First of all I am going to apologize in advance for my lengthy response.
I don't think there is a solution that anyone can come up with that will work 100%. There has been a lot of money and resources spent on how to effectively deal with the Aboriginal Communities. To date, IMO none have worked. I believe that a lot of the Aboriginal people feel so out of place. The ones that are living in the major cities are losing their cultural identity and language skills, a lot of them end up relying on government benefits and have way too much time on their hands and nothing to do. Alcohol abuse is pretty rampant throughout many Aboriginal communities, and if they can't buy booze, they sniff glue.
In WA, Aboriginals account for approx 10% of the population, yet 75% of the children in care at DCP are Aboriginal. Social workers at DCP are stretched to the max with their caseloads. Each DCP office has an APL (Aboriginal Practice Leader), along with Youth Workers who work with at risk youth (Aboriginal), yet they can't make much headway.
Who knows if compulsory income management will work, what looks good on paper may not work in real life. As I have stated before, working as a welfare officer for DCP, I don't think it is a bad idea, especially the compulsory credit counselling. When I used to give out vouchers for food at DCP, I always had to put down no cigarettes, to ensure that the money was used for food and only food.
Just as an aside note, we have a Indian reserve about an hour away from where I live, the natives live, work, go to school and self govern themselves on the reserve. They do a very lucrative business selling cigarettes and running other business's, now I am not saying that we don't have any problems with our natives, but I don't see a lot of the social issues that I saw in Australia.
So after all that rambling, my opinion is that let them try income management, I don't think it can do more harm than what is already going on in a lot of communities and in the cities.
Cheers
Kare