the potential economic, social
and cultural impacts of increasing disengagement. Apart from reducing the overall
levels of income and cash within remote economies and communities,
disengagement places increased and potentially stressful levels of strain on
the families of disengaged individuals since it is the families that inevitably
end up subsidising the ongoing subsistence of disengaged individuals. Moreover,
disengaged individuals are more vulnerable to substance abuse and other
anti-social behaviours, which impose costs on families and communities. There
is a strong sense in which the policies of hyper-conditionality are leading to
perverse policy outcomes, or in plain English, are making things worse rather
than better.
Third, Fowkes
downplays the issue of political responsibility for policy failure, presumably
in the interests of academic reticence. Fowkes’ graphs make crystal clear that the
decisions taken by Minister Scullion and the Government in late 2013 to overhaul
the newly established Remote Jobs and Communities Program and to establish from
July 2015 the CDP led to a huge spike in breaching and penalties (see Figures
5, 6, 7 and 9). According to Figure 9, the penalties imposed on Indigenous
people tripled between late 2015 and late 2016. Notwithstanding his political
rhetoric regarding job creation, Minister Scullion should be held responsible
for the extraordinary policy failure that the CDP policy initiative represents.
Fourth, Fowkes
arguably might have done more to point to any academic or policy relevant assessments
of the Minister’s claims that the CDP has been successful in creating jobs and
of the utility of welfare conditionality generally. In her defence, these would
require an entirely new analysis. I am not in a positon to provide a
comprehensive assessment, but note that the most recent research based on the
2016 Census does not provide much positive news. In a 2018 research paper
titled ‘Employment Outcomes’ (link here), ANU researchers Danielle Venn and
Nick Biddle say this:
Indigenous
employment rates in remote areas dropped substantially between 2011 and 2016:
by 4 percentage points for women and 9 percentage points for men. As
discussed above, this was partly due to the phasing out of the CDEP scheme.
Employment performance was considerably worse for the Indigenous population
than for the non-Indigenous population in remote areas, where the employment
rate for the non-Indigenous population increased by 1 percentage point for
men and 2 percentage points for women, resulting in a widening of the
employment gap in remote areas by 10 percentage points for men and 6 percentage
points for women.
This suggests that the Commonwealth’s ‘job activation’
programs in remote Australia, in particular, RJCP and its successor CDP are not
making substantive inroads. In terms of international experience, a five-year
project on Welfare conditionality in the UK overseen by the Economic &
Social Research Council concluded in its Final Findings Overview:
Welfare
conditionality within the social security system is largely ineffective in
facilitating people’s entry into or progression within the paid labour market
over time (link
here).
Fifth, while
Fowkes analysis makes a convincing case that the CDP (and its policy ancestors)
are not fit for purpose, she says very little about what should and will
replace it. Various replacement policy models for CDP are conceivable. The most
ambitious attempt to lay out such a model was prepared in 2018 by the peak Aboriginal
organisations in the NT, known as APONT (link here and here).
One can discern various reform principles
(self-determination, community control, co-design, etc) in Fowkes’ analysis.
However, I know from my own experience within the bureaucracy that the current
arrangements are embedded within a web of highly complex legislative and
administrative arrangements. These reflect a labyrinthine IT infrastructure
that is both difficult and expensive to amend, provider contracts for set terms,
bureaucratic mindsets and interests that are not necessarily focussed on
citizens’ rights and well-being, plus a range of competing external interests with
the capability to exert political influence. In addition, the whole issue of
Indigenous welfare reform is ideologically fraught with a range of strongly
held views in play that do not necessarily align with the standard left/right
political spectrum. This complexity ensures stasis and inertia are the default
condition, and even minor change is immensely challenging.
In this environment, effective reform requires much more
than a decision to close down the existing CDP. It will require vision, extraordinary
drive and commitment, plus a mastery of bureaucratic and parliamentary politics.
In the event there is a change of Government, reforming CDP will, on its own, represent
a huge challenge for the incoming minister and his or her Department. Of
course, at this point, it is not clear which portfolio the CDP will come under
in a new Government.
Finally, Lisa Fowkes has made an enormous contribution to
making the case for reform of remote employment services. She has been
instrumental in focussing attention on the implications and consequences of
punitive conditionality in our remote welfare system, and deserves plaudits for
her intelligent and constructive contributions. Her work generally, and this
paper in particular, will be the essential starting point for any serious
reform in this area.
Declaration: In my day job, I am a
Visiting Fellow at CAEPR at the ANU.
[1]
Fowkes L (2019). “The application of income support obligations and penalties
to remote Indigenous Australians, 2013-2018’ CAEPR Working Paper 126/2019,
CAEPR,ANU
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