The Community Development Program (CDP) is remote Australia’s Work for the Dole (WFD) and “job assistance” scheme. In place since 2015, it operates across almost 75 percent of Australia’s area, an area with a population of just 304,000 people. Indigenous people are over 80% of the CDP’s 34,000 participants. In other words, CDP participants are 11 percent of the population in these regions.
This highlights a key point about remote Australia – there just are not jobs to be had. CDP regions have unemployment rates of up to 51%, when averaged across states and can be higher still at a local level. The situation is not helped by low educational attainment and low household incomes. A median family income in the NT’s CDP regions is just $1,137 per week, compared to the Australian average of $1,734.
The CDP has been criticised by civil society groups, Indigenous groups, academics and even police with allegations that it pays below minimum wage and its penalty system is punitive, entrenching poverty, causing housing stress and even hunger. The Arnhem Land Progress Aboriginal Association has reported that fresh food sales at its stores declined by almost 10% per year under the two years of the CDP’s operation.
CDP participants are typically required to work 25 hours a week for $280 a week, or $11.20 per hour. The current minimum wage is $18.29 per hour. That is before any penalties that might be incurred.
In the most recent quarter, CDP participants received 52,813 penalties. A CDP participant is more than 25 times more likely to receive a penalty than a participant in urban Australia’s Jobactive program. They are 55 times more likely to receive a serious penalty.
Indigenous Affairs Minister Nigel Scullion has defended the CDP, saying “the number of payments that have been breached [as a result of penalties] represent less than 1% of the total welfare payments made to people not in work in remote communities”.
This 1% figure is misleading. Firstly, it appears to compare CDP penalties to total welfare payments. Current volumes of penalties suggest they cost $18.4 million per year, or $542 per year per CDP participant (3.7% of their total income support).
However, some CDP participants have stricter Work for the Dole requirements, and these 18,000 people are far more likely to be penalised. The total cost of penalties could represent 7.0% of their income support.
In practice, penalties do not apply equally to participants. For the 1,641 CPD participants last quarter who receive a serious penalty with a part waiver, the loss of an average of $746 represents 20.5% of their income support. For the 441 CDP participants last quarter who receive a serious penalty with no waiver, the loss of $2,314 represents 63.6% of their income support.
The Minister also claims that the CDP has:
- supported job seekers into more than 15,000 jobs.
- achieved more than 5,000 26 week employment outcomes.
- placed more than 85 per cent of eligible job seekers in work-like activities
A different interpretation of CDP’s results is that:
- Each year, less than one in five CDP participants is supported into a job, and less than one in 10 remains in that job for six months.
- On average, a CDP participant would spend 9.5 years in the scheme before achieving a 13-week employment outcome.
- On average, a participant would spend 12.7 years in the scheme before achieving a 26-week employment outcome.
The CDP is also expensive. For every dollar that a CDP recipient receives in income support, approximately 70 cents is spent administering the scheme. It costs five times as much per participant as Jobactive and twice as much as the scheme it replaced.
The achievement of 2,682 part- and full-time 26-week employment outcomes each year must be put in the context of the overall CDP scheme, which costs about $360 million per year to operate. That amount could directly employ 19,700 people for 26 weeks full-time.
The task the CDP is expected to perform is herculean. Remote Australia has few jobs and a disadvantaged workforce. However, the CDP is failing. It pays less than minimum wage and imposes harsh penalties that can cost already low income households dearly. It costs taxpayers far more than similar programs. The government’s claims about the success of the program are based on creative interpretation of statistics, not on outcomes. The CDP needs urgent reform or replacement.
Report commissioned by the Australian Council of Trade Unions.