Andrew Forrest's Indigenous job plans are a 'massive social experiment'

Andrew Forrest’s report on Indigenous employment and welfare makes incorrect assertions, is unbalanced and would be conducting a “massive social experiment” on vulnerable people if the recommendations were taken up, the National Welfare Rights Network (NWRN) has warned.

The miner’s proposal to create a cashless welfare card with restrictions on its use has the potential to cause significant damage, according to NWRN, which also criticised the proposal to have principals decide whether students should have access to Youth Allowance.

NWRN said it was a “real concern” the report had moved away from the terms of reference and offered broad comments on matters outside the scope of Forrest’s review.

“This has resulted in a report that tends to simplify some issues, perhaps trivialise others, and appears polemical and aggressive towards those with alternative views,” it said in a submission to the review seen by Guardian Australia.

Forrest released the report, titled Creating Parity in August, after being asked by the prime minister to review how to improve Indigenous employment outcomes. It is currently in the consultation stage before the government decides which recommendations to take up.

Forrest has warned the government against a piecemeal approach saying for the overhaul of the employment and welfare system to be effective every recommendation must be upheld, a claim NWRN rejected.

Forrest’s recommendation to give school principals the power to veto claims for Youth Allowance would harm “community, family and school inter-relationships”, the submission said.

“It will also mean that social security decision-making will be applied inconsistently to different citizens depending on the school they happen to attend. Income support claims and payment should be based on legislative criteria, and based on an objective assessment of need,” the submission said.

“This proposal also places an additional burden on school principals who already have huge responsibilities.”

NWRN said the healthy welfare card, which would be compulsory for people on income support and would not be able to be used for alcohol or gambling, appears to have been “driven by good intention” but the proposal was “unacceptable in its current form”.

“People living on the lowest incomes in Australia would be subjected to a massive social experiment, the likes of which we have not seen before. A denial of access to 100% of a person’s social security entitlements in cash is unprecedented, and, arguably, a serious breach of human rights,” it said.

The submission said not allowing people claiming income support to have cash would make them subject to the $10 minimum spends many shops impose on eftpos cards and would even make it difficult for children to attend events with a “gold coin” donation at schools.

Forrest has defended the card, arguing it allows people to budget and avoid gambling, illegal drugs or alcohol.

“Humbug [begging for money in Indigenous communities that can involve violence] ravages vulnerable communities and hence, vulnerable people. This is directly what we heard in our submissions, and it is how we came upon a solution for the option of cashless welfare payments,” Forrest wrote soon after the review was released.

“Alcohol, gambling and illegal drugs are destroying vulnerable Indigenous and other families and communities across Australia. The other 26 recommendations of the Forrest review are empowered by the card and together will end disparity while promoting considerable economic activity.”

NWRN called the focus on early childhood in the review “positive” and welcomed the intentions to target support and integrate education services. However, it warned cutting Family Tax Benefits payments if children did not meet school attendance targets would harms both parents and children.

“This approach does not address the real reasons why young people fail to regularly attend school,” it said.

NWRN said it was ironic the only mention of disability in the report was about stopping people eligible for Newstart and Youth Allowance testing their eligibility for Disability Support Pension (DSP)

“It is difficult to respond to this recommendation as it seems to be based on a fundamental misunderstanding of the current system,” the submission said.

“There is no current ability or discretion to transfer somebody from an activity-tested payment to the Disability Support Pension (DSP). A person may only be granted the Disability Support Pension if a claim is made and they meet all relevant medical and residential qualifications. The bar is a high one. Only 42% of claims for DSP are successful.”

The NWRN submission said the report called for the removal of all discretion for granting exemptions from activity testing but failed to recognise the strict guidelines already in place.

“Any tightening of the existing strict rules would cause great hardship for people facing issues such as pregnancy, homelessness, serious mental illness, or domestic violence,” the submission said.

The submission lauded Forrest’s recommendation for the top 200 companies to increase Indigenous employment to 4% but said a similar target should also apply to Indigenous people with a disability.

NWRN does not support the creation of tax-free status for Indigenous businesses and social enterprises and said the review could have focused more on structural issues and barriers to regional development.

“We have concluded that the proposals in the report are unbalanced in that they are largely dismissive of training activities,” the submission said.

Parliamentary secretary for the prime minister, Alan Tudge, says there is broad support in the community for the report’s recommendations.

“They know that change has to be made. They like that Andrew Forrest’s report is so comprehensive, going from early childhood all the way through to training and employment,” he told ABC Perth on Tuesday.

“Of course there are some disagreements over the tough love measures, particularly for example linking welfare to school attendance. Some people like that, others don’t. But overall, we’ve had a pretty good response.”

Tudge said some Aboriginal leaders had suggested the Healthy Welfare Card be on an opt-in basis rather than compulsory, with 50 to 80% of a person’s welfare available on it and the rest available in cash.

He said the Cabinet was taking the recommendations “very, very seriously”.

“We know that grog is destroying many of these communities. We know that school attendance sits at about 60% in many of the remote places which means that kids are effectively not learning and will end up on the welfare queue. We know there are an insufficient number of people in work,” Tudge said.

“So we’ve got to do things differently. Forrest has presented us with an ambitious report. It’s a wide ranging report. We are carefully considering every single one of those recommendations.”