Labor waste millions on ‘income management’

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The high cost of implementing ‘income management’ schemes like the Basics Card has shone yet another harsh light on the Gillard Government’s regressive welfare reforms. It has been revealed that administering the Basics Cards scheme in the Northern Territory alone costs over $100 million!

Income management involves ‘quarantining’ a portion of someone’s welfare payments. Payments can then only be spent on goods deemed important enough by the government. The Basics Card scheme was first tested on Aboriginal communities in the Northern Territory but it is now being rolled out in trials across the country.

The government uses income management to create the illusion that people on benefits are untrustworthy and undeserving of the meagre payments that they receive. This is an attempt to try to divide those who work from those who don’t. Employers and governments alike hope that if we are arguing amongst ourselves we will overlook the fact that they are exploiting us all.

Even out of the misery of unemployment the government is creating opportunities for big businesses to profiteer. Aboriginal people who previously worked for the Community Development Employment Program (CDEP) or Strategic Indigenous Housing and Infrastructure (SIHIP) programs for Award wages now work for less than half of that on quarantined incomes.

Endless private consultants and contractors are employed to do very little in these programs. Some consultants have been given free cars and hundreds of thousands of dollars to do, in their own words, “absolutely nothing”.

Under Labor’s rule, with the tacit support of the Greens, we have seen special deals with large supermarket chains, as not every shop accepts Basics Cards. Other businesses have sensed there is money to be made. Desperate for a piece of the income management pie, fast food companies like Red Rooster are begging the government to be part of the Basics Card scheme. You can bet that they will also be pushing for income management to be expanded into other areas.

Rivers of money are flowing to big businesses in the name of ‘income management’. This proves the absurdity of the government’s pledge to keep welfare payments low. Instead of using hundreds of millions of dollars to undermine wages, scapegoat Aboriginal people and make the lives of the unemployed more difficult, the government could easily increase welfare payments, invest in infrastructure projects to create jobs, or expand services in Aboriginal communities.

Indigenous Affairs Minister Jenny Macklin has argued that “welfare should not be a destination or a way of life. The government is committed to progressively reforming the welfare system to foster individual responsibility”.

While waxing lyrical about individual responsibility the government is doing nothing about the fact that there are just not enough jobs to go around. In this context trade unions, organisations of the unemployed and Aboriginal people must come together to fight for an end to ‘income management’.

By campaigning together we can cut across the governments’ and employers’ attempts to divide us. This would put us in a much stronger position to win more jobs with real wages and an increase in welfare payments across the board.

By Chris Dite