An Australian experiment with conditional welfare findings from the evaluation of Income Management in the Northern Territory

Transcription

1 An Australian experiment with conditional welfare findings from the evaluation of Income Management in the Northern Territory 1 October 2013 Rob Bray Research School of Economics ANU

2 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 2

3 Australia s welfare system Effectively universal needs-based, non timelimited income support payments, but: Categorical (Age/Disability/Parent (child <6/8 yrs.)/carer/unemployed) with varying eligibility requirements Means tested income and assets Complemented by Family Payments Currently 4,845,000 income support recipients 3

4 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 4

5 Indigenous Australians Indigenous Non- Indigenous Australia NT Male Life Expectancy at birth (years) Child mortality (per 1,000) Year 7 literacy (% reaching national standard for reading) Completed high school (Yr 12) (per cent of year olds) Employment to population ratio Age standardised imprisonment rate (per 1,000 persons)

6 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 6

7 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

8 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 8

9 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 months 9

10 Basics card Debit card which can be used at approved merchants 10

11 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 11

12 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. 12

13 An urban prescribed community 13

14 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 14

15 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 15

16 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 16

17 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 Statement Landmark Reform to the Welfare System, Reinstatement of the Racial Discrimination Act and Strengthening of the Northern Territory Emergency Response

18 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 18

19 Key numbers As at April ,600 subject to IM in the Northern Territory Compulsory 13,900 Voluntary 3,600 Child Protection - 18 Vulnerable Administrative cost: $A million per annum $A 5,000 per person per year 19

20 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% singles 20

21 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 21

22 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. 22

23 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 23

24 Did IM make things better for family? Proportion of respondents (%) Female Male Female Male Female Male Indigenous CIM Indigenous VIM Non-Indigenous CIM Made things better Made no difference Made things worse 24

25 How often do people feel Discriminated against Not fair Non-Indigenous Compulsory Indigenous Voluntary Indigenous Compulsory Non-Indigenous Compulsory Indigenous Voluntary Indigenous Compulsory All the time Most of the time Sometimes Hardly ever Never 0% 20% 40% 60% 80% 100% 25

26 Control over money 60 Proportion of Respondents (%) Female Male Female Male Female Male Indigenous Compulsory Indigenous Voluntary Non Indigenous Compulsory More control now About the same Less control now 26

27 Aim for IM 80 Proportion of respondents (%) Female Male Female Male Female Male Indigenous Compulsory Indigenous Voluntary Non-Indigenous Compulsory Stay on income management Not sure Get off income management 27

28 Perceived outcomes for children Healthier More food Safer Better school attendance Happier Cultural activities Indigenous Compulsory NTER Indigenous Compulsory non-nter Indigenous Voluntary NTER 28 Balance of improvement less poorer outcome (%)

29 Sufficient money for food - change 60% 50% 40% 30% 20% 10% 0% -10% -20% 29 Average Improvement Indigenous CIM Indigenous VIM Non-Indig. CIM Reference Indig. Ref. Non-Indig. Perceived Reported

30 Model results Frequency of feeling Relative to control pop. Coefficients βstdy Indig. CIM NTER Indig. CIM non NTER Indig. VIM NTER Discriminated against 0.547** 0.440** 0.532** Embarrassed 0.632** 0.526** Not fair 0.520** 0.529** In control of life 0.374* 0.795** Better for self and family ** In control of money 0.362* 0.828** Not worried * Safer **

31 Model results Perception of change Indig. CIM NTER Indig. CIM non NTER Indig. VIM NTER Managing your money ** Saving money * 0.368* Having enough food 0.534** 0.312** 0.629** Knowing how much money 0.329* Looking after family obligations

32 Model results change in experiences Coded so that +ive is an improvement Indig. CIM NTER Indig. CIM non NTER Indig. VIM NTER Ran out of money for food Ran out of money for clothing Ran out of money for medicine Rent on time * Bond Utilities Difficulties because gave to others 0.495** * Asked Emergency Relief Travel * School activities Survey participants (d)

33 Exemptions from IM Non- Indigenous Indigenous Apply Applications successful 48.7% 13.2% 79.8% 36.5% Exempt 38.8% 4.8% 33

34 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 34

35 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 NZ 35

36 Evaluating New Income Management in the Northern Territory: First Evaluation Report Audit Report: Administration of New Income Management in the Northern Territory Productivity Commission: Overcoming Indigenous Disadvantage: Key Indicators