It is commonly asserted that Indigenous dependence on welfare is increasing; that it is a passive and debilitating experience rather than a valued citizenship entitlement. But to what extent is this actually the case? And if it is true, what policy tools and service delivery models might assist in addressing the situation?

The Federal government’s current welfare reform agenda suggests the problem of welfare dependency can be met by moving ‘beyond reliance on income support to self-sufficiency’. The concept of mutual obligation is proposed as a ‘new participation framework’ for facilitating this objective (Commonwealth of Australia 2001: 8; Newman 1999: 6–7). Mutual obligation is characterised by government as being ‘both a right and the obligation to share in the benefits of economic and employment growth’ (Newman 1999: 6). It will require unemployed people, and possibly persons in receipt of other types of welfare payments, to ‘strive to improve their chances of getting jobs and actively look for work and give something back to the community that supports them’ (Newman 1999: 4; see also Commonwealth of Australia 2001). It is not yet clear how the new social security reforms, and especially mutual obligation, will be applied to Indigenous people dependent upon welfare transfers.

This issue is especially pertinent because, since 1977, Indigenous communities have been able to participate voluntarily in the CDEP scheme. Individuals in the scheme transfer from the direct receipt of social security income to the receipt of equivalent levels of income for undertaking work coordinated by local CDEP organisations. In June 2000, some 30 600 people across 262 communities were participating in the CDEP scheme, and over half of these resided in remote locations (ATSIC 2000: 48). Thus participants in CDEP schemes are, in effect, already fulfilling mutual obligation by ‘working for the dole’. It might also be possible for CDEP organisations to play a wider role at the community level, in translating proposed social security policies into practical and feasible options. But the prospect of such an enhanced role raises other questions concerning the effectiveness and funding of CDEP organisations, and the availability of community-based training and employment opportunities for Indigenous Australians. These policy threads—on welfare dependence, mutual obligation and possible future roles for the CDEP scheme—will be woven together here, so as to address the broader issue which links them all; namely, how social security income and services might be more effectively and appropriately delivered to Indigenous Australians in order to alleviate high levels of welfare dependence.

The historical transition of Indigenous Australians to welfare dependence is first described. There then follows a presentation of the detailed results of survey research on the current nature of welfare dependence being experienced by Indigenous families in two communities—Kuranda and Yuendumu.^[3] In both communities, the CDEP scheme is a major component of the labour market. The important contribution of CDEP incomes to the welfare economies of households is highlighted. Recommendations for fine-tuning social security policy and service delivery are then outlined, with a focus on the potential capacity of CDEP organisations to provide assistance to a wider range of social security recipients. The type of policy framework best suited to implementing mutual obligation in Indigenous communities is explored.

The paper concludes with a review of a major initiative in the delivery of social security income and services to American Indian people, known as the Temporary Assistance to Needy Families (TANF). The US Federal government’s Tribal TANF program has some similarities to the CDEP scheme, but it also shows some important differences in its policy and service delivery. While still in its early days of implementation, TANF has potential relevance for Indigenous welfare reform in Australia (see also Saunders, Ch. 3 and Westbury, Ch. 10, this volume).