Aboriginal people in the Northern Territory will be working for around $5 cash an hour under changes to a remote work-for-the-dole scheme, bringing back memories of the old ‘work for rations’ days.

The Abbott government has announced changes to the Remote Jobs and Community Program (RJCP), which replaced the Aboriginal-controlled Community Development Employment Projects (CDEP) after it was scrapped by the Howard government.

It will put tougher requirements on welfare recipients in remote areas, who are already working for the dole, and where the scrapping of CDEP has had disastrous consequences.

In the Northern Territory, the situation is even more dire because of compulsory income management, one of the most controversial planks of the NT intervention.

CDEP was abolished under the NT intervention in 2007, but the Rudd government brought back a severely watered down version of the scheme, before it was transitioned into the RJCP.

Previously, CDEP employed about 7000 Aboriginal people in the Northern Territory, who were paid real wages for their employment, which was provided through a block grant to community-controlled Aboriginal organisations. It included superannuation and protection under industrial mechanisms like the Fair Work Act and the Occupational Health and Safety Act.

In many communities it was the only source of employment and before 2007 was the largest employer of Aboriginal people in the Territory.

The scrapping of CDEP in the Northern Territory increased unemployment rates “dramatically”, Indigenous policy expert Jon Altman has written.

Under the current RJCP, Aboriginal workers in NT communities were already working 16 hours a week for Newstart wages. The new changes will toughen requirements, forcing welfare recipients in remote areas to work 25 hours, five days a week over 52 weeks in order to receive their welfare payments.

In contrast, recipients in regional areas and cities will only be required to work under these conditions for six months, under wider reforms to welfare across Australia.

It is the first response to mining magnate Andrew Forrest’s Creating Parity report, which called for the end of ‘passive welfare’.

If welfare recipients under the RJCP do not turn up to work, their payments are docked. The Abbott government plans to make job providers “contractually obliged to report non-compliance”.

“The changes proposed will ensure RCJP job seekers do attend their appointment or feel the consequence of their passive welfare behaviour more immediately,” a briefing document obtained by Guardian Australia says.

“Job seekers will learn the behaviours expected of workers, for example by there being immediate consequences for passive welfare behaviour.”

Parliamentary secretary on Indigenous affairs Alan Trudge confirmed this in The Australian today, writing “The new remote work-for-the-dole scheme will have a no-show, no-pay policy. Fail to turn up one day, then the person’s payment for that week will be 20 per cent lower. Strict rules are constantly requested by community leaders. We will deliver”.

But Aboriginal workers under RJCP are already working for rations, many doing council, municipal or aged care work that would be real jobs anywhere else in Australia.

In the Northern Territory, Aboriginal welfare recipients will in turn have half of their welfare payments quarantined under compulsory income management, meaning that single recipients with no dependents will effectively be working for $5 an hour cash, with the other $5 going on their Basics Card.

In the absence of work in these NT remote communities, many of the ‘activities’ involve council and municipal work for the Super Shire councils, which replaced 52 Aboriginal-controlled local government councils in 2008.

The shire councils are largely controlled by non-Indigenous people.

Jumbunna Indigenous House of Learning researcher Paddy Gibson refers to it as “essentially free labour”.

“Most of the work under RJCP is free labour for these big shire councils. I know people grading roads, fencing, people doing all sorts of construction projects, people in child care and aged care.”

He says these changes will just make it harsher and tighten up the requirement to dock pay.

“In theory this is already happening with people having to work 16 hours. The difference between this and CDEP is that CDEP was Aboriginal controlled, and it was an actual job with a wage covered by the industrial system.

“A lot of the time it was supporting black enterprise and you could do more work and get paid for it.

“Under the RJCP there’s no provision for top up pay.”

The government told the ABC it will be looking to employers, such as local councils, aged care facilities and schools to host “work for the dole activities”.

Mr Gibson also says under the current RJCP, the call was also opened up for businesses to take part.

He says RJCP also discourages job seekers because if you are employed in other work, it will mean your Newstart wages will be cut.

“If you do any work that brings in an income, it will actually make the amount of money you are getting on the dole go down. So you could get a 10-hour casual contract at the local store, but why would you when you still have to work 25 hours for RJCP for a reduced dole?”

Labor’s Indigenous affairs spokesman Shayne Newmann has already questioned whether the policy is discriminatory, raising the possibility it could breach Racial Discrimination Act.

Indigenous affairs minister Nigel Scullion says it doesn’t as “there is no distinction between Indigenous and non-Indigenous job seekers”.

Senator Scullion says the government will also support the creation of businesses in remote communities.

But Greens Senator Rachel Siewert has slammed the new requirements, saying they create “false hopes”.

"I don't think that the program that the Government said that they are going to do, which is put some money in to promote small businesses, will be effective," she said.

"You need to be training people on the first instance. There are job-ready skills that need to be provided and the work, at the end of the work-for-the-dole-program, I suspect won't be there."