“Even under the new card, a committed drinker living on a standard welfare payment, the Newstart allowance for a single adult, $489 a fortnight, would have access to $96 in cash, enough to buy 194 standard drinks a fortnight if the alcohol consumed were in the form of cask wine that provides a standard drink for 50c.

Those who built the basics card had two distinct goals in mind: to compel families under income management to spend their welfare on food and household goods, and to provide an incentive to seek proper employment, with a salary free from the card regime.”

From next month, in two carefully selected locations at opposite ends of remote Australia, the most exhaustively planned and keenly promoted social experiment seen in a decade in Aboriginal affairs will be launched into action.

Nicolas Rothwell The Australian

The cashless welfare card trial being run by commonwealth Department of Social Services officials at Ceduna in South Australia’s far west and in the tropical East Kimberley townships of Wyndham and Kununurra marks the initial and partial fulfilment of a dream that has long mesmerised architects of indigenous policy.

The new card is a simple debit instrument, designed to restrict the purchases that recipients of welfare payments can make: indeed, it is not different in principle from the “basics card” that has been used in the Northern Territory for the past seven years to quarantine half the income paid to the welfare-dependent. But the debit card will impose sharper limits: 80 per cent of the transfer payment will be tied to the card, with only the small remainder available as cash.

It is an instrument for strong income management, and its first, small-scale rollout embodies the hope that direct control over spending patterns can change the behaviour and the attitudes of families and entire communities: that the mind can be modified by a rein on the purse.

The most persistent and prominent advocate of this approach in recent years has been mining magnate Andrew Forrest, who was invited to prepare a report on indigenous training schemes for the Abbott government, and produced in response a comprehensive plan recommending the introduction of cashless welfare payments delivered through a hi-tech card.

Forrest’s report envisaged a “healthy welfare card” that would serve as an entry ticket to a transformed remote Aboriginal Australia and a re-engineered welfare economy. The card system could “deliver superior results at reasonable cost within a short time­frame”.

The report, written with the help of indigenous academic Marcia Langton, repeated the recipe for social change promoted in remote north Queensland by Langton’s old associate Noel Pearson, whose welfare reform project also has been running for seven years in four Cape York communities.

The card, then, is a component of a wider program, meant to stabilise communities ravaged by the unconstrained use of welfare cash to buy grog and to nudge dependent men and women of working age off the welfare rolls and into the freer and more rewarding world of work. Assessments of the impact of income-management regimes in remote indigenous Australia have been undertaken nearly constantly during the past half-decade: the commonwealth’s lengthy review of the Cape York scheme rather hedged its bets on the grounds the numbers of people involved were too small to make definitive judgments.

The most detailed investigation into the Northern Territory Emergency Response and its downstream programs, as modified through the years by the Rudd and Gillard Labor governments, was devastating in its conclusions when it was released in late 2014: no improvement in community wellbeing, no track to greater financial autonomy for individuals, an increased sense of dependence on welfare, a general failure to meet the policy’s stated goals: “The tools envisaged as providing welfare recipients with the skills to manage have rather become instruments which relieve them of the burden of management.”

Those who know the social landscapes of the Northern Territory’s remote communities and the Cape York test sites see a similar pattern. More than $120 million has been spent on the Cape’s programs, more than $2 billion in the Territory: if there has been a degree of stabilisation, there has been nothing remotely resembling revolutionary change.

Hence the decision to persist with income management and new versions of the welfare card reflects a strong conviction that the policy setting is a long-term measure and will come good in the end. It reflects, also, the survival of an established approach despite Malcolm Turnbull’s enthusiasm for innovation and the bleak scorecard of the latest Closing the Gap report.

The new “cashless debit card”, strangely, will be less restrictive than the basics card launched eight years ago. It can be used to buy tobacco products, the chief cause of chronic disease and debility in the remote Aboriginal world. It also can be used to buy pornographic materials, even though the Northern Territory Emergency Response of 2007 was triggered by a moral panic over child abuse, and restrictions on access to sexual materials were at the heart of the initial legislation brought in by Mal Brough, then indigenous affairs minister.

The complex politics of the conservative administration and the long-term assessments that dominate the higher reaches of the bureaucracy are critical here. When Tony Abbott won power in September 2013 he famously proclaimed himself prime minister for indigenous affairs but appointed Territory senator Nigel Scullion as his cabinet minister.

Abbott’s magic bullet for the Aboriginal bush was enforced school attendance. He and Scullion set up a lavishly funded remote schools program that limps on to this day. Responsibility for indigenous affairs was moved — the sixth change in 15 years — to the Department of Prime Minister and Cabinet, and a complete reorganisation of program funding arrangements was carried out: the system is still in recovery.

Scullion pays lip service to the Forrest review’s critique of welfare dependency, but the true acolyte of income management as a weapon to reforge hearts and minds is Alan Tudge, the former assistant minister for social services, a former management consultant and associate of Pearson, and a man strongly invested in the currency of ideas.

Tudge, the newly minted Minister for Human Services, has driven the hunt for test sites for the cashless card, and for the remediation schemes devised to smooth its introduction. It has been a challenging task, given the government’s determination to secure at least a semblance of local community support for the trials.

A bid to win the consent of Moree in NSW, which has a substantial indigenous population, was unsuccessful. The shire of Halls Creek in the central Kimberley, which long has been an exceptionally well-run local government jurisdiction, consulted its indigenous advisory group and turned down Tudge.

He was left with the two announced test sites: Ceduna, where local officials see the card as a “street sweeper” to limit drinking in fringe camps, and the East Kimberley towns. In both of these regions the claim of Aboriginal community backing for the trials so proudly trumpeted by Tudge in his public presentations and his carefully mounted media tours is dubious. The main Ceduna community organisation quietly opposes the plan.

In Kununurra the chief backer of the card is the publicly funded Wunan Foundation and its well-connected executive director, Ian Trust, a veteran Aboriginal affairs bureaucrat. In fact Kununurra’s Aboriginal community is deeply fractured and, like the whole East Kimberley, already under state-imposed alcohol controls. It also has been the subject of a previous income management trial, in 2008, that capped cash payments at 30 per cent. That scheme was voluntary: it had cost more than $19m and attracted a total of 18 clients when it petered out.

Tudge has been keen to secure a third trial site to meet the provisions of the federal legislation, mandating the initial year-long test of the debit card. His eye has fallen most recently on the West Australian goldfields townships of Leonora and Laverton, where he held a closed-door session in January. The principal indigenous voice in favour of the card belonged to Bruce Smith, a keen backer of the Forrest report and chief source of the claim that injectable drugs are being abused in the Ngaanyatjarra communities of the western desert.

Just last week the indigenous reference group for Laverton met and decided to oppose any trial of the card in their area, so killing off any prospect that Tudge would secure a third test site with any ease or dispatch.

In truth, these potential target regions differ greatly, in climate, economic opportunities, state-provided services, language and culture, social profile, demographics. Ceduna, like Adelaide, is a magnet for transient indigenous people from the southern Pitjantjatjara lands who have decamped from their communities and seek access to alcohol. Kununurra is a prosperous western town, with suburban Aboriginal enclaves and surrounding outstations. Tourism is its dry season drawcard, while the Ord scheme generates its wealth. It is not a place characterised by good race relations and it has, on recent count, five functioning sly grog outlets.

Wyndham, by contrast, is a well-integrated place. There are strong ties between the mainstream and Aboriginal worlds, there is a sense of everyone being on the same level, and it stands as one of the rare models of comparative racial harmony in the remote northwest.

Of course, all these places would benefit from a reduction in alcohol availability and consumption, the chief aim of the debit card’s promoters. But under present arrangements alcohol is cheap and widely available in the bush, even though most indigenous communities are dry. It would remain freely available under the new debit card regime as well.

The economics of the alcohol industry are straightforward. The most effective way to regulate drinking is by calibrating its price through a volumetric tax that links excise to alcohol content, but a special wine equalisation tax measure (acronym — WET) exempts wine from this system, applying instead a wholesale sales tax that does not reflect alcohol content. As a result of this, wine is by far the most popular drink in remote and regional indigenous societies.

Even under the new card, a committed drinker living on a standard welfare payment, the Newstart allowance for a single adult, $489 a fortnight, would have access to $96 in cash, enough to buy 194 standard drinks a fortnight if the alcohol consumed were in the form of cask wine that provides a standard drink for 50c.

And intense competitive discounting by retailers in Alice Springs, one of the great centres where desert drinkers converge, means the cheapest wine available over the counter there costs a mere 41c a standard drink.

At least alcohol bought over the counter can be detected and, indeed, intercepted by profiling tactics such as the Northern Territory police force’s patrols outside bottle shops, and by various regulations preventing drinkers from consuming alcohol in public places; but there is no easy way to limit grog-running, a vast and largely unknown black market trade that cards and identity controls at retail points do not affect.

The card-based income management systems tried to date also can be circumvented by creative drinkers and by profiteering merchants. The tricks employed testify to a wondrous energy — tampering with magnetic strips, buying alcohol online from innocuous sources such as Christmas hamper providers — the list of new contrivances is unending, and the drinkers are always one step ahead of the authorities.

More significantly, alcohol is very much yesterday’s drug in the bush, and definitely in Kununurra and the Kimberley. Marijuana use is widespread and dominates the social life of the younger generations, and is procured freely through sophisticated distribution networks. Cash restrictions to control this undercover economy would have to be far more draconian than those envisaged by the debit card’s promoters, and would have to be extended universally to prevent relatives from being forced to surrender their money to the youthful armies of drug-using shakedown operators who maraud through communities and town camps.

This snapshot of the landscape of intoxication may sound overwrought: law enforcement officials know the world they seek to police has just these contours. To be completely effective in this environment, where all funds are in potential danger of being directed away from approved household needs, a regime of cashless welfare would have to mean a completely cashless society, without any of the many channels of financial supplement present today being allowed to persist.

No big-name indigenous artist could be paid in standard fashion, none of the salaried local staff could be left free of restrictions on their earned income, none of the vast royalty payments that form so large a part of remote area wealth could be exempt from controls.

Leakage threatens a constraint-based social control regime that relies on financial instruments; this has always been the achilles heel of income management, and it helps explain the relative ineffectiveness of the measures deployed during the past decade. When income management was first introduced in the Northern Territory in 2007, it was seen by the Howard government as a stopgap measure, a “short, sharp shock”, a way-stage en route to further economic reform rather than the long-term destination it has become.

The Cape York trials never envisaged blanket income management but adopted a flexible system, imposed by a local expert panel and tied to the circumstances of individual welfare recipients. The drift towards universal cashless welfare in a target area thus represents a hardening of policy. But it fails to take into account another reason for the distinctly limited impact of the basics card during the past decade.

Those who built the basics card had two distinct goals in mind: to compel families under income management to spend their welfare on food and household goods, and to provide an incentive to seek proper employment, with a salary free from the card regime.

The architects of the basics card policy were not able to anticipate the reception of the system in Aboriginal societies. It was absorbed, understood, even accepted, but seen simply as another imposed regulation, an inconvenience in the economic landscape, something to be endured and navigated round and outlasted.

Its local and Aboriginal proponents were quickly seen as agents of the government; the expectation that there would be local ownership of the scheme remains, despite repeated questionnaires and carefully framed opinion surveys, a fantasy.

Indeed the dislike expressed behind closed doors for the “stronger futures” (Labor’s indigenous blueprint) bureaucrats and the welfare reform program managers, years into the era of income management, is startlingly fierce.

What, then, explains the prolongation and entrenchment of welfare income control in the indigenous regions and communities — a high-cost policy that promised much and has yielded, across two governmental cycles, only modest results: a policy meant to improve lives that merely has increased the central role and overarching powers of the provider state?

In November last year, the month that he resigned his post as head of the Department of the Prime Minister and Cabinet, Michael Thawley caught the point with laser words: the effect of the Aboriginal reforms of recent years “has probably been to increase the sense of dependence in the indigenous community whereas we actually have wanted to try to build their capacity to manage themselves.”

It is the dilemma that shapes the modern frontier.

The vista today is familiar enough: a card, a plan, a panacea, a single, simple, all-purpose solution. For all the rhetoric surrounding the new trials, income management and the cashless debit card are best seen as legacy initiatives, residue policies, the result of ideas that first became predominant a decade ago and have yet to be revised in the light of experience. One can compare the present architecture of constraint and control to an almost stationary storm-front, held in place by three separate pressure systems.

The first of these is the political echelon, with its enduring enthusiasm for an action plan to kill off passive welfare. This enthusiasm, shared by the Coalition under Brough and now Tudge and by Labor’s Jenny Macklin, derived from Pearson’s diagnosis of the chief malaise afflicting the indigenous bush.

The second force promoting grand, clear-cut, headline social reform engagements is the network of high-profile corporate and philanthropic leaders and business-backed pressure groups committed to the Aboriginal cause and their part in its advancement: men and women much like Forrest, who have a fondness for diagram-rich blueprints, clearly defined outcomes and rational, market-based human engineering.

And the last and most potent piece in the policy jigsaw is the all-powerful social services bureaucracy in Canberra, with its very different perspective on the Aboriginal domain. The captains of the departments in charge of the indigenous bush these days are not the idealists of the 1960s generation, not figures such as Neil Westbury and Michael Dillon, progressive intellectuals who cut their teeth in the Aboriginal and Torres Strait Islander Commission and see the sweep of history.

The prevailing analysis today in the public service is quite different: the chief goal is the management of dysfunction and decline. Few senior bureaucrats, faced with the dispiriting statistics they receive from the indigenous communities of the centre and the north, believe that remote Aboriginal Australia has much of a future. They anticipate a slow process of assimilation and a drift of the younger bush generations into regional towns, and a consequent diminution of traditional lifeways and culture.

Despite their lip-service to the ideals of sustainable development, they have little hope that sustainable economies can be created in the deep bush. Their true task is to maintain a tight grip on the Aboriginal realm through controls such as income management, and to act as bystanders, witnesses to a gradually unfolding tragedy they have been unable to prevent.

A cashless debit card trial; a trial, too, of the recent flood-tide of indigenous policy renovation and welfare redesign.

Since the end of the self-determination era and the unravelling of ATSIC and its regional administrative panels, the centralisation of indigenous welfare programs, overseen by successive ministers and department secretaries, has proceeded apace. Several complex nationwide reforms have been announced and implemented, only to be remodelled or replaced, leaving a complex set of overlapping programs in effect, and wrecking the fragile finances of many remote and regional communities in the process.

It is to the crisis in the broader indigenous welfare policy landscape, its causes and its unfolding resolution, that the next article in this Inquirer series will turn.