School attendance and birth weights for children in remote Northern Territory Aboriginal communities dropped significantly after welfare restrictions from the Intervention were introduced, new research shows.
Analysis reveals the federal government's income management scheme launched during the 2007 NT Emergency Response to alleged child abuse made no noticeable improvements to these outcomes in the long run either.
The University of Sydney and Menzies School of Health Research examined daily truancy records of children in the 73 indigenous communities and 10 town camps affected by the policy.
Now known as the Cashless Debit Card, the measure quarantines a large chunk of welfare payments from being spent on booze and gambling.
The study found school attendance dropped by four per cent on average in the first five months, after which rates eventually returned to initial levels.
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As the program was rolled out in stages between September 2007 and October 2008, a comparison found babies weighed on average more than 100 grams lighter than infants born in communities not yet affected by the policy.
The study also found those newborns who were in utero when income management was implemented in their community were at slightly higher risk of low birth weight.
But the rates of drinking and smoking in pregnant mothers remained the same.
Sydney University Associate Professor Stefanie Schurer says her team was surprised by the findings.
"We expected to find a positive impact or, at worst, no impact at all," she said.
Menzies' Professor Sven Silburn said further investigation is needed to determine whether the negative effects were caused by the policy itself, administrative challenges or negative sentiment surrounding its compulsory introduction.
Professor Schurer said changes to the way household resources were allocated sparked a rise in mothers being "humbugged", or receiving excessive demands for money.
Resultant changes to family decision-making dynamics also led to more reports of parent arguments, and the researchers warned against welfare restrictions causing additional domestic stress and conflict.
"We are concerned that the federal government's intended extension of income management, even in an amended form, may have similar unintended consequences," Professor Silburn said.
The cashless welfare cards have been in operation in Ceduna in South Australia and Western Australia's East Kimberley since April 2016. The government was to introduce them to the two extra sites early next year, however Labor plans to vote against the move.
