The federal government's decision to extended a scheme which sees part of the Centrelink payments of 30,000 Territorians compulsorily quarantined for essential items has been criticised by many experts as discriminatory.

Aboriginal organisations, social services and human rights groups also noted the extension of compulsory income management via the BasicsCard breaks Labor's a 2022 election promise to abolish the system.

Federal Labor, while in Opposition, said they would "scrap the discriminatory Cashless Debit Card and make the BasicsCard voluntary for those individuals or communities who wish to keep a form of income management".

However, in June the government extended income management legislation until 2033 by repealing a clause that would have ended it in July this year. A Greens motion to reverse the repeal was voted down by Labor and the Coalition.

'Lack of evidence supporting its effectiveness as a social benefit'

Several organisations made submissions against the extension, including the Central Land Council.

CLC general manager Josie Douglas said the organisation had been "long opposed" to compulsory income management, the ABC reports.

In their submission the Land Council said their position is "based on lived experience and awareness of the lack of evidence supporting its effectiveness as a social benefit instrument".

Dr Douglas said the recent decision to remove the self-repeal dates from the legislation means "residents in the Northern Territory will remain under income management for the next 10 years".

Compulsory income management was introduced as part of the Howard government's NT Emergency Response in 2007, also known as the Intervention, and disproportionately affects Indigenous people.

The system quarantines a portion of a person's Centrelink payments for essential items and blocks the purchase of items like tobacco and alcohol. A BasicsCard is a restricted debit card holding a portion of a person's welfare that is issued by the Australian government through Services Australia.

People are placed on the scheme by default if they live in a declared area and receive particular kinds of welfare payments, or if they are flagged by social services. The Cashless Debit Card (CDC), also known as the Indue card, introduced nine years after the BasicsCard applied to a broader, more diverse group of jobseekers. The CDC became optional in 2022 before being abolished in 2023.

Central Land Council backs move to a voluntary system

Dr Douglas called for a "well-managed transition plan away from compulsory income management to a voluntary system".

"The transition plan must involve Aboriginal leadership and financial capability experts working in with the Commonwealth government to ensure that the right protections are in place for a voluntary system that will work," she told the ABC.

A spokesperson for federal Minister for Social Services, Tanya Plibersek, told National Indigenous Times government "promised to abolish the Cashless Debit Card and allow individuals and communities to choose whether to continue using income management".

"The Government has already abolished the Cashless Debit Card. In the communities where it has been abolished, the Government is investing in real solutions to tackle entrenched disadvantage and create new economic opportunities for regional and remote communities. For example, in Yirrkala we've invested $1.2 million to deliver the Yirrkala Farm Project to create jobs in sustainable, Indigenous-owned agribusiness and $1 million to expand the gallery of the Buku-Larnggay Mulka Art Centre," they said.

"Over the past few years, the Government has consulted with 81 communities and thousands of people on income management. These discussions told us that people want the Government to work with them to create solutions, rather than make decisions for them.

"We will take the time to get any future changes right, and ensure any reforms continue to support and empower communities rather than harm them."

Federal government says it is committed to 'providing real jobs'

The minister's spokesperson said the government is "also committed to building economic opportunity for remote communities by providing real jobs", noting "3,000 new jobs through the Remote Jobs and Economic Development Program" and plans to double the number of Indigenous Rangers and invest $1.9 billion in the new Remote Australia Employment Service.

The Government has also doubled funding for Mob Strong Debt Help and extended the successful Hoops for Wealth program to support people experiencing financial distress in the Northern Territory.

Compulsory income management 'causes so much harm' - expert

Australian National University social policy researcher Elise Klein, who has been researching compulsory income management for a decade, told the ABC governments had not been able to provide evidence that the scheme helped meet social policy goals.

"There is really strong peer-reviewed research that shows that [compulsory income management] causes so much harm," she said.

"Researchers have shown a link between the BasicsCard and the reduced rate of weight of babies and school attendance, that research has been out for years now."

Dr Klein also said it raised human rights concerns, noting at least 82 per cent of people on compulsory income management were Indigenous.

"You see that disproportionate impact, this racialised impact, still being lived today by people," Dr Klein said.