News

The Federal government appears likely to extend an income support model known as the Cashless Debit Card to new areas and new recipients despite very high administrative costs, and little valid evidence that it works. Despite a negative thorough evaluation of the 10 years of trialling Income Management in the NT and elsewhere, and initial questionable trials of the Cashless Debit Card, the Social Security Minister continues to signal his intentions to expand the program. Expenditure of $18.9M for this trial of 1850 recipients in SA and WA indicate the costs are high for questionable outcomes.

A network of community organisations, activists and academics is warning of a seismic change in the way income support payments may be administered following the 2017 Federal Budget and ask why, in a time when cuts are imposed to save money, this type of costly change is being promoted.

After trialling the cashless debit card in Ceduna and the East Kimberley over the past 12 months there are signs that Commonwealth Government is considering extending this social experiment across other communities, perhaps implementing it as a nationwide program. The cashless debit card forces those receiving income support payments to have 80% of their payments quarantined to a card that cannot be used to purchase alcohol or gambling or to withdraw cash.

The Accountable Income Management Network (AIMN) has been monitoring the implementation of various compulsory income management measures across Australia over the past 3 years. Network spokesperson (Mr Simon Schrapel) said “Evidence gathered through the government’s own research shows that over half of the cashless debit card trial participants said it had made their lives worse. The government seems to be ignoring this alarming feedback, and is intent on extending the card’s application”.

The Network has been examining the impacts of the card on those in the trial sites together with the research reports commissioned by the government. Mr Schrapel said “despite significant government promotion and investment, this social experiment suffers from a number of significant flaws including:

• Removal or reduction of basic legal and consumer rights of participants.
• Throwing into disarray existing financial services arrangements, for example loan repayments.
• Polarisation of community views, with participants subject to criticism and in some cases personal ridicule for expressing their views and experiences.
• At a cost of $10,000 to administer per participant the cashless debit card has proven to be one of the most expensive and inefficient experiments at a time the government is calling on greater financial restraint.
• Most damning of all, four of every five participants report none of the positive changes the cashless card is meant to encourage.

“It defies logic that government is now considering imposing this compulsory financial management system on more Australians.”

The Network warns that all Australians should be deeply concerned by this development. Up to 2.3 million people are at risk of losing the right to spend their income in the way that they choose – a basic human right we have traditionally taken for granted in our nation.

The government must come clean with its intentions and justify why it would consider the further roll out of a system to control peoples’ use and management of their own money. The system has proven to be deeply unpopular with those who have been subjected to the experiment to date.