Welfare gives Turnbull a values-based agenda to run with

To understand the human and policy challenge the nation faces on welfare, consider the provincial city of Bundaberg, a lazy, subtropical sugar town known for its rum distillery and home to many famous Australians, from Bert Hinkler to Don Tallon.

Bundaberg, along with the West Australian goldfields including Kalgoorlie, is the location for one of the next two trials of the Turnbull government’s cashless debit card, intended to combat the lethal damage alcohol, drugs and gambling do to welfare recipients, and ultimately encourage the transition to work.

Human Services Minister Alan Tudge tells The Australian: “Bun­daberg is an example where you have a combination of jobs available in concert with long-term ­intergenerational welfare dependence. At 23.5 per cent it has the second highest youth unemployment rate in Queensland, and of those people we estimate 90 per cent had a parent who was on welfare in the last 15 years.

“And the best estimate from our actuarial analysis is that 90 per cent of people will be on welfare in a decade’s time.

“This is an area where thousands of international backpackers choose to travel in order to get entry-level jobs on farms, orchards and in the abattoirs.

“On the one hand you have thousands of Australians sitting idle on welfare and on the other hand you have thousands of international backpackers getting entry-level jobs. I don’t blame business for employing international backpackers, who they know will probably turn up on time, work hard and arrive the next day. But it’s not a great social policy outcome.”

The cashless debit card has inspired deep and emotional conflict. It has been trialled previously, in Ceduna in South Australia and in the East Kimberley. It means 80 per cent of an individual’s welfare payments are placed into their cashless debit card account, which does not work at liquor stores and gambling houses, or for cash withdrawals. The remaining 20 per cent is placed in an ordinary savings account.

“The results of the trial are encouraging,” Tudge says. “There is less public drunkenness, less gambling, fewer alcohol-related hospital admissions, and people are engaging with the support services and working to improve their lives.”

He says the support of local community leaders has been vital. Labor backed the initial legislation but says its position depends on having local support for a trial. The Greens attack the concept as a “patronising, paternalistic and ideologically driven attempt to manage the money and hence the lives of people living below or near the poverty line”.

Their aim is to rally on-the-ground opposition to kill any further trials. The scheme reveals a fundamental divide over welfare in Australia. Tudge says: “Bundaberg shows that even when you have the presence of work you can still have intergenerational welfare dependency.

“As a consequence there must be levers to encourage people at every step to take any job which is available because we know any job is better than being on welfare. Welfare is not there to be spent on booze, on gambling, on drugs.”

The final evaluation by Orima Research found the trials had been “effective” in cutting alcohol and gambling at both sites. It was “suggestive” of progress in reducing illegal drug use. There was “some evidence” of reduction in alcohol and related violence. There had been “widespread positive spillover benefits”; and although there were initial negative attitudes towards the program, acceptance “increased over time”.

This is not a ringing endorsement. Nor is it sufficient to vote down the trials. Yet there is a powerful sentiment that trials must be opposed in the name of rationality and evidence-based policy. You might have thought a trial is a trial is a trial. Not so — and the Australian Council of Social Service surely invites scrutiny on this front.

ACOSS opposes any extension of income management including the cashless debit card trials. It argues there is “no conclusive evidence” these measures work or improve people’s lives. Beyond this, ACOSS also opposes another budget measure — trials across three locations involving random drug testing of welfare recipients with the aim not of reducing payments but securing treatment to provide for a better life.

The government’s decision to tie welfare payments to the option of drug testing has infuriated the welfare lobby, health professionals, the Greens and the Labor Party. Drug testing is now applied across many sections of our life, including for car drivers. Evidently it cannot be applied in the welfare sector.

The critics say individuals will be too damaged, and they already know from overseas projects the “drug” program cannot work. Hence, any trial should be banned. Labor attacked the drug testing trial as the “sign of a desperate government looking to distract from its political problems”.

Addressing the culture of our welfare agencies, Tudge says: “There is almost a complete reluctance to accept there is a welfare dependency problem in Australia and address it. The agencies understandably encourage us to look at the opportunity side and they are right to do that, but there’s also the responsibility side.

“I get disappointed and frustrated that sometimes they won’t acknowledge there are very significant intergenerational dependency welfare problems even in the presence of work. You do nobody a favour by ignoring this key fact. In my view, long-term welfare dependency is a poison. It sucks the motivation, frequently removes capacity, and people lose confidence.”

Tudge says he has seen this at close quarters in indigenous communities — a reference to his experiences as deputy director of Noel Pearson’s Cape York Institute, where he oversaw a welfare reform agenda.

Tudge’s approach has been influenced by indigenous leaders such as Pearson and Warren Mundine, and their belief that “passive welfare kills initiative”.

As for ACOSS, its rock-bottom message is its recent statement rejecting the “no jab, no pay” policy of the Turnbull government to reverse the alarming fall in immunisation rates. Social Services Minister Christian Porter says ACOSS has “lost any sense of perspective” and that its opposition “is one of the most stupid things I have heard”.

Porter says the policy had led to immunisation rates rising across all age groups, and asked: how can saving children from insidious, horrific and potentially lethal disease become an attack on people’s rights? If you think there’s a bigger issue here, you’re right: welfare policy led by Porter and Tudge is being put on a more substantial and persuasive platform likely to command majority public support. The logic for Malcolm Turnbull is to raise its profile over the next 18 months as a policy-political lever for his government pre-election.

The essence of the policy is apparent: using the welfare system to drive change, promote accountability, invest higher expectations from people and produce better outcomes. This is the dividing line. It is fiercely resisted by the welfare agencies, Greens, progressive media and many health professionals and bodies. The latter’s claims to reflect evidence-based policy also demand to be heavily scrutinised.

Tudge says the cashless welfare card is no panacea but adds the rider: “Very few other initiatives have had such impact.” If the trials are successful his aim is to extend the rollout. He goes to the essence of the conflict: “Income from welfare is not the same as income from a job. The welfare agencies frequently equate the two. But they are different. A job fundamentally provides dignity and structure in one’s life. In my view that central proposition has to be deeply understood.”

This is the key to the policy, political and ideological struggle now unfolding. Tudge recently said the cashless welfare card “could solve world peace” and the Greens would still be ideologically opposed. His starting position is that the status quo is intolerable, an insult to people and to policy.

At a time when the Prime Minister needs to mobilise a values-based agenda, this opportunity can scarcely be overlooked.