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An Australian experiment with conditional welfare ─ findings from the evaluation of Income Management in the Northern Territory
1 October 2013
Rob BrayResearch School of EconomicsANU
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Introduction
• A brief overview of– Australia’s welfare system– The Northern Territory– Indigenous Australians
• The evaluation of New Income Management (NIM) in the Northern Territory
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Australia’s welfare system
• Effectively universal needs-based, non time-limited income support payments, but:
– Categorical (Age/Disability/Parent (child
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The Northern Territory• Self-governing territory – but with
strong federal powers• 237,000 people (1% of Australia)• While 49% live in Darwin & 12% in
Alice Springs – rest remote• 27% Indigenous (Nationally 2.3%)
– 50% of NT is Aboriginal land• 62% of Income Support recipients
in NT are Indigenous
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Indigenous AustraliansIndigenous Non-
IndigenousAustralia NT
Male Life Expectancy at birth (years) 67.2 61.5 78.7Child mortality (per 1,000) 7.8 12.2 4.0Year 7 literacy (% reaching national standard for reading) 76.6 40.4 95.9Completed high school (Yr 12)(per cent of 20-24 year olds) 45.4 23.6 88.1Employment to population ratio 46.4 37.9 62.2Age standardised imprisonment rate (per 1,000 persons) 18.9 17.3 1.3
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The evaluation• Nature of the evaluation• History, objectives and characteristics of
income management– Northern Territory Emergency
Response (NTER)– Closing the Gap
• Findings of the evaluation
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Evaluation of NIM • Consortium SPRC, ANU, AIFS• First report published in
November 2012– Bray (ANU)– Gray (ANU)– Hand (AIFS)– Bradbury (SPRC)– Eastman (SPRC)– Katz (SPRC)
• Detailed evaluation framework• Multi-stage to 2014
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The evaluation – first report• Data for first stage
– Administrative – DHS unit record files– Quantitative & qualitative surveys of intermediaries
(stores, financial counsellors, child protection workers, DHS staff, etc.)
– Quantitative & qualitative surveys of people on IM• 818 in NT and 305 in contrast sites • Urban and selected communities, over sampling
of non-Indigenous• Designed to be longitudinal
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What is Income Management (IM)
• Quarantining 50% of income support and family payments
• Quarantined money to be spent on “basics”– No alcohol, tobacco, pornography, gambling
• Money is:– Allocated to a BasicsCard– Payments on behalf of the person– Payments to merchants for specific purchases
• Voluntary: extra $250 every 6 months9
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Basics card
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• Debit card which can be used at approved merchants
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Initially introduced as part of NTER
• Following the “Little Children are Sacred” Report
• September 2007• Prescribed communities• All income support recipients• Part of a wider set of
interventions• Required suspension of parts
of the Racial Discrimination Act
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Prescribed communities
• Communities on land held under the Aboriginal Land Rights Act – 73 prescribed communities (mainly remote)– Urban “Town Camps” (mainly on fringe of
Darwin and Alice Springs)• 70% of the NT Indigenous population live in
these communities.
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An urban prescribed community
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New Income Management program• Introduced August 2010• Applied to all of the NT
– Restoration of Racial Discrimination Act• Essentially
– Age & Disability Pensioners not compulsory– Compulsory for others – on basis of duration– Voluntary, Vulnerable and Child Protection– Scope for exemptions– Supporting initiatives – matched savings &
money management
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Other Australian Income Management Initiatives
• Voluntary / Child Protection / Vulnerable– Placed based trials in five locations , along with
certain communities and regions in WA and SA• Voluntary & Child Protection
– WA: metropolitan Perth & Kimberly region• Cape York (Community Based)
– Family Responsibilities Commission – 60-75% 3-6 months & option to apply for voluntary
• Small numbers – 1,634 Voluntary & 833 various compulsory
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Legislative objectives
• Reduce immediate hardship by ensuring payments directed at meeting priority needs
• Give support to budgeting• Reduce spending on alcohol, tobacco,
pornography & gambling• Reduce risk of harassment• Encourage socially responsible behaviour• Improve level of protection to welfare recipients
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Larger vision
“income management lays the foundations for pathways to economic and social participation through helping to stabilise household budgeting that assists people to meet the basic needs of life.”
Policy StatementLandmark Reform to the Welfare System,
Reinstatement of the Racial Discrimination Actand Strengthening of the
Northern Territory Emergency Response2009
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How might behaviour be impacted?• ½ money quarantined from alcohol and tobacco• Basics card as commitment device?
– For food– Circuit breaker on obligations
• Low cost banking• Knowledge of financial position?• Interview with Centrelink on allocations• Referral to money management training• Ability to gain exemption as incentive• Habitualisation vs. stabilisation
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Key numbers
• As at April 2013– 17,600 subject to IM in the Northern Territory– Compulsory – 13,900– Voluntary – 3,600– Child Protection - 18– Vulnerable - 150
• Administrative cost: $A 95 -110 million per annum – $A 5,000 per person per year
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Who is on IM ?• 91% are Indigenous
– Indigenous account for 71% of income support recipients (under APE)
• 61% women (63% compulsory, 56% voluntary)• 50% aged under 30 years• 11% of Age Pensioners • 70+% of Newstart, PPP & Youth Allowance• 60% of Single Parents on Income Support• 18% couples with kids, 18% sole parents, 25%
couples no kids & 40% singles20
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NIM Child protection and vulnerable
• Child protection – view from child protection workers:– Financial management not seen as key issue– Not worth going from 50-70%– Risk of rupture of client relationship
• Vulnerable– Very small – potentially squeezed out?– 97% Indigenous– Government has extended the target group
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BasicsCard• Mixed responses – in part related to location
– More positive in remote and negative in urban• Issue of security cited by many • In remote – free banking service
– But govt. could do more re balance checking– Cost was high if using mobiles
• In urban – lack of acceptance of cards – especially markets
• Difficulty in making some large payments • Has not eliminated gambling etc.
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Money management• Money management/financial counselling appears
to be valued– Immediate demand though is for short-term
assistance• Approved money management courses and
matched savings not successful– Very low take-up– Not well pitched
• Centrelink staff did not see value in referring
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Did IM make things better for family ?
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0
10
20
30
40
50
60
70
80
Female Male Female Male Female Male
Indigenous CIM Indigenous VIM Non-IndigenousCIM
Pro
porti
on o
f res
pond
ents
(%)
Made thingsbetter
Made nodifference
Made thingsworse
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How often do people feel
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0% 20% 40% 60% 80% 100%
IndigenousCompulsory
IndigenousVoluntary
Non-IndigenousCompulsory
IndigenousCompulsory
IndigenousVoluntary
Non-IndigenousCompulsory
Not
fair
Dis
crim
inat
edag
ains
t
All the time
Most of thetime
Sometimes
Hardlyever
Never
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Control over money
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0
10
20
30
40
50
60
Female Male Female Male Female Male
Indigenous Compulsory Indigenous Voluntary Non Indigenous Compulsory
Pro
porti
on o
f Res
pond
ents
(%)
More control now About the same Less control now
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Aim for IM
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0
10
20
30
40
50
60
70
80
Female Male Female Male Female Male
Indigenous Compulsory Indigenous Voluntary Non-Indigenous Compulsory
Pro
porti
on o
f res
pond
ents
(%)
Stay on income management Not sure Get off income management
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Perceived outcomes for children
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-20-10
010203040506070
Hea
lthie
r
Mor
efo
od
Saf
er
Bet
ter s
choo
l a
ttend
ance
Hap
pier
Cul
tura
l a
ctiv
ities
Bal
ance
of i
mpr
ovem
ent
less
poo
rer o
utco
me
(%)
Indigenous Compulsory NTER Indigenous Compulsory non-NTERIndigenous Voluntary NTER
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Sufficient money for food - change
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-20%
-10%
0%
10%
20%
30%
40%
50%
60%In
dige
nous
CIM
Indi
geno
usV
IM
Non
-Indi
g.C
IM
Ref
eren
ceIn
dig.
Ref
.N
on-In
dig.
Aver
age
Impr
ovem
ent
Perceived Reported
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Model results – Frequency of feeling
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Relative to control pop. – Coefficients βStdY
Indig. CIMNTER
Indig. CIM non‐NTER
Indig. VIM NTER
Discriminated against 0.547** 0.440** 0.532**
Embarrassed 0.632** 0.526** 0.348
Not fair 0.520** 0.529** 0.247
In control of life ‐0.374* ‐0.795** ‐0.171
Better for self and family ‐0.206 ‐0.567** ‐0.003
In control of money ‐0.362* ‐0.828** ‐0.227
Not worried ‐0.102 ‐0.248* ‐0.124
Safer ‐0.252 ‐0.727** ‐0.124
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Model results – Perception of change
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Indig. CIMNTER
Indig. CIM non‐NTER
Indig. VIM NTER
Managing your money 0.128 ‐0.393** 0.221
Saving money 0.218 ‐0.295* 0.368*
Having enough food 0.534** 0.312** 0.629**Knowing how much money 0.329* ‐0.210 0.341Looking after family obligations 0.171 ‐0.173 0.272
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Model results – change in experiences
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Coded so that +ive is an improvement
Indig. CIMNTER
Indig. CIM non‐NTER
Indig. VIM NTER
Ran out of money for food ‐0.233 ‐0.215 ‐0.281Ran out of money for clothing ‐0.132 ‐0.174 ‐0.162Ran out of money for medicine ‐0.214 ‐0.185 ‐0.101Rent on time ‐0.309 ‐0.302* ‐0.264Bond ‐0.349 ‐0.276 ‐0.003Utilities ‐0.011 ‐0.012 0.060Difficulties because gave to others 0.495** 0.209 0.389*Asked ‐0.141 ‐0.014 ‐0.189Emergency Relief 0.035 ‐0.005 0.041Travel ‐0.191 ‐0.278* ‐0.325School activities ‐0.338 ‐0.006 ‐0.224Survey participants (d) 244 168 128
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Exemptions from IM
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-NonIndigenous
Indigenous
48.7% 13.2%
79.8% 36.5%
Apply
Applications successful
Exempt 38.8% 4.8%
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First Evaluation Report Conclusion
• Diverse impacts
– Can benefit some
– Applied to many who neither need nor benefit
• Incentives/supports not effective
• Means of control – not building behaviours
• People likely to remain on for a long time
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Next steps• Final report June 2014• Use more administrative data on outcomes –
including alcohol and tobacco sales• Specific studies – vulnerable, child protection• Understanding:
– Motivations of those on voluntary– The lived experience of IM
• As well as second stage of participant survey• An antipodean model?
– Income management for youth in NZ35
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Evaluating New Income Management in the Northern Territory: First Evaluation Reporthttp://www.fahcsia.gov.au/our-responsibilities/families-and-children/programs-services/income-management/evaluating-new-income-management-in-the-northern-territory-first-evaluation-report
Audit Report: Administration of New Income Management in the Northern Territory http://www.anao.gov.au/Publications/Audit-Reports/2012-2013/Administration-of-New-Income-Management-in-the-Northern-Territory/Audit-summary?sc_camp=F27966D3337F4E0C83E730C230B4ECD4
Productivity Commission: Overcoming Indigenous Disadvantage: Key Indicators 2011http://www.pc.gov.au/gsp/indigenous/key-indicators-2011
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