Budget 2018: Changes to the Community Development Program

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The Community Development Programme (CPD) is the Australian government’s remote employment and  community development service for unemployed jobseekers who must engage in job activity requirements  to receive their unemployment payments (PM&C, 2018). Introduced in July 2015, the CDP has been subject to widespread criticism for its onerous requirements. The CDP requires participants to undertake more job activity hours than those required by jobseekers living in non-remote areas who participate in the jobactive employment services programme. There are harsh non-compliance measures in the CDP which have many vulnerable people with no income support. Since its introduction, the CDP program has seen a 740% increase in financial penalties compared with the preceding scheme, the Remote Jobs and Communities Programme (RJCP) which had less onerous obligations and greater flexibility over choice of activity (Fowkes, 2017). The scheme disproportionately impacts on Indigenous people – approximately 83% of the 35,000 CDP participants are Indigenous.

The new budget measure
In the 2018 Budget, the Government has announced that it will spend $1.1 billion on a reformed CDP. This money will flow from Department of Prime Minister & Cabinet, Department of Social Services and Department of Human Services. The key changes, to be introduced from 1 February 2019, include:

  • Reduction in the required work hours from up to 25 hours per week to up to 20 hours per week;
  • Subjecting CDP participants to the same compliance system as other job seekers living in non-remote areas;
  • 6,000 wage subsidy positions available to eligible employers of CDP participants, for up to $21,034 over two years.

Analysis
Reform of the Community Development Programme is much needed. However the changes proposed in the Budget do not address the most concerning problems with it: the inflexible nature of the programme, the structural barriers to employment in remote communities, or the impact caused by penalties arising from the programme. There has also been no indication that the Government is pursuing genuine engagement and partnership with remote Indigenous communities to deliver this programme.

Although there has been a reduction in required weekly work hours, CDP participants will still be required to undertake more work hours than those on the jobactive programme. For CDP participants, these work hours are required every week, however jobactive participants are only required to undertake job activity hours over a 6 month period.

It is likely that the staggering number of financial penalties imposed since the commencement of the CDP will continue despite the decision to change the applicable compliance system. Under this measure, from 1 February 2019, the Targeted Compliance Framework, introduced by the Social Services Legislation Amendment (Welfare Reform) Act 2018, will apply to CDP participants. This compliance system includes payment suspensions for single activity failures, and harsh penalties for persistent non-compliance. Participants who fail to meet the activity requirements on their jobseeker plan will be subject to demerit points. These result in a suspension of payment until the person completes the activity. Participants who accrue more than 5 demerit points in a 6 month period will be subject to reductions in their fortnightly income support payments (first 50%, and then 100%). On their 8th and any subsequent demerit point accrual, they will not receive any income support payment for 4 weeks. There is no option to seek a waiver of this penalty. The 4 week payment cancellation will also be applied to people who refuse to accept work, voluntarily leave a job, or are dismissed from work due to misconduct (with some  limited exceptions). We are concerned that people experiencing crises, such as the onset of psychiatric mental illness or exposure to family violence, may struggle to remain engaged with their required job activities and lose access to income despite their vulnerabilities.

NSSRN supports the investment in 6000 new wage subsidy positions. The Government has stated that these will provide real wages (minimum wage or above), as well as superannuation and other entitlements (PM&C, 2018). However, as there are few positions, most people will not benefit from this investment due to the limited job opportunities in remote communities and be forced to remain in the CDP.

The NSSRN has long supported the work of Aboriginal Peak Organisations NT (APONT) that has developed a community driven alternative to the CDP (APONT, Report 2017). Their proposal, the Remote Development and Employment Scheme (RDES), aims to achieve sustainable change in remote communities by ensuring that Indigenous people have more meaningful control over their lives. The RDES is “place based, community driven, and establishes a framework for long term collaborative effort across governments, employers and Indigenous organisations to increase economic opportunities in remote communities” (APONT, 2017) The proposal emphasises job creation, incentives to participate (rather than penalties) and recognising cultural priorities. It would be managed by an independent Indigenous led board with local governance bodies.

The NSSRN again urges the Government to engage with APONT to implement their alternative programme for remote Australia. We urge the Government to overhaul the CDP to deliver a remote employment programme that:

  • is incentive-based, rather than punitive,
  • promotes participation in meaningful, sustainable work which benefits the local community,
  • ensures safe working environments for participants,
  • provides for greater flexibility to take into account personal circumstances, such as family violence,
  • encourages participation in important social and cultural activities, and
  • recognises and aims to alleviate the various structural barriers to social and economic participation faced by remote communities, including high rates of illness and disability, lack of basic infrastructure, inadequate housing, limited access to technology, low rates of literacy and numeracy, and limited job opportunities.

References

Aboriginal Peak Organisations Northern Territory (2017, May), ‘Fair Work and Strong Communities: Proposal for a Remote Development and Employment Scheme’ (Report). Retrieved from <http://www.amsant.org.au/apont/wp-content/uploads/2017/07/RDES-Report_Online.pdf>.

Aboriginal Peak Organisations Northern Territory (2017, May) ‘Proposed Remote Development and Employment Scheme’ (Infographics). Retrieved from <http://www.amsant.org.au/apont/wp-content/uploads/2017/07/RDES-Report_Online.pdf>.

Department of the Prime Minister and Cabinet (2018), 2018-19 Budget: Community Development Programme reforms, Retrieved from https://www.pmc.gov.au/sites/default/files/publications/budget-fact-sheet-cdp-reform.pdf

Department of the Prime Minister and Cabinet (2018), The Community Development Programme (CDP), Retrieved from <https://www.pmc.gov.au/indigenous-affairs/employment/community-development-programme-cdp>

Fowkes, L (2017, December) Social security penalties applied to participants in the Community Development Programme Overview of first 2 years (1 July 2015-30 June 2017), (Report, Centre for Aboriginal Economic Policy Research, ANU).