What is Welfare Reform?

Welfare Reform is a process of moving from passive welfare dependence to engagement in the real economy. This includes individual engagement in labour markets (ie real jobs) and private property (ie home ownership) and limiting the role of governments (federal, state and local) in people’s lives to be more similar to that provided by governments in mainstream Australia.

Welfare Reform is also about social development. Social development underpins the ability of individuals to properly engage in the real economy and make meaningful choices. It is also a goal in its own right.

Cape York is socially underdeveloped. Basic social norms that are the glue to any society (such as sending children to school, respecting others, and taking care of one’s family and one’s house) have significantly deteriorated in Cape York communities.

This deterioration has occurred in the last 30 or 40 years: it was not a feature of Cape York communities in the 1960s. The breakdown is predominantly attributable to two factors: grog abuse and passive welfare dependence.

Widespread grog abuse has a corrosive effect on any society anywhere. Grog came into the communities in the late 1960s and early 1970s, and since then consumption has reached epidemic levels. Excessive grog consumption has become a normalised behaviour: between 50% and 80% of Cape York adults drink at harmful levels. It is likely that a significant number of individuals are addicts.

Acting in concert with grog abuse has been welfare dependence. It is now multi-generational. Long term welfare dependence saps people of motivation and erodes personal responsibility and individual capacity. Passive welfare has also meant that people have become less mobile over time as the incentives to stay in the community have strengthened (such as CDEP and free houses) and individual capacity has diminished.

Well intentioned government services (introduced to counter the social decline) frequently exacerbate passivity and further erode personal responsibility by doing tasks for individuals that would normally be done by individuals. Over time, it becomes normalised and expected that service providers will fulfil certain tasks, rather than individuals or families taking responsibility to fulfil them. Individual capacity is hence further deteriorated.

Welfare Reform is premised on the view that in order to engage individuals in the real economy, and in order for there to be social development in the communities, four things must occur: rebuilding of norms, reform of incentives, normalisation of housing and a retreat of government from the (rightful) domain of individual responsibility.

Click here What is Welfare Reform for more details of these four principles of welfare reform, including some commonly asked questions.

The Welfare Reform Design and Engagement Project

The Cape York Welfare Reform Project started in June 2006 when the Australian Government committed $3 million to the project.

The Welfare Reform Project included a design component and a community engagement component. A Community Engagement team engaged leaders and community members in a dialogue around social norms and payment reform. Eight engagement staff (two staff were based in each community) were appointed to work with leaders and individuals to ensure community involvement in the project’s design. In late 2007, after a 12 month Community Engagement Process, the communities of Aurukun, Coen, Hope Vale and Mossman Gorge each gave their final agreement to participate in the Welfare Reform trial.

In parallel with the community engagement process, the Institute’s Cairns-based staff continued the research and policy design work. The results of the community consultation efforts and the policy development were reported to the Australian Government in two comprehensive documents in 2007. These two reports constitute the key deliverables of the Cape York Welfare Reform Project.

Click here The origins of the Cape York Welfare Reform trial for further detail, including the From Hand Out to Hand Up Reports.

Implementation of Welfare Reform

Welfare Reform is currently in the implementation phase. The Cape York Welfare Reform trial commenced operation on 1 July 2008 and will run for three and a half years until 1 January 2012.

The Institute is currently coordinating the ongoing implementation of the Welfare Reform Project in the four communities of Aurukun, Coen, Hope Vale and Mossman Gorge in close partnership with the Australian and Queensland governments.

The Cape York Welfare Reforms have a number of projects that will be delivered within four streams of activity (social responsibility, economic opportunity, housing and education) and is designed to enable projects and streams to be added over time.

A. Social Responsibility

Conditional welfare has been introduced. Four obligations will be attached to welfare payments for all welfare recipients in the Welfare Reform communities. The four obligations are:

• making sure kids attend school

• keeping kids safe from harm and neglect

• not committing drug, alcohol or family violence offences

• abiding by tenancy agreements

From 1 July 2008, the Family Responsibilities Commission (FRC) – a new State statutory body – will be charged with ensuring that people live up to these responsibilities. The FRC will have the power to determine whether a breach of obligation has occurred and the appropriate recourse for a breach. However, if welfare recipients do not adhere to these expectations, then the FRC may put part or all of their welfare under income management. This means that welfare payments are put aside for essential expenses such as housing, food, clothing, education and medicines. They will have less or no cash at their discretion.

The FRC is primarily about setting clear expectations in regards to abiding by basic social norms with the message that money will no longer be provided to fund irresponsible behaviour. However, support services can assist individuals to meet these obligations by helping individuals address the underlying behavioural issues that might be driving the breaches. Accordingly, support services will assist community members to meet their welfare obligations and assist them to deal with problems that may be causing them to breach the expectations outlined above (such as financial management problems or alcohol addiction). Drug, alcohol, parenting and gambling support services will be available to all community members.

B. Economic Opportunity

A number of initiatives will be implemented as part of the trial to increase the economic opportunities available to members of the Welfare Reform communities.

CDEP reform is a critical precondition for individual engagement in the real economy. The Australian Government committed to reforms to Indigenous employment services and programs to enhance incentives to take up real jobs, education or training, improve work readiness and people’s capacity to find work both within and outside their communities. CYI is still discussing with the Australian Government as to precisely what CDEP reforms will be implemented in the Welfare Reform communities as part of the trial.

Some CDEP positions will become real full-time jobs creating opportunities for local community members to be employed under normal employment arrangements. The Australian Government has agreed to the creation of 40 jobs in service delivery by converting existing CDEP positions into real jobs.

The Australian Government committed to boosting local job creation through infrastructure which will make communities more attractive for businesses to establish and operate. This is likely to take the form of Business Precincts in Aurukun and Hope Vale.

The Australian Government also committed to improving support required for self-employment opportunities and the development of small businesses. This will likely be in the form of mentoring and business support services to local individuals. This includes encouragement of entrepreneurship, testing of business ideas and business models.

C. Housing

Tenancy agreements will be normalised in existing indigenous community housing. Tenancy arrangements will be outsourced to an independent provider who will focus solely on allocating, managing and maintaining properties. Each household will be asked to sign a tenancy agreement which outlines the standard obligations and rights of households. This has already commenced in Hope Vale, and will continue to be rolled out in the other three communities.

There will be opportunities to families for home ownership to families through both the sale of existing public houses and through the construction of new houses on private ownership basis. The Queensland Government has recently passed legislation to enable the provision of 99 year leases to be granted on communal land. This is an important prerequisite for home ownership on communal land. The Australian Government, through Indigenous Business Australia (IBA), offers low-cost loans for Indigenous people wanting to acquire their own home.

The Pride of Place project encourages families to take pride in and responsibility for the condition of their homes and backyards. Home improvement funds will be available to eligible households. This project has also commenced in Hope Vale, and will be rolled out to the other communities.

D. Education

A number of education initiatives were implemented from the start of the 2008 school year. The initiatives focus on improving literacy at primary schools, and supporting children to successfully complete primary school and then attend boarding schools at secondary level.

Making Up Lost Time In Literacy (MULTILIT) is being delivered in primary schools in the Welfare Reform communities. MULTILIT is a proven form of literacy instruction that delivers significant gains in reading and spelling for low-progress readers. MULTILIT provides direct support to low progress readers, embeds the MULTILIT methodology in regular classrooms, and operates a reading club for parents to read with their child and engage in their learning.

The Case Management Framework supports families to ensure their kids attend school everyday, are on time and have an uninterrupted school day. The Case Management Framework (CMF) uses a behavioural management approach to maximise student attendance by working with parents, students, schools and the broader community to set and meet the expectation of 100 per cent attendance. Case Managers are based in each Welfare Reform trial community and visit parents if a student is late or absent from school, makes referrals to services, supports parents in meeting their obligations and engages with all community partners and service providers.

Student Education Trusts (SETs) are a money management service that enables parents to support their child’s education and development from ‘birth to graduation’. Through responsible income management, parents make regular contributions to their child’s SET which they then use to meet education-related expenses. SETs build parental responsibility by setting expectations of parents and schools to increase parental value of, and commitment to, education.

The Welfare Reform communities do not always provide an environment for children that is conducive to successful study. All secondary students in the Welfare Reform communities are now eligible to receive the ABSTUDY away from home entitlements, and by–pass local secondary schools to attend schools away from home. The parental means test will still apply.

Relationship between Welfare Reform Project and Northern Territory Emergency Response The NT intervention and the Cape York Reform Agenda are unrelated processes and the Cape York Institute had no prior knowledge of the Northern Territory emergency response. The main difference between the welfare reform components of the Cape York Agenda and the Federal policy in the NT is that Cape York Welfare Reform does not include blanket quarantining of benefits.

The Institute’s position in relation to the Northern Territory intervention, outlined by Noel Pearson in the Weekend Australian on 23 June 2007 Politics Aside, An End To The Tears Is Our Priority is that decisive action was and is needed in the Northern Territory. The current government is now in a position of good opportunity because the previous government has laid the groundwork in practical reform through its intervention. “The main practical thrust of the Cape York reforms and the Northern Territory intervention are correct”, Noel Pearson told The Australian on the 25 April 2008.