BRAY, Mr Jonathan Robbie (Rob), Private capacity

KATZ, Professor Ilan Barry, Social Policy Research Centre, University of New South Wales

[09:38]

CHAIR: Welcome. Is there anything you wish to add about the capacity in which you appear?

Prof. Katz : I appear because I have led a number of evaluations of income management and other similar programs.

Mr Bray : I am with the Centre for Aboriginal Economic Policy Research at the Australian National University.

CHAIR: Could you each please confirm that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you.

Mr Bray : I have received and read the material; thank you.

Prof. Katz : And so have I.

CHAIR: I now invite you, if you would like to, to make a short opening statement, and then we will move to questions.

Mr Bray : Just as a little bit of background, I am an ex public servant. I spent about 30 years in the Australian Public Service working in areas such as employment, health, social security policy. I in fact did some of the early analysis back in 2006 which led to the implementation of income management and then moved off to the pension review before moving some years ago, in 2010, to the Australian National University, where I am a research fellow. I am one of the people who worked on the evaluation of new income management over the period 2010 to 2014.

There are two issues that I can help inform the committee on. The first one is that I am able to provide information on the evaluation of new income management in the Northern Territory. Secondly, I have some specific comments I can make on the trial. Turning firstly to income management evaluation, I would stress that the evaluation of income management in the Northern Territory is very relevant to this particular trial. The measures are very, very similar in how they operate. There are some differences, but I think on balance the substance of the measures is very similar. It is basically putting some limitations on how some people can use some of their funds.

Turning to what we found in the evaluation of new income management, the first was effectively that the program did not achieve its goals. It did not change behaviours and it did not improve outcomes. In essence, we actually found that rather than creating independence the program created greater dependence upon the welfare system. Tools, rather than being used by people to give them more control in their lives, were really used as tools of greater dependence. There was a massive diversity of outcomes, though, across the program, and a very large diversity of views, and I would stress that very strongly. It did work in some cases. Where it tended to work was where an individual was very specifically identified as having a problem—then, not only were they income managed but that was part of a group of services being provided to the person—and also where the person was willing to change. The third point is that where people wanted to get around the system they found ways to do so. Those who wanted to avoid the system could do so.

There has been the suggestion that the results of the evaluation in the Northern Territory were at odds with other research that has been done on income management. I do not believe that is the case. And, I am sorry, I have not checked on the protocols for tabling, but I do have a draft working paper that I have been working on which puts a lot of those findings in context relative to the other bits of research. I would be happy to talk more about that, but I will move very quickly in my introduction onto the debit card trial. On the basis of the NIM experience I doubt whether it is going to be effective. I am very pleased to see the name change to debit cards and that you have not used words such as the 'healthy welfare card' or 'income management', because that is really rhetorical spin, and that is not what these cards actually achieve. So, I think just having a factual name is very important.

The design and implementation of the program are essential. And while there is talk about a trial, and looking at the draft legislation, it is very hard to relate how a trial in a couple of remote areas is informing across a wider implementation. And this is really important, because a lot of the issues in remote areas will not identify the problems of any extension of this sort of program to, for example, an urban area. Eighty per cent is very high and very limiting and, in the case of voluntary, I think it is not going to have the same flexibility that we saw in the Northern Territory. There are a lot of people on voluntary who use income management very, very flexibly, and 50 per cent for many was a way of achieving that.

The issue of rent and other related payments are really important. When I look at the legislation, I think the provision is that the secretary can make payments to a business or organisation nominated by a person. I think that is the provision under which rent payments are made. I may be incorrect, but my reading of the legislation is that. That does not cover all of the other circumstances that people live in—the group household, where one other person pays the rent and you hand over your cash, renting from your parents, sharing with other relatives of yours. Trying to work out the detail of that is phenomenally important, and that is a difficulty with this sort of measure. If you are renting from your parents, how do you know what the rent is and what might come back as cash in hand? There are a lot of very detailed implementation issues that need to be worked out.

The store issue, once again, as I understand it, has not been worked out fully. What do you do in Ceduna where the store sells both alcohol and groceries? I have heard talk that they might have two EFTPOS machines. Does that mean two queues, and you have to go into a second queue if you have the debit card?

There is reference to community bodies. When I look at clause 124PE there is nothing in the legislation, as I read it, of any sense of the representativeness of those bodies.

Senator SIEWERT: Is that the community body?

Mr Bray : The community body. I think it says it is any incorporated or unincorporated body that does any sort of thing in terms of community safety et cetera. You could have, for example, a group of local policemen deciding that they are interested in community security. As I read the legislation, that could be deemed to be a community organisation for the purposes of the act. I think there is a real issue there about representing the community.

Finally, on evaluation: the evaluation is important, especially as one of the goals in the legislation is to determine whether such a reduction decreases violence and harm. I think they are the words. How the evaluation is going to be done is going to be critically important, and there are many issues that need to be taken into account. The areas have already been announced. If there is outmigration of particular people from those locations, that is likely to have already occurred. How do you start managing that?

There is a need for enormous amounts of access to data, including police, schools et cetera. Have all the protocols for that been put in place? Our experience is that trying to get hold of that sort of data is phenomenally difficult. All of those protocols need to be put in place.

There is talk about having separate packages or additional support flowing into the communities. You somehow have to differentiate all those effects. If you want to implement all these trials, then there is the question: do you put that set of packages into another location without the debit card so you have proper controls that you can compare outcomes? Finally, on the question of evaluation: evaluations are only important if they are taken note of and if people are willing to adjust policies on the basis of what evaluations find.

CHAIR: Professor Katz, do you want to make an opening statement as well?

Prof. Katz : Yes. I will make a short statement. I have led the evaluations in the Northern Territory, part of the Cape York Welfare Reform trial in Queensland and of the income management in the APY Lands in South Australia. The overall findings of all those evaluations, as Rob says, were that income management has a limited impact and has both negative and positive effects. Where it does work, it seems to work as part of a package of interventions, including family support, financial counselling, alcohol and drug rehabilitation et cetera. For some people it can act as a temporary stabilising mechanism when finances get out of control. What income management essentially does is structure people's lives very carefully, so for a short period of time when people's lives are out of control we found in some of these evaluations that that structuring can help in the short term. But, as Rob says, in the longer term it can often lead to people becoming habituated to the program.

It appears to be most effective when people are really motivated to change. There is very little evidence that in itself it creates behaviour change in the long term. Generally speaking—and Rob pointed to this—it comes as part of a package with a range of other services, and it is very difficult to tell whether it is the service provision rather than the income management or the debit card that makes the difference.

One thing that we found that Rob did not mention is that the community attitude towards the implementation is very important. In the APY lands the community actually requested the introduction of income management. It was introduced on a voluntary basis and there was some discussion about not only whether it should be introduced but the actual format. That turned out to be very important. Whereas in the Northern Territory it was simply imposed on communities. So the actual process by which the consultation takes place within communities is important. As I say, it should not be consultation only about whether it should happen or not but about how it is introduced.

To reiterate, although the practical issues might not seem very important, they are very important—how it actually works on a day-to-day basis. Some of the real frustrations people have are about the practicalities of using the BasicsCard or, in this case, the debit card. To reiterate again, it should be robustly evaluated. I think it is right to have a small-scale trial for about a year, but you will need to have some kind of benchmark to measure against. Also, as Rob said, it is very important to get accurate data and make the data available to an independent evaluator.

The overwhelming response we had from Aboriginal communities was that income management was a marginal issue. Their main concerns were around low incomes, lack of housing and infrastructure, and poor and unreliable service provision. The point is that one intervention such as income management or the welfare card is not going to be a silver bullet. These issues are deep seated and longstanding in many communities and clearly require a whole package of interventions if they are going to shift.

Finally, you need a really clear logic model which explains why the specific measures will lead to the outcomes that you are looking for. You also need to consider unintended outcomes such as spillover, where the problem is just shifted from one location to another. That is my statement.

Senator CAMERON: Thanks for your evidence. I have responsibility for human services, as the shadow minister human services. The thing that is exercising my mind after you, Mr Bray, indicated there might have to be two different EFTPOS machines to make this system work, is the question: what are the implications for a successful logistical rollout of this scheme if it goes wider? Are there technical problems that you have identified? Has that not been looked at?

Mr Bray : Because I am not a member of a government department and because I think they are still trying to work through a lot of these issues, I cannot say too much. I have heard odd bits of conversation and have been able to put some of the bits together and hence know about things such as the problem at the Ceduna store. In terms of what is important with the legislation, if there are not really clear and detailed implementation processes that can be reported to you, one has to be wondering what the legislation is providing. It is providing a blank cheque for doing an awful lot of things and, as Ilan said, it really comes down to the detail.

How does people having to have two bank accounts operate on a day-to-day basis? If 80 per cent of your money is on the card, how do you make those direct deductions? It is not entirely clear that Centrepay continues to operate. If there is this provision that you can only make payments to corporations, how do you do the rest? I have not seen any of the detail of that sort of operation. In the Northern Territory I know there were particular problems at particular times in some communities when communications were wiped out and EFTPOS machines stopped working. Those things become critically important if it takes three weeks or longer to replace a card in a remote community.

Senator CAMERON: There is Professor Langton's book about humbugging. Do you know if there has been any thought given to the fact that you could end up with a different type of humbugging, with people using the card to buy produce that is allowable and then selling that to access money for alcohol?

Mr Bray : We reported in the evaluation—and I will not dig out the actual numbers, but they are available—that people reported doing that. They had obtained alcohol in various ways. They had purchased goods and swapped them for alcohol. Some people used cards of some form or another. I presume under these new arrangements cigarettes will be quite tradeable as an item for alcohol. They had also gone to a taxi, booked a false trip and then got some of the money back as cash. There are many ways in which people can get around it.

To a certain degree, those things are almost necessary in the system or else, if you do not have some of this happening on the edge, all of the contradictions and the real constraints of this system become apparent. So there is almost a bit of interest in having some of this happen all the time. You do not want too much of it to happen because otherwise it becomes a total farce. But, in operational terms, you tolerate it a little bit just to have an efficient operation. It is part of the way it works.

Senator CAMERON: You indicated that people had to be willing to change. There is a lot of literature and lots of practical experience about the problems of alcoholism and getting people out of alcoholism. How do you do that in the context that Professor Langton raised—that there are not a lot of employment alternatives in some of these communities?

Mr Bray : It is a tremendous challenge. I will give you a brief answer, but I am not an expert in that particular field. In the end, a lot of these answers will have to come from Indigenous people from the communities themselves. On the other hand, where individuals in our community have always been treated as outsiders, gone to school and heard the odd racial joke about them, been sworn at and called all sorts of names, they do not feel part of a society. So there needs to be some enormous changes in white society in the first instance before you can expect to get some of these changes.

Prof. Katz : Can I respond to that? I agree; I think it is a complex problem. Alcohol is probably a symptom as well as a cause of many of the problems in those communities. So I think any approach really has to look at both the symptom and the cause itself. Alcoholics generally do not go off alcohol just because of lack of access to alcohol. They find ways, as the previous discussion has indicated, of getting around restrictions. Alcohol management plans in many Aboriginal communities have been relatively successful, but even there people always find a way around them. So I think it is a combination of restriction, but always there has to be real evidence based support for those people who do want to give up drinking. They will not give up drinking just by lacking access to money or to alcohol. There will always be ways around that.

CHAIR: We have got about 10 minutes left, Senator Siewert, so we are going to be tight. I will go to you, but I will have a couple of short questions at the end.

Senator SIEWERT: Senator Cameron has covered a few of the questions. That is great; I can ask other ones. I wanted to go to the point that Professor Langton made. I do not want to misquote, so I will not try. Basically, she thought—you heard her—that that was not a very good evaluation or that there were flaws in the evaluation. I have just had a quick read of your comparisons. I must admit I jumped straight to the conclusion, and I will read the rest of the paper later. Maybe you could (a) touch on a few of those in terms of the comments that Professor Langton made that you heard and (b) just outline a few of the conclusions you made about other evaluations and your evaluation.

Mr Bray : All right.

Prof. Katz : I did not hear Professor Langton, so I am going to leave this up to you, Rob.

Senator SIEWERT: I beg your pardon. Professor Langton was not persuaded by the report and she thought some of the changes could not be measured. That is a very short paraphrase.

Senator MOORE: And the evaluation should have happened throughout the process.

Senator SIEWERT: Yes, and the evaluation should have happened throughout the process—and in fact it did.

Mr Bray : I will start on that. The first one is—and, of course, everyone would declare this—that I do not believe, as Professor Langton stated, that we were ideologically driven in the evaluation. I think we did our absolute best to bring a non-ideological position to it, and I speak as someone who has worked for years with governments from the left and the right and has that sort of background. Turning, though, to the evaluation—and evaluation is challenging—my argument would be that the evaluation of NIM is the best of that package of evaluations that have been done to date. But even then we were not perfect. We could not cover everything. The department was unable to provide a lot of the data on a basis where we could actually get it in time to do some of the bits of analysis. Getting a lot of the more detailed outcome data from the police and other sources is not easy. Health data is often lagging in the system. So all of those are difficult. Yes, she is correct; you actually have to start beforehand. We did not quite start beforehand, but we had fairly early on in the piece some retrospective questions which enabled us to get some insight at the beginning. On the other hand, any evaluation that happens now is not happening beforehand, because those communities already know what communities may be covered by the program and, as I said, there will be out-migration. If you judge the overall outcomes for that location compared to another location, you have this displaced population that does not come up in the evaluation.

The other one to note is that there is a diversity of views and a lot of the previous evaluations relied upon views, and people's perceptions have changed and how people wish to report those perceptions have changed. In the first evaluation we found there were some really big gaps between what people said and what we could see in the communities. In one example we had an individual say that things had got better for the children, with high school attendance et cetera. The data showed no real change in child outcomes; in fact, there had been a deterioration in child outcomes.

We spoke about this with one of the communities afterwards. A woman looked at me and said: 'What else do you expect us to say? It would be a shame if we said things had got worse for our children; besides, if we said things had got worse for our children what would they do? Would they take our children away, again?' So relying upon community views is exceptionally difficult. On the other hand, getting hold of that hard data is not easy and requires enormous cooperation. One needs to see evidence, that it will be there, very early on.

Senator SIEWERT: Professor Katz, do you have anything to add to that?

Prof. Katz : I am very shocked that Professor Langton would say that about our evaluation. I have led three evaluations of income management. Two of them were largely positive. One of them was largely negative. So I do not think I could not be accused of bias, in any way.

Senator SIEWERT: She did not actually use the word 'bias'. I do not want to misquote her.

Ms Bradley : 'Ideologically driven' are the words I quoted.

Prof. Katz : Okay, sorry. I am hearing third-hand so it is difficult for me. But I was certainly not ideologically driven and I am very disappointed to hear people say that. I would agree with Rob that you are never going to get a perfect evaluation. I have led a number of evaluations of various government programs. It is very hard in a complex program, such as income management, to have a perfect evaluation but that one is, by far, the most robust evidence of effectiveness that exists in the world and one of the more robust evaluations of any government program that I have participated in. Although the findings can never be definitive, they are as close as you are going to get to definitive findings from an evaluation of a program such as income management.

Senator SIEWERT: Please take this question on notice as I am running out of time. Professor Langton referred to a family commission, which is very similar to the Cape York approach. What has your experience been of the different approach of Cape York around the family commission and the outcomes, if they have been any different, and what are those differences? I would appreciate your answer to that.

Prof. Katz : That is fine, yes. I am happy to respond.

Senator MOORE: I would like to put a question on notice too. I would really like to get some information back from you both on your experience of looking at the issues around a card in isolation from other community services that wrap around it. How do you evaluate the impact in a community, just of the change in a card process?

CHAIR: In relation to considering whether this trial should go ahead, which is what we are doing today, have either of you had the opportunity to speak to some of the representatives of the community in Ceduna about their views on the trial of a debit card?

Mr Bray : No, I have not spoken to any of the community in Ceduna. However, having spoken with a lot of communities in the Northern Territory, I am always very cautious in believing that there is a single community view. I have had many discussions with communities. I would have elders talk, normally providing some sort of consensus view, then afterwards other people would be talking with you and you get another set of views. There are diversities of views in Indigenous communities, as there is a diversity of views in every community. I am always really cautions when I am told that there is a unanimous view of a community on these issues.

CHAIR: In this case, they have not spoken to them so—

Mr Bray : No.

Prof. Katz : I have not spoken to them either.

CHAIR: On this issue of the amount of cash; I am trying to get to the bottom of what the fundamental problem is as you see it. If I look at a couple of different scenarios: someone who is single with two children, living in public housing and on disability support pension, under this I think that they would have access to $291 cash a fortnight and a restricted component of $1,164; someone on Newstart, single, three children, living in their own home with a mortgage, $297 a fortnight; and someone on parenting payment, partnered, three children, in a private rental, $316 a fortnight. It seems a sort of reasonable split, particularly given that the only restriction in terms of the debit card is, as I understand it, on alcohol and gambling. So you can pay for everything else on that and then, in some cases, have $200 or $300 or more a fortnight. That seems reasonable—does it not?

Mr Bray : In that package there, you did not talk about what has happened to those situations where you were renting.

CHAIR: I think that a couple of them were rentals.

Mr Bray : No, that is if you have got a private form of landlord—you are in a group house and you have to throw in your bit of cash—suddenly that scenario of yours breaks down. Where do you get the money to give the other person in the house for the rent that they have paid? That is not there.

Your car? What if you go out and look at your car and, suddenly, discover that you have got bald tyres? It happens. And you know a mate of a mate who happens to have some second-hand tyres and you suddenly need a few hundred dollars in cash to buy those tyres from that person. This is the sort of lifestyle people live in. These are the circumstances where cash is still really important to individual's lives.

CHAIR: We will have to leave it there, we are over time. Thank you to both of you for being here today and to Professor Katz for being with us on the phone.

Pr oceedings suspended from 10:13 to 10:27