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Sector Warns of Big Brother Welfare as Cashless Debit Cards Look to Expand

5 May 2017 at 10:43 am
Rachel McFadden
Speculation is mounting that the government could announce an extension of its controversial income support model, known as the cashless debit cards, in its 2017 budget.

Rachel McFadden | 5 May 2017 at 10:43 am


Sector Warns of Big Brother Welfare as Cashless Debit Cards Look to Expand
5 May 2017 at 10:43 am

Speculation is mounting that the government could announce an extension of its controversial income support model, known as the cashless debit cards, in its 2017 budget.

In a statement, released Thursday, the Accountable Income Management Network (AIMN), a network of 29 prominent academics, activists and community organisations, warned the future could see 2.3 million Australian beneficiaries on what it describes as “big brother welfare”.

The statement said all Australians should be “deeply concerned” by the 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 statement said.

AIMN spokesperson and chief executive of Uniting Communities Simon Schrapel told Pro Bono News he expected the controversial income management system would most likely be rolled out in stages rather than with a national overhaul.

“But the signs are there and it was definitely the intention of the Forest report, which precipitated the cashless debit card system, to make this apply universally, that is, to all beneficiaries,” Schrapel said.

Cashless cards, which quarantine 80 per cent of welfare payments and cannot pay for alcohol, gambling or be used to withdraw cash, were introduced in Ceduna in South Australia and East Kimberley in Western Australia in February 2016.

The 12 month trial was then extended in March 2017 based on the reported success of trials as concluded by ORIMA Research in the Wave 1 Report.

“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 report said.

Schrapel rejected the overall conclusion of the report and 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 worst.”

Last month, Human Services Minister Alan Tudge said based on the “success of the trials” and rallying support from a growing number of Coalition MPs more trial sites for the rollout of the cashless cards were being contemplated.

Some in the welfare sector, however, are challenging the reported benefits of the trial and calling the cashless debit card system “punitive” and raising concerns that the scheme unfairly targets indigenous Australians.

Dr Janet Hunt from Australian National University’s Centre for Aboriginal Economic Policy Research reviewed the ORIMA report and concluded that evaluation methods raised doubts over the findings.

The ANU report concluded that while the purpose of the trials, aimed at reducing the consumption and effects of drugs, alcohol and gambling in vulnerable communities were “worthy goals” it was “‘silver bullet” thinking to believe that simple policy changes would solve the challenges they faced.

“Both Ceduna and the East Kimberley have major social and economic problems which are complex, and have resulted from a range of historical factors as well as contemporary policies,” the report said.

“It seems extremely naïve to think that controlling people’s income to the degree now happening in these trials will be the solution to these complex problems.”

AIMN member and social commentator and activist Eva Cox rejected the findings of the ORIMA report and said the evaluation methodology was “faulty and not evidence based”.

“The cashless cards are a punitive measure, designed to win credit points from electorate and scapegoat beneficiaries,” Cox said.

Cox said the scheme could have detrimental effects on the participant’s health.

“Essential to good health is a sense of agency and autonomy- the cardless cash system strips this from the lives of participants,” she said.

AIMN member and academic Dr Shelly Bielefeld said the cashless debit cards were part of “a shaming culture” that further stigmatised people receiving benefits.

“They can also lead to social exclusion,” Bielefeld said.

“The scheme limits participants ability to participate fully in their communities  –  say attend fairs and buy food from small canteens, where cash is the accepted method of payment.”

Bielefeld added the cashless card acted as a physical signifier of people’s participation in the system and could further lead to stigmatisation.

In practical terms, Bielefeld said, cashless debit cards made everyday activities such as paying rent to private landlords who only accept cash, making mortgage repayments and buying phone credit from institutions who did not accept the card, difficult.

The joint statement from AIMN raised concerns as to the permissibility of funding, and possibly extending, the trials in fiscal times.

The statement said: “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.”

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Rachel McFadden  |  Journalist  |  @ProBonoNews

Rachel is a journalist specialising in the social sector.

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