SACOSS Information Paper

• Greg Ogle
• South Australian Council of Social Service

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21 June 2010This report discusses the problems associated with income management and the possible implications for a large number of South Australians.

Compulsory management of a portion of the income of designated groups of welfare recipients is set to be expanded beyond the Northern Territory Emergency Response (the “Intervention”) to other areas across Australia. A range of welfare recipients and social service groups have criticised the scheme, arguing that it is demeaning, inflexible, inconvenient, and risky for welfare recipients, and that it stigmatises whole groups of people. It is an expensive approach that does not really address the complex problems facing individuals and local communities.

While it is not clear where or how the federal government will apply compulsory income management to areas outside the Northern Territory, a range of government statistics show that South Australia, or areas within South Australia, could be a high priority for the introduction of the scheme. Analysis of disadvantaged areas or regions in South Australia suggests that the scheme may first be applied to Aboriginal communities in the north and west of the state, and also to parts of suburban Adelaide – particularly around Elizabeth and the “Parks” area near Port Adelaide.

However, identifying these areas illustrates further practical problems that highlight the arbitrariness and unfairness of the system. Boundary problems arise where the scheme is applied to particular suburban areas and not to neighbouring areas, while retailer-participation problems will either channel welfare expenditure to major retail chains or impose administrative burdens on small businesses participating in the scheme. These problems decrease if larger areas are chosen for income management, but choosing larger areas makes the scheme more expensive to manage and less targeted. These practical issues add to the general social critique of the scheme and suggest that compulsory income management is not a useful tool to address issues in vulnerable and disadvantaged communities in South Australia.