Thursday 11 April 2019

Remote income support conditionality




 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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