Government’s Cashless Debit Card Trials to be Extended

The federal government is to extend the use of the controversial cashless debit card in trial sites in Ceduna in South Australia and East Kimberley in Western Australia despite community and political disquiet.

Human Services Minister Alan Tudge said in a statement that the extension was “due to the strong independent evaluation results” of the first 12 months of the trial and in consultation with community leaders.

The Wave 1 Report, undertaken by ORIMA Research, concluded: “Overall, the [trial] has been effective to date… in particular, the trial has been effective in reducing alcohol consumption, illegal drug use and gambling – establishing a clear ‘proof-of-concept’.”

The government introduced the card trial in February 2016 in a bid to reduce the effects of “welfare-fuelled alcohol, drug and gambling abuse” and “assist people to break the cycle of welfare dependency by stabilising their lives and helping them into employment”.

The report evaluation found: “Most stakeholders felt that excessive alcohol consumption was at a ‘crisis point’ and was having wide-ranging negative impacts on individuals, their families and the community.”

Under the trial, 80 per cent of welfare payments were placed onto a recipient’s card, with the remaining 20 per cent placed into their regular bank account.

The evaluation results across the two trial sites found:

• Alcohol – 25 per cent of participants and 13 per cent of family members reported drinking alcohol less frequently, while 25 per cent of participants reported engaging in binge drinking less frequently.
• Gambling – 32 per cent of participants and 15 per cent of family members reported gambling less.
• Drug use – of trial participants surveyed who reported using illegal drugs before the trial commenced, 24 per cent reported using illegal drugs less often.

Tudge said the evaluation data also found that 31 per cent of the participants surveyed indicated they had been better able to care for children and save more money.

According to the report: “Reductions in alcohol consumption, illegal drug use and gambling have been largely driven by the impact of the debit card quarantining mechanism and not by the additional services provided.”

However the report suggested that there were incidents of increased “humbugging”  – a term that refers to people pestering friends and family for cash.

“Changing the targets of humbugging to those who can access cash; and illegal and undesirable behaviours in order to obtain cash, including crime and a couple of examples of suspected prostitution were reported,” it said.

“Some stakeholders reported that there had been an increase in humbugging, particularly of age pensioners [who were not included in the cashless debit card trial].”

Tudge said: “The card is a not a panacea, but it has led to stark improvements in these communities. There are very few other initiatives that have had such impact.

“A large part of the success has been the close working relationship with local leaders, who have co-designed and implemented the trial with us. The South Australian and Western Australian state governments have also been very supportive.

“There is still a lot of work to do, but if we can continue on this path, then over time we can make these communities safe, healthy and prosperous once again.”

He said the extension of the card would allow the government to make fully informed decisions about the future of welfare conditionality.

In September 2015 welfare organisations slammed the cashless welfare card, telling a Senate inquiry into the initiative that the government had not tested ethical grey areas.

With the release of the trial evaluation on Tuesday both the Australian Greens and the National Social Security Rights Network (NSRN) expressed their continuing opposition to the card and its further extension.  

Executive officer of NSRN Matthew Butt said: “It is difficult to attribute any improvements in certain statistical measures to the card itself, as opposed to increased support and services associated with it.  

“In any case, a standard cost-benefit analysis suggests that this is an extremely inefficient intervention.

“We think the government should trial investment of the same significant amount of resources in a non-coercive measure designed in consultation with a community. That is the real way to understand whether coercion of this kind could conceivably be justified on standard measures of policy efficacy.”

Australian Greens Senator Rachel Siewert said as many as 50 per cent of people using the cards reported their lives were worse under the trial.

“These participants… will be devastated that it has been extended with six monthly reviews,” Siewert said.

“The extension of the cashless welfare card in the East Kimberley and Ceduna will come as a shock to many people who were told they would only be on the card for a year.

“The Wave 1 evaluation report is largely based on perceptions and is for the first three months. It is not the full year and should not be used to justify extending the trial.

“Participants and their family members have also felt humbugging has gone up, I have expressed concerns that this would happen.”

However, mining magnate and philanthropist Andrew Forrest, who first recommended the cashless card system back in 2014 as part of his Review of Indigenous Training and Employment Programmes and the Creating Parity report, has welcomed the evaluation.

Through the Minderoo Foundation which Forrest chairs, he called for the card to be expanded for use in other vulnerable communities.

“These results are a great achievement and the elders who had the courage to champion the card should feel justly proud,” Forrest said.

“The card was a success when it improved the life of a single drug or alcohol addicted person. This report exceeds all expectations and shows that over 100 people are leading healthier and more productive lives.

“I call on the government to exercise similar courage and introduce the CDC to other vulnerable communities, and those aged 17 and under on welfare payments.”

The final evaluation report by ORIMA Research is due mid-2017.

Download the Initial Conditions Report and Wave 1 Interim Evaluation Report.