Macklin's welfare fight is only the beginning

WELFARE in Australia will enter a new phase of ideological struggle with the Rudd government, spearheaded by Indigenous Affairs Minister Jenny Macklin, embracing and extending the income management principle.

In a justified move Tony Abbott this week reversed the Coalition's rejection of Macklin's bill. Abbott decided to back this reform. It means the Labor Party's historic break with 100 years of welfare policy tradition will now pass into law. It also means a vital theme of the Howard government's Northern Territory intervention will endure and be entrenched, despite Macklin's significant modifications to that intervention.

When Macklin's blueprint was authorised by cabinet's strategic budget and priorities committee, it won firm backing from Kevin Rudd and Julia Gillard. This is an authentic new project for the Labor Party, though much of the party's constituency is horrified. By contrast, many Coalition MPs are sceptical about Labor's delivery on its reformist claims.

Macklin's core principle is that, where applicable, 50 per cent of regular welfare payments be compulsorily quarantined for essential needs (as distinct from being spent on grog and drugs), that this scheme be applied from July this year across the entire Territory, towns and remote communities, regardless of ethnicity, and, after a subsequent evaluation, be applied on a national basis for those individuals who meet the criteria.

This extends the policy beyond the 75 communities in the initial Howard intervention. Putting income management into white suburban households is a turning point. It is a political and cultural threshold; it recognises that in Australia's suburbs there are white households crippled by alcoholism and unable to manage their own children.

Asked about income management, Macklin said: "If you look how it has worked, it has helped families put more food on the table. It's practical and beneficial. So many people have told me how much it has helped them spending more on food, not alcohol. What I want to do is link income support and school attendance, study and work. These links are not in place now. We know school attendance is a real problem. We need to get these links together to fight passive welfare.

"Where there is evidence that children are better off when parents have their income managed, then I believe we have an obligation to those children to follow this policy."

Asked if she was embarrassed about the compulsory nature of income management, Macklin said: "Not at all, I think it's a beneficial tool."

She stresses the policy allows people to voluntarily enter income management. The point, Macklin says, is that Labor "is committed to progressively reforming the welfare system to foster individual responsibility".

Labor's restoration of the Racial Discrimination Act, as it pledged at the 2007 poll, is designed in Macklin's words to put the intervention's new policies into a "sustainable long-term development phase".

This requires Labor's policies to be either non-discriminatory or beneficial for indigenous people and a legal challenge to Macklin's bill on this basis is inevitable.

The welfare lobby is split on Labor's project, with a majority in ideological rejection. The most hyperbolic denunciation comes from the St Vincent de Paul Society: "Income management is returning social policy in Australia to the Depression-era Sustenance Allowance, commonly referred to as the `susso'," the society claimed in its Senate committee submission. "The present legislation seeks to turn back the clock to provide the modern equivalent to a food ticket."

Unable to accept Labor's motives, it claims Macklin's compulsory income management "is a cynical manoeuvre to get around the Racial Discrimination Act". Not content with just a racial complaint, it criticises Labor for class and sex discrimination as well.

But the main attack against Macklin is spearheaded by Clare Martin, who now heads the peak welfare body, the Australian Council of Social Service and is the former Territory chief minister whose failed policies provoked the Howard government's intervention in the first place.

The recent ACOSS submission to the Senate committee assessing Macklin's bill complains about the language of "fighting passive welfare", says terms such as "welfare payment" and "welfare recipients" are pejorative and argues the policy will stigmatise people and entrench social exclusion.

ACOSS rejects any role for the social security system to effect "social or behavioural change" and insists the system be exclusively directed to fighting poverty by support payments. It wants the compulsory income management provisions withdrawn from Labor's policy. It repudiates Macklin's position as a "major shift" that is "expensive, intrusive and unnecessary". It refuses to accept the legitimacy of compulsory income management as a device to fight passive welfare.

Indeed, Martin in her March 11 speech to the Dame Roma Mitchell Memorial Lunch, backed a human rights act with the manifest purpose of limiting or stopping a Labor government from implementing this policy.

Here is the essence of progressive tactics: resort to courts to win policy agendas lost with both sides of politics and public opinion.

By contrast, the Brotherhood of St Laurence argued conditions on welfare were "deeply rooted in Australian social policy" and said that "with the appropriate balance we support the proposed extensions to income management".

When Macklin's policy was debated by caucus, some Labor MPs said they wanted income management in their own seats. Nick Champion, whose South Australian seat contains a number of working-class areas, says most people want to work but it takes only "one damaged family to disrupt a street".

The bill, Champion says, means "that if you are on the wrong track, if you are making the wrong choices, if you have lost hope . . . then the community through the government has both a right and an obligation to intervene".

Opposition families, housing and human services spokesman Kevin Andrews warns against Macklin's softening of the income management categories. Andrews estimates that 42 per cent of welfare recipients in the affected Territory communities would be excluded under Labor's policy. He believes this is too high, that it will expose too many vulnerable indigenous people to exploitation and the Coalition should not take Rudd and Macklin at their word. Labor's policy is legitimised by the consultations it conducted across the Territory.

The summary of these consultations said: "The majority of comments said that income management should continue and a minority said it should cease."

A political veteran from Labor's Left, Macklin insists her scheme will be extended nationally. Her credentials are impeccable; the idea that Macklin is doing this for cheap politics is inconceivable. This argument, easily available against John Howard, cannot be mobilised to discredit Labor.

This policy constitutes a change in Labor thinking and values. Macklin's test will be to prevail against serious resistance at the point of implementation.