Australia’s Cashless Welfare Debit Card Trial Extended

Cashless welfare cards by Visa. (Justin Sullivan/Getty Images)

Trials for a cashless welfare purchasing card have been extended for two years across selected Australian regions after the legislation was passed by Parliament on Thursday.

The Morrison government’s legislation hopes to improve the welfare system and the lives of deprived families by ensuring welfare money is spent on essential items such as groceries and bills—despite some Indigenous leaders attribute the social dysfunction in Indigenous communities to the welfare system.

The program will run in regions with Indigenous communities that suffer from entrenched disadvantage, and alcohol and drug issues—which is one of the reasons it has been opposed by Labor and the Greens.

The cashless debit card (CDC) program operates by isolating 80 percent of a person’s welfare money in an account so they can’t spend it on alcohol or withdraw cash. Only people of working age can be put on the program.

The bill was on the verge of being thrown out with deciding voter Senator Rex Patrick signalling he would oppose it. But a last-minute amendment and a move to abstain by Centre Alliance member Stirling Griff helped get the legislation through.

The CDC program was due for renewal by Dec. 31 after being trialled for four years in South Australia’s Ceduna region, in the East Kimberley and the Goldfields in Western Australia (WA), and Bundaberg and Hervey Bay in Queensland.

Senators are seen social distancing in the Senate chamber at Parliament House in Canberra, Australia on March 23, 2020. (Mick Tsikas/Getty Images)

Liberal Senator Matt O'Sullivan’s WA electorate covers communities using the cards. He said that the CDC program had successfully blocked around 40,000 targeted transactions since its inception.

“These communities wanted to have a circuit-breaker to help them deal with the devastating impacts of the harms caused by chronic alcohol and drug use,” O'Sullivan said (pdf) on Dec. 9.

He said the program is slowly having the desired effect. “Kids are now going to school with a belly full of food, which is helping them to get the most out of their education,” he said.

Part of the last-minute changes to the legislation was a motion to make the card voluntary in the Northern Territory (NT) and Cape York where an estimated 20,000 people will transition from another welfare scheme. A variate of financial management systems has existed in the NT for 13 years.

In a submission (pdf), Indigenous leader Noel Pearson’s Cape York Institute (CYI) wrote that Cape York’s Family Responsibility Commission (FRC) was a continuing example of welfare reform designed by local Indigenous communities and families to shift power and responsibility into the hands of respected local elders and leaders to support people to change their behaviour.

“Through a set of ‘family responsibilities’ triggers, it gives local Commissioners, the power to call people in and conference them if they have failed to send their children to school, been the subject of a child safety notice, committed an offence, or failed to pay their rent,” CYI’s submission reads.

While income management is an important tool for the FRC, it is not sufficient to tackle entrenched disadvantage, according to the CYI.

“The FRC through conferencing, income management and case management links clients to extra support services to motivate and build capability for change,” CYI’s submission reads.

Labor and Greens senators opposed the welfare card program claiming that it is punitive and racist because Indigenous communities are predominantly affected. It comes after Social Service Minister Anne Ruston revealed the majority of people on the cards in WA and SA were Indigenous.