Financial penalties applied under the Community Development Program (CDP) have spiked, passing 400,000 in just over two years, ABC News reports.
There are about 33,000 CDP participants, most of whom are Aboriginal and Torres Strait Islander.
Participants work up to three-times longer than city-based jobseekers to receive welfare.
“It is ridiculous, it’s inhumane, it’s discriminatory,” said Lara Watson from the Australian Council of Trade Unions.
“Why are people not being given the money just for the basic essentials: food, a roof over their head, clothing?”
From July to September last year, CDP participants were slapped with 54,758 financial penalties for missing activities.
During the same period, about 50,000 penalties were issued to people involved in Jobactive and other jobseeker programs.
There are hundreds of thousands of Jobactive participants.
“It’s really hard to comprehend that this is happening in today’s society,” Ms Watson said.
“If it was happening in Melbourne or Brisbane, there’d be absolute outrage. So why is it happening in our remote communities?”
Since it began operating in July 2015, about 406,626 financial penalties have been applied under CDP — about 75,000 more than other jobseekers.
For a person on Newstart, most penalties are about $50 per breach, although payments can be frozen for eight weeks for repeated breaches.
The Indigenous Affairs Minister Nigel Scullion was unavailable for interview.
But in a statement a spokesman said: “The purpose of the compliance framework is to encourage attendance at CDP activities.”
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