Chapter 2Views on the bill
2.1This chapter examines the views raised during the Senate Community Affairs Legislation Committee’s (the committee) inquiry into the Social Security (Administration) Amendment (Income Management Reform) Bill 2023 (the bill).
2.2Submitters were largely supportive of the abolishment of the Cashless Debit Card (CDC) and the technological improvements of the SmartCard. However, in discussing the bill, submitters also raised concerns in relation to the following matters:
the retention of elements of compulsory income management (IM);
the nature of and timeframe for consultation on the future of IM;
empowering the Minister for Social Services to expand compulsory IM by legislative instrument;
compatibility of the bill with human rights;
the need for wrap-around community support programs; and
the exclusion of a sunset clause.
Abolishing the Cashless Debit Card
2.3As noted in Chapter 1, this bill seeks to amend the Social Security (Administration) Act 1999 (the Act) to continue the Government’s IM reforms by building on the changes made by the Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Act 2022 (Repeal of Cashless Debit Card Act). These changes established the Enhanced Income Management (eIM) regime in Part3AA of the Act and repealed CDC.
2.4A number of submitters noted support for the abolition of the CDC. For example, Uniting Communities, a South Australian social justice not-for-profit, stated it:
… applauds the Federal Government’s commitment to ending Compulsory Income Management (CIM) for those subjected to the Cashless Debit Card (CDC) regime in 2022.
2.5The Royal Australian and New Zealand College of Psychiatrists (RANZCP), the principal organisation representing the medical specialty of psychiatry in Australia, stated it agrees with:
… the Department of Social Services' assessment that the Cashless Debit Card (CDC) program has failed to achieve its policy outcomes, and that its abolition is required alongside further reforms to [IM] programs. We support the Amendment Bill as the commencement of a)transitional arrangements for the CDC program's abolition and b) future IM reform to improve community decision-making.
Technological improvements
2.6In its joint submission, the Department of Social Services (DSS) and Services Australia stated that feedback received during the development of the Repeal of Cashless Debit Card Act indicated that the technology used under the IM regime was outdated and no longer met people’s needs. Therefore:
The Bill responds to this feedback through its provisions that will allow more people to move from the BasicsCard to the modern technology of the SmartCard.
2.7According to the explanatory memorandum (EM), the SmartCard offers modern banking features such as ‘Tap and Go’, online shopping and BPAY. In the second reading speech, Minister for Social Services, the Hon Amanda Rishworth, added that the card is also PIN protected.
2.8The Minderoo Foundation, a philanthropic organisation, expressed its support for these upgrades:
… we would like to acknowledge the positive step this legislation provides to replace the BasicsCard with the Smartcard, providing a far simpler user experience. Improved technology and user experience was one of the key issues identified in the 2021 report The Cashless Debit Card: Lessons learnt and future technology opportunities … Australia is rapidly becoming a cashless society and this process is well underway. Access to continued technology improvements that match market improvements destigmatises cashless welfare arrangements ensuring they are indistinguishable from any other card user. Minderoo Foundation considers these improvements are critical to the health and prosperity of these communities.
2.9Similarly, the Public Health Association of Australia (PHAA), Australia's peak body for public health, stated that it supported ‘updating technology to provide recipients of [eIM] with more options for where they can spend their money’.
2.10The Australian Council of Social Service (ACOSS), the peak council for community services, was also not opposed to improving the technology of the card used under eIM to improve the usability of the card for participants. However, ACOSS expressed concerned that the SmartCard’s new technology could make it easier for the Government to expand compulsory IM than with the BasicsCard, because the BasicsCard was more expensive to roll out and merchants had to be signed up to accept the card.
2.11The Queensland Indigenous Family Violence Legal Service (QIFVLS) welcomed Services Australia becoming the provider of the SmartCard, as opposed to a private provider, as well as the added flexibility within the bill allowing for direct payments to be made in circumstances where a recipient is unable to use their card, for example where there is a relationship characterised by family violence. However, it added:
Despite this improvement, we must ensure that recipients are not being taken advantage of, particularly those with poor digital and technological literacy. Accordingly, we strongly recommend consultations with communities and with people who have lived experience of using or being placed on [IM], in order to identify and address potential technological issues and other gaps that may arise. Throughout this process, self-determination and financial independence is the goal and ideally we envision that the SmartCard would act as a vehicle assisting recipients and account-holders to slowly gain financial independence to the level that [IM] is not needed.
2.12Similarly, Dr Shelley Bielefeld, an academic who has conducted research on social security and welfare conditionality, pointed out that although the bill ‘has Services Australia as the provider of the SmartCard, the government’s background assumptions about digital literacy and technology affordability for people on low incomes remain unchanged’. As such, the bill ‘does not address the problem of technology not being accessible for cardholders needing to manage their income and payments online’.
2.13DSS and Services Australia outlined the supports that will be provided to participants who choose to move to eIM, as well as to new eligible entrants to the program. This includes:
a targeted and culturally appropriate communication strategy that utilises telephone, face-to-face, and community engagement channels, as well as the use of interpreters and the involvement of nominees as appropriate;
a general notification letter and SMS to be sent to existing IM participants soon after the commencement date to alert them to the changes and provide information and contact details for further assistance;
Services Australia will hold individual comprehensive discussions with participants who are considering moving to eIM to explain the differences, how the SmartCard operates, and the transition process. DSS emphasised that participants will only be transitioned on request and where the participant has provided current, express and informed consent; and
NT participants will continue to be able to choose the Traditional Credit Union or Indue as their SmartCard issuer.
Retention of elements of compulsory income management
2.14Whilst some submitters acknowledged their support for the Government abolishing the CDC, overwhelmingly, submitters expressed their disappointment that compulsory IM would continue for some people under the bill’s provisions despite the Government expressing its intention to phase it out.
2.15For example, Mr Simon Schrapel, Chief Executive at Uniting Communities, expressed his disappointment that the bill extends a form of compulsory IM after the abolition of the CDC, stating:
Given the government has made quite a strong story and a positive story about why the cashless debit card was inappropriate, we find it highly inconsistent that it should be wanting to actually now introduce a bill to extend the longest form of compulsory [IM] in Australia, the BasicsCard, albeit replaced by a new mechanism …
2.16Economic Justice Australia (EJA), the peak organisation for community legal centres, submitted it was concerned that:
… the title of the Bill is misleading, and that the focus of the Explanatory Memorandum (EM) belies the fact that there is little by way of ‘reform’ in the proposed legislative changes. The Bill in fact reinforces compulsory [IM] as a component of the social security policy framework, rebranded as [eIM].
2.17As outlined in Chapter 1, the bill retains elements of compulsory IM by incorporating provisions for existing IM measures into Part 3AA of the Act. By doing so, the bill enables compulsory IM arrangements for the following measures:
child protection;
vulnerable welfare payment recipients;
disengaged youth (Northern Territory (NT));
long-term welfare payment recipients (NT);
school enrolment;
school attendance;
Queensland Commission (Cape York); and
other state/territory referrals.
2.18In response to the Parliamentary Joint Committee on Human Rights’ (PJCHR) Human Rights Scrutiny Report 4 of 2023, the Minister clarified that ‘the purpose of the Bill is to expand access to the improved technology associated with enhanced IM. It does not change the policy settings behind the IM regime’. The Minister explained:
The Government's objective is to implement voluntary IM regime in the near future.
…
The Government is committed to consulting with affected communities on the future of IM and it will not make changes to the operation of IM until meaningful consultation has occurred.
The Bill provides existing and new enhanced IM participants with modern technology whilst that consultation occurs.
Effectiveness of compulsory income management
2.19Reflecting on the continuation of these compulsory IM measures, submitters pointed to the failure of compulsory IM in achieving its policy outcomes. For example, Professor Matthew Gray and Dr J. Rob Bray PSM, researchers at the Australian National University (ANU) whose research focuses on evaluating IM in the NT, stated:
From our research and the review of the research of others we believe there is clear evidence that the imposition of [IM] on broad classes of income support recipients has failed. This was the fundamental finding of both our research into ‘New Income Management’ in the Northern Territory and the evaluation of Place Based Income Management undertaken by Deloitte (2015). These two studies are the only ones undertaken with a clear longitudinal component and a control population.
The robustness of this finding can be seen in the failure of compulsory [IM] to achieve any positive outcomes in the Northern Territory despite having operated since 2007. This failure is perhaps most marked in terms of a failure to achieve improvements in well‐being for the Aboriginal population of the Territory.
2.20Professor Gray emphasised the conclusion of these findings, explaining that the evaluation:
… could not find any substantive evidence of the program having significant changes relative to its key policy objectives, including changing people's behaviours. There was no evidence of changes in spending patterns, including food and alcohol sales. There was no evidence of any overall improvement in financial wellbeing, including reductions in financial harassment or improved financial management skills. More general measures of wellbeing at the community level showed no evidence of improvement, including for children.
2.21The Aboriginal Peak Organisations Northern Territory (APO NT), an alliance of Aboriginal organisations working to promote and protect the rights of Aboriginal people living in the NT, asserted:
Compulsory [IM] is disempowering and adds to stigmatisation, and fails to address unemployment and the underlining, structural issues that force Aboriginal people into poverty and financial hardship, often experienced intergenerationally. There is no evidence that it changes behaviour (as some supporters claim) nor equip people with much needed financial literacy and economic autonomy, and levers from which to escape cycles of meagre welfare … APO NT cannot stress enough that compulsory [IM] is a failed regime and should not continue.
2.22RANZCP described the logic of the IM program, like that of the CDC program, as ‘inherently flawed’ whereby the punitive measures:
Fail to support people with concurrent addiction, housing and employment issues to bring about behavioural change, as opposed to positive reinforcement strategies and the fulfilment of mental, emotional and social needs;
Entrench feelings of disempowerment, hopelessness, helplessness, and injustice; and
Exacerbate community grievance and unrest, and the re-traumatisation of Aboriginal and Torres Strait Islander communities (due to disproportionate number of applications).
2.23Similarly, the PHAA submitted that eIM retains many of the negative features of the CDC such as unfairly targeting First Nations peoples, impinging on the financial freedom of users, and perpetuating paternalistic top-down strategies of addressing social harms that lack evidence of effectiveness and increase stigmatisation.
2.24Dr Francis Markham, an economic geographer working at the Centre for Aboriginal Economic Policy Research at the ANU, pointed out that a cost-benefit analysis of the CDC found that ‘it took $6 of Government expenditure to produce $1 of benefit’ and that the Parliamentary Budget Office found that abolishing the Cashless Debit Card and mandatory IM from 1July 2022 would save the budget $286.5 million over forward estimates. Dr Markham stated:
I believe that there is a strong case to be made that the total abolition of [IM] and the redirection of funds to social services or social security would deliver greater benefits for the same budget outlay than the implementation of [eIM].
Making income management voluntary
2.25The EM acknowledged that:
The Government made an election commitment to abolish the CDC program and consult with communities about alternative options to support individuals and communities including options for voluntary IM.
2.26A number of submitters questioned the bill’s provisions against the Government’s commitment to work towards a voluntary model of IM.
2.27The Central Land Council (CLC), a statutory land council representing the Aboriginal peoples of the southern half of the NT, stated the provisions of the bill may appear benign, but ‘they do nothing to advance the Australian Government’s stated commitment to make IM voluntary’:
… if people decide they want to be on [IM], it must be voluntary, and it must be voluntary in every sense – that is, people should be able to choose whether they have it or not, and how much money goes onto any card under any future voluntary program.
2.28Uniting Communities were also concerned that there ‘appears to be significant inconsistencies between the government’s commitment to successfully “abolishing” the compulsory nature of the Cashless Debit Card whilst retaining, and potentially expanding, other forms of compulsory [IM] regimes’. Therefore, Uniting Communities recommended that the bill be amended to ensure that:
(a)Enhanced Income Management (eIM) is introduced as a voluntary “opt in” regime with no provision for designated bodies to refer participants to any forms of Compulsory [IM].
(b)All existing CIM regimes transition to Voluntary IM regimes to ensure that the core principles of choice and self-determination are central to any reforms.
2.29ACOSS agreed that the bill sends mixed messages about the Government’s intent regarding income quarantining, stating:
ACOSS is confused by the content of this bill because it is at odds with the Federal Government’s assertions about the future of mandatory income quarantining for cashless debit and [IM].
We welcomed the government’s abolition of mandatory cashless debit because it removed a discriminatory policy that served no benefit to the people it targeted. Mandatory [IM], for all intents and purposes, is the same policy, restricting how people on income support payments spend their payments. However, this bill maintains mandatory [IM] …
Consultation
2.30The bill’s EM stated:
Transition will be a staged approach with any future evaluation focused on the experience of participants coming off the programs and effectiveness of support services. The Department will consult with affected communities to ensure that the evaluation methodology is fit for purpose. This may include co-designing an evaluation methodology with communities, and identifying measures the communities see as important. It is important to note this information along with any lessons learnt will help develop Government’s future evidence based policy.
2.31Uniting Communities thanked the Government for its ‘commitment to genuinely consult and to work with affected communities on the future of [IM] and what it will look like for them’, noting that:
These communities have endured many years of CIM and are understandably concerned that CIM could be embedded and enshrined into legislation to ensure that CIM becomes a permanent regime. Trusting a government to “do the right thing” will be challenging for these affected communities …
2.32Some submitters raised questions about the quality of the consultation planned by the Government, reflecting on past consultation processes.
2.33Associate Professor Elise Klein OAM from the Crawford School of Public Policy at the ANU, for example, questioned the Government’s ability to effectively consult with communities, asserting:
… the government and its social service agencies have not been able to demonstrate that they know how to consult with communities, let alone work with communities to develop programs and services that actually support them. Instead, the government and its agencies have created division with their community consultation and programs. I am concerned that the Federal departments linked to social services do not have the skills and capabilities to make this happen.
…
We have seen time and time again how government uses the term consultation to signal broad based support, yet these are often run more like information sessions where alternatives are not on the table.
2.34Professor Gray and Dr Bray agreed and recommended that consultations with communities on transitioning off existing IM arrangements should not be undertaken by the DSS or Services Australia, stating that consultations must be clear, transparent and Indigenous-led.
2.35QIFVLS argued that:
Too often ‘consultation’ has merely consisted of ‘telling’ communities what will occur … The ability to genuinely influence the outcome of the decision-making process is a fundamental ingredient towards ensuring there is genuine consultation pursuant to Article 19 [of the United Nations Declaration on the Rights of Indigenous Peoples].
2.36Dr Bielefeld agreed, stating to achieve this type of consultation, it must be conducted in ‘good faith’ and with the goal of ‘free, prior and informed consent’ whereby affected First Nations communities have the opportunity to genuinely shape program outcomes. Dr Bielefeld noted in her evidence that during her recent fieldwork in the NT she had spoken with several elders and community members who said that:
… the government had not come to their communities to talk with them about the proposed changes to [IM] and the introduction of the SmartCard. They had not heard about it, let alone been consulted about it … This reflects an ongoing problem impacting Australia's First Nations, where obtaining their free, prior and informed consent about laws and policies impacting them is deemed irrelevant by the government.
2.37APO NT insisted it is important ‘the Northern Territory is prioritised in this consultation process due to the length of time that participants of the NT have been subject to this regime’. It recommended that withdrawing IM should be managed with care and done so in close consultation with relevant Aboriginal Community Controlled Organisations (ACCOs) and community leaders, to support participants through this process.
2.38The Northern Territory Council of Social Service (NTCOSS), the peak body for the NT community and social services sector, was of the view that sufficient consultation had been done at least on the question of whether compulsory IM should be repealed.
2.39The CLC described the consultation that it has been involved in, to date, as being ‘quite limited’, including brief phone conversations and an online briefing for Central Australian stakeholders with the department. It commented that it would like to see a more extensive consultation process carried out.
2.40On the other hand, Mrs Emma Kelly, Acting CEO of Arnhem Land Progress Aboriginal Corporation (ALPA), a financially independent not-for-profit Aboriginal Corporation, stated:
We have spoken on numerous occasions with the Department of Social Services around what a consultative strategy would need to look like, in relation to our regions, for the eIM rollout technologically as well as what a move from compulsory to voluntary [IM] would look like. It wasn't in the detail of what that move would look like from a government perspective but in relation to what the consultation structure with community would need to look like to ensure it met the needs and was a genuine two-way conversation … [We] let the Department of Social Services know that as an organisation we would support them, to make sure that the [Arnhem Land] communities had the right information that they needed, to be able to give them a design or a decision on behalf of the community.
2.41A number of submitters also raised concerns about the level of detail provided by the Government in relation to its plans for consultation on the future of IM and recommended that a detailed timeline be provided.
2.42ACOSS acknowledged that a process of community and stakeholder consultation is under way, but strongly urged the Government to ‘outline its plans and timeline for moving to a voluntary model of [IM].
2.43Similarly, EJA argued that the bill should make explicit the plan for future consultations, and include:
… a time frame that leads to a specific transitional outcome away from compulsory [IM]; a plan for who exactly is to be consulted and on what points; and for there to be reporting on that so that we can actually assess the extent to which communities have been consulted about this issue.
2.44Additionally, several submitters specifically raised the importance of a properly carried out and extensive consultation process. For example, APO NT said:
There has to be a proper consultation process. Three-quarters of our people live in remote communities and English is not their first language. The consultation has got to be culturally appropriate, and there's a need for interpreters so that people can really understand. We have a lot of governments going in and out of communities—it's been a bit of a merry-go-round—and a lot of people don't really understand what's going on. What we are calling for is proper engagement and consultation and working with communities rather than trying to get an election video. They should be making sure that the whole community really understands that it's impacted by income management, not just a couple of organisations. Most of our people are on welfare, so they deserve a right to be informed.
2.45At the committee’s hearing, DSS disagreed with the assertion that the department was not undertaking genuine consultation and noted preliminary work had begun on how it planned to approach consultation on the future of IM:
Our role as public servants is not to advocate for a particular position … We've gathered a fair bit of feedback, not only at the ministerial level but at the official level, regarding the need for the contemporary technology—hence the bill that's in front of us today—and starting the preliminary discussions about what the future of [IM] could look like. And, as we've just heard from previous testimony, the need for authentic engagement with Aboriginal and Torres Strait Islander people needs to be handled very carefully. The approach to that consultation is certainly intended to be finalised and then we can roll out with that consultation. But I would certainly reject the suggestion that we're advocating a continuation of any particular policy ahead of such consultation.
2.46DSS provided the committee with a list of stakeholder consultations that have been conducted to inform the bill, as well as consultations on the SmartCard design and preliminary discussions on IM reform, as at 15 May 2023.
Minister’s power to expand income management
2.47Whilst DSS and Services Australia confirmed that the bill does not expand the locations in which IM programs operate, the bill does provide the Minister with the power to expand the locations to which IM applies by legislative instrument.
2.48Despite this, the EM states that the Minister intends the ‘disengaged youth’ and ‘long term welfare payment recipients’ measures to continue to operate only in the Northern Territory. DSS and Services Australia added:
Consistent with best practice and the requirements of the Legislation Act 2003, the Minister would not extend an enhanced IM measure to a new location without first consulting affected communities and other stakeholders.
2.49A number of submitters raised concerns about this provision in the bill, recommending that the provision be removed. For example, SPA submitted that ‘[w]hile it may not be the Government’s intention for continued expansion, [proposed section 123SDA] would make it possible if the Bill is passed in its current form’.
2.50A joint submission from not-for-profit services providers based in Shepparton, Victoria submitted:
It is our view that the Social Security (Administration) Amendment (Income Management Reform) Bill 2023 does not clarify the intent or process to transition from compulsory to voluntary [IM]. On the contrary, the Bill appears to confirm and entrench compulsory versions of [IM] in a range of places where it already operates and confirms the architecture that would allow new places to be designated in the future. We do not support that approach and urge government to meet its commitment to cease blanket forms of compulsory [IM].
2.51APO NT agreed that it appears that the ‘Government is creating the conditions for the expansion of [IM], even compulsory [IM], in direct contrast to pre‑election statements’.
2.52EJA stated that it found it difficult to understand why the bill provides Ministerial discretion to declare new locations by legislative instrument. EJA added that in the Minster’s second reading speech it was stated the bill ‘does not change the current ability for state and territories to refer people to [IM] where there are concerns, for example, relating to child protection’. However, EJA noted that proposed section 123SDA (item 32) enables these measures to apply in areas outside of the NT, therefore:
… it seems that the Bill extends these abilities to States and Territories not already empowered to engage in such referrals, including Western Australia, Tasmania and the Australian Capital Territory, and expands the abilities of empowered States and Territories to uniformly make referrals under all the above-mentioned compulsory [IM] streams.
2.53ACOSS noted that the justification to include these powers is unclear, therefore it recommended that the bill be amended to remove the possibility of the expansion of mandatory eIM without an Act of Parliament.
2.54Professor Gray and Dr Bray also noted that there is no rationale provided for the inclusion of this provision which:
… runs totally contrary to commitments to review the future of [IM] and electoral commitments to “not pursue any expansion of the Cashless Debit card or community wide [IM]” (Australian Labor Party 2021, 57) … If this provision is needed for a transitional purpose then it should be more tightly specified with all elements in legislation rather than by instrument, and it should be time limited.
2.55Professor Gray and Dr Bray rejected:
… all elements of the Bill which act to extend the scope of [IM] including the ability of the Minister to declare an extension of the ‘disengaged youth’ and ‘long‐term welfare recipient’ measures to other states, and the school enrolment and attendance measures, along with the introduction of a number of default 100 per cent levels of [IM].
2.56The ALPA recognised that:
Whilst we appreciate that it may not be this governments intentions to expand IM to other jurisdictions, it should be noted that this may not be the case for future successive governments. Whilst ALPA believes that the current Minister for Indigenous Affairs will approach potential expansions of eIM with the consultation and consideration needed, we are concerned that this leaves the door open to future Ministers to potentially bypass important steps in expanding eIM, without the scrutiny and checks and balances of the Parliament.
2.57Dr Markham agreed that if it is the Government’s intent that this measure continue to operate only in the NT, ‘the government should codify this in legislation to prevent some future Minister repurposing that provision with a different intent’.
2.58DSS noted that the bill’s inclusion of the provisions enabling the Minister to expand eIM by legislative instrument is not a new power and was a product of replicating the provisions from the previous IM regime. DSS explained:
The provisions in this bill are basically copying the provisions currently on income management. So, as Ms Hope said, what this bill will do is allow people to move from income management to enhanced income management, and also place new people who would have previously gone onto income management onto enhanced income management. Therefore, we need very similar ways to able to achieve that and the best way to do that was to replicate what is currently in income management—so part 3B.
Compatibility with human rights
2.59The bill’s Statement of Compatibility with Human Rights (SOC) states that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
2.60Some submitters raised concerns about the bill’s impact on human rights, particularly in relation to the ability of participants to have self-determination and choice with respect to social service payments and the disproportionate impact of compulsory IM on First Nations peoples. For example, the QIFVLS submitted:
We cannot escape the fact that [IM] disproportionately targets Aboriginal and Torres Strait Islander peoples. CIM in particular stigmatises recipients and imposes stringent conditions on the provision of income support payments. It removes free choice which is an essential component of self-determination. Article 3 of UNDRIP provides that Indigenous peoples have the right to self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development.
2.61EJA highlighted that the PJCHR and the Australian Human Rights Commission have regularly raised concerns about the impact of compulsory IM on human rights. EJA noted the bill’s SOC:
… does not explicitly recognise that this Bill is a continuation of compulsory [IM] and that the same human rights concerns therefore apply. The use of ‘superior technology’ in administering eIM scheme does not address the fundamental human rights problems associated with Australia’s social security [IM] programs.
2.62As such, EJA recommend that bill’s SOC be ‘reconsidered and revised so as to acknowledge and address ongoing compatibility issues’.
2.63The PJCHR noted:
It is evident that consultation regarding the bill generally has occurred, and there is an intention for further consultation to be undertaken, which is an important element of the requirement for free, prior and informed consent, which is a part of the right to self-determination. However, it remains unclear whether, and to what extent, affected communities and individuals were consulted about those aspects of the bill which relate to mandatory participation in the [eIM] regime, noting that it is these aspects of the bill which most significantly limit the rights of participants.
2.64ALPA Chairman, Rev. Dr Djiniyini Gondarra OAM, stated:
… the wellbeing of Indigenous Australians depends on them having self-agency, choice and control over their lives. Hence the ALPA Board believes that regardless of what design a future [IM] program takes, participation in the program must always be voluntary.
2.65As noted in chapter 1, the Minister emphasised that the bill provides access to modern technology whilst meaningful consultation occurs on the future of IM, and that the Government ‘considers that the bill, together with relevant legislative instruments provide sufficient safeguards at this time’.
Wrap-around community support programs
2.66Submitters emphasised the need for wrap-around support programs for communities impacted by IM. The Minderoo Foundation noted that the CDC was ‘never intended to be a tool in isolation’ and that the Government, at the time, ‘made a commitment to provide further investment into wrap around support services to complement the CDC roll out, however this wasn't delivered’.
2.67The QIFVLS submitted that IM should only form part of ‘a suite of measures and ideally be the last resort when an individual and their circumstances warrant it’.
2.68UnitingCare Australia, the largest network of social service providers in Australia, was supportive of a wholly voluntary model of IM where:
… we believe that [voluntary IM] developed in consultation with communities and backed up by wrap-around supports is more likely to achieve positive life outcomes for participants.
… the most effective way to achieve long term sustainable change for participants is to provide individualised, culturally safe, wrap-around supports for as long as is required. These supports should include financial counselling, family counselling, community services and programs that focus on drug and alcohol and domestic and family violence responses.
2.69Similarly, the Minderoo Foundation noted that the bill will not close the gap without considered and long-term investment in addressing the underlying causes of disparity, and recommended the following as critical next steps:
Genuine consultation informing the Commonwealth's approach to funding and contracting.
Communities leading decision-making about priorities and activation of local service plans.
Consideration given to the medium to longer-term needs of these communities to ensure commitment remains beyond the current term of politics.
2.70Suicide Prevention Australia (SPA), the national peak body for the suicide prevention sector, recommended the Government ‘invest in and develop employment opportunities in sites where [IM] programs are targeted to create opportunities for renumeration’ and establish specialist social security legal services in regional, rural and remote areas with priority given to regions subject to compulsory IM.
2.71The CLC stated that if the Government genuinely wants to address the issues that IM purportedly seeks to address, it must be done so in partnership with Aboriginal people. It recommended that the Government take action to alleviate poverty and improve the circumstances of Aboriginal people living in remote communities by:
creating jobs and raising incomes in remote Aboriginal communities;
reducing the cost of living in remote Aboriginal communities; and
increasing and sustaining investment in remote Aboriginal communities.
2.72Furthermore, the CLC added ‘the withdrawal of compulsory [IM] must be managed with care’:
This includes taking into account implications for rental, utilities and loan deductions attached to [IM] and eIM, and ensuring people have access to advice and appropriate services/supports to understand and manage transition off the cards. Any options for and safeguards around quarantining of welfare payments in situations involving Child Protection or extreme vulnerability must be considered in close consultation with Aboriginal community-controlled organisations and Aboriginal community leaders.
2.73The Minderoo Foundation, Uniting Communities and UnitingCare Australia acknowledged the Government’s announcement in March 2023 of $25 million in funding to develop Local Service Plans (LSPs) for each of the former CDC locations, following the repeal of the CDC program. Uniting Communities described the LSPs as a ‘positive development’ that could address community needs and provide lasting solutions to longer-term issues, therefore:
… such plans and the provision of services and assistance aimed at addressing issues of poverty and related social issues experienced by vulnerable members of the community should be available to all communities. These services should not be tied to the application or removal of [IM] systems in communities … and should be available as a place-based option for all communities experiencing significant socio demographic disadvantage.
Sunset clause
2.74A number of submitters recommended that a sunset clause be included in the bill to reflect the Government’s stated intention to transition to a wholly voluntary IM scheme.
2.75For example, ACOSS recommended that a sunset clause be included in the bill for compulsory eIM, noting that the Government had made a commitment to make IM voluntary:
Unlike [IM] legislation, cashless debit card legislation always included an end date, after which new legislation would be required to extend the policy. Considering that this bill essentially establishes cashless debit (with the introduction of the SmartCard) we strongly urge the Federal Government to include a sunset clause for mandatory EIM.
2.76EJA highlighted that the bill’s EM fails to explain why a sunset provision was not included. Given that the Government has made commitments to ending compulsory IM, EJA submitted that if the bill is to pass, it ‘should at least be amended to include a sunset clause’.
2.77PHAA agreed stating that ‘if the government is serious about moving away from compulsory [IM] it is essential that a sunset clause is included. Likewise, Dr Markham stated a ‘sunset clause would provide confidence that this is, indeed, a transitional arrangement’.
2.78Emeritus Professor Jon Altman, an academic researching Indigenous economic development issues at the ANU, argued that the sunset clause should be a short timeframe to ensure the issue of IM receives urgent policy attention.
2.79Professor Gray suggested including a sunset clause of about 12 months would enable the Government to work out how to proceed with the future of IM, noting that if that is not enough time than it should have to go back to parliament.
2.80The ALPA was also concerned that a sunset clause was not included in the bill, but also proposed that a designated review period with thorough and regular reviews be included in the legislation.
2.81The CLC, APO NT, EJA and UnitingCare Australia all recommended that for the period in which any form of compulsory IM remains, there must be simple and practical ways for participants to demonstrate that they do not require compulsory IM and be able to exit the scheme. EJA explained:
We understand that the current Bill makes no functional changes to compulsory [IM] exemption and exit processes, with exemptions limited to a maximum of 12 months and subject to monitoring of behaviour - including with regard to parenting, school enrolment and attendance, work or study and indicators of financial vulnerability. The decision-making principles for individual exemptions are to be determined by legislative instrument.
Compulsory [IM] exit criteria and processes for seeking exit are complex and opaque. The onerous exit application process is a significant barrier for people whose first language is not English and for people with low level English literacy; and for vulnerable women and young people in urgent need of access to cash due to domestic violence and/or homelessness. There is no provision enabling indefinite exit from compulsory [IM] in the current legislation, and there is no reform provided in the Bill. This means that participants at risk of or already experiencing acute harm as a result of compulsory [IM] will not be able to be permanently exempted or exited from the program.
2.82At the committee’s hearing, DSS confirmed that it did not have a specific timeline for when compulsory IM would be phased out as it was contingent on finalising the Government’s approach to consultation on the future of IM.
2.83In relation to the inclusion of a sunset clause in the bill, the Minister stated:
It is not appropriate for the regime itself to sunset as this could have a range of unintended consequences if appropriate transitional legislation is not passed prior to the sunset date. To demonstrate the Government's commitment to ongoing and meaningful consultation on the future of IM, the legislative instruments that will operationalise enhanced IM will be self-repealing after a set period of time.
These instruments will be made concurrently with commencement of the Bill and will be subject to parliamentary scrutiny and disallowance.
2.84DSS confirmed that all legislative instruments have a standard 10-year sunset clause and noted ‘it would be up to the government to determine whether they want to do something outside of that standard clause’.
Committee view
2.85The committee thanks the individuals and organisations who took the time to share their views and recommendations on the bill and, more broadly, on the future of IM in Australia. The committee was encouraged to receive support from submitters for the abolition of the CDC program.
2.86The committee acknowledges the concerns raised by submitters and witnesses during its inquiry and notes the support from many for the removal of all forms of compulsory IM.
2.87The committee reiterates that the bill represents another step in the Government’s reform of Australia’s IM arrangements. The committee echoes evidence received through previous inquiries, and this current inquiry, which emphasise the importance of taking the time to conduct meaningful consultations and engage in co-design in the transition away from compulsory IM. This bill continues the Government’s commitment to reform IM by introducing the SmartCard which responds to feedback provided by communities that the technology under the IM regime was outdated and no longer met their needs. The SmartCard will provide participants access to a modern banking experience with direct customer contact and a dedicated phone line through Services Australia, rather than a third party, whilst consultations are ongoing on the future of IM.
2.88The committee recognises that wrap-around services are an important part of the mix in improving service delivery, addressing social issues, and supporting economic development and participation. To this end, the committee welcomes support from submitters for the Government’s announcement of $25 million in funding to develop Local Service Plans to support job opportunities, economic development and promote self-determination and choice in former CDC program communities.
2.89DSS and Services Australia have reassured the committee that support will be provided to participants who choose to move to eIM, as well as new eligible entrants to the program. This support will be provided in the form of targeted and culturally appropriate communications, a dedicated phone line for managing day-to-day customer queries, and individual comprehensive discussions with participants considering transitioning to eIM, whereby participants will only be transitioned on request and where express and informed consent is provided.
2.90The committee acknowledges the concerns raised about digital literacy and technology accessibility within some communities impacted by eIM. The committee notes that part of the Government’s $25 million support package for former CDC program communities includes up to $7.2 million over 2022–23 to 2023–24, to deliver mobile and internet services and digital literacy support, including community education and awareness, in regional and remote Northern Territory communities.
2.91In relation to concerns raised relating to the discretionary powers provided to the Minister, the committee is reassured by the advice provided by DSS and Services Australia that the bill does not confer any additional discretionary powers on the Minister or the Secretary as it recreates the same measures and discretionary powers for eIM in Part 3AA as are available for IM under Part 3B of the Act. Furthermore, as advised by DSS and Services Australia, the Minister would not extend an eIM measure to a new location without first consulting affected communities and other stakeholders, consistent with best practice and the requirements of the Legislation Act 2003.
2.92The committee acknowledges the concerns raised by some submitters in relation to the bill’s compatibility with human rights. The committee is resolute in its support for a social services system underpinned by self-determination and is cognisant of the need to work towards a model that addresses the needs of FirstNations peoples, who are often disproportionately impacted by IM programs. The committee supports the intentions of the Government to move towards a voluntary model of IM which would facilitate individual self‑determination. The committee notes that extensive and culturally appropriate consultation and the implementation of wrap-around support services are essential in transitioning to a voluntary model of IM that is sustainable in the long-term and achieves positive outcomes for individuals and communities. The committee reiterates the transitional nature of this bill.
2.93The committee acknowledges the commitment made by the Government to continue undertaking extensive consultation with communities, First Nations leaders and other stakeholders on the long-term future of IM. The committee notes the explanatory memorandum states that the transition will be a staged approach with any future evaluation focused on the experience of participants coming off the programs and the effectiveness of support services. Furthermore, that DSS will consult with affected communities to ensure that the evaluation methodology is fit for purpose, noting this may include co-designing an evaluation methodology with communities, and identifying measures the communities see as important. The committee notes that DSS confirmed at its hearing that its approach to consultation on the future of IM was still being finalised.
2.94Once finalised, the committee encourages DSS to publish a publicly available timeline that details its plans for:
(a)consultation on the future of IM;
(b)evaluating the transition off programs and the effectiveness of support services; and
(c)timeframes or targets for the next phases of IM reform.
2.95Submitters raised concerns that no sunset clause was included in the bill, pointing out that the CDC legislation always included an end date, after which new legislation would be required to extend the policy. Furthermore, that the inclusion of a sunset clause would provide greater confidence that this bill is a transitional arrangement. The committee acknowledges that a sunset clause could provide reassurance of the Government’s intention to transition away from compulsory IM, however it notes that the inclusion of a sunset clause in the bill may have a range of unintended consequences if appropriate transitional legislation is not passed prior to the sunset date. As an alternative, the committee considers that a review period may be a viable option.
2.96The committee recommends that the Australian Government consider whether including a designated review period is practicable and facilitative to the Government’s policy intent to move away from compulsory income management.
2.97Submitters also recommended that for the period in which any form of compulsory IM remains, there should be simple and practical ways for participants to demonstrate that they do not require compulsory IM and be able to exit the scheme. The committee encourages DSS to explore options for making this process more user-friendly.
2.98Subject to recommendation 1, the committee recommends that the bill be passed.
Senator Marielle Smith