Tag: Cashless Welfare

Mounting Evidence Against Cashless Debit Cards

It would be nice if the “facts” being thrown around in the debate over the Cashless Debit Card were peer-reviewed, or even just evidence-based. Via The Conversation.

Instead, there are anecdotes. And it’s these that are being used to justify the government’s decision to spend A$128.8 million over four years continuing the existing trial of the cashless debit card in five sites in Western Australia, Queensland and South Australia and extending it to Cape York and all of the Northern Territory.

The extension will lift the number of people on the card from 11,000 to 33,000. Most will be Indigenous people – its disproportionate targeting has already attracted the attention of the National Congress of Australia’s First Peoples and the Human Rights Commission.

The cashless card was recommended to Prime Minister Tony Abbott in a report from mining billionaire Andrew Forrest in 2014. He initially called it the “Healthy Welfare Card”.

It wasn’t a new idea. Some A$1 billion dollars had already been spent on income management programs in the past, many of which had failed to meet their stated objectives.

It’s been tried before

The 2007 Basics Card. AAP

The biggest was the Basics Card introduced as part of the 2007 Northern Territory Emergency Response (the “Intervention”) which was only made possible through the suspension of the Racial Discrimination Act.

Research published by the Australian Research Council funded Life Course Centre of Excellence found its introduction was correlated with negative impacts on children, including reductions in birth weight and school attendance.

It points to several possible explanations, including increased stress on mothers, disrupted financial arrangements within households, and confusion about how to access funds.

The government has not addressed these serious issues. Instead, it now seeks to place those who have been left on the basics card for over ten years now, on to the cashless debit card.

What was ‘Basics’ has become ‘Indue’

The 2016 Indue Cashless Debit Card. indue.com.au

The “Indue” Cashless Debit Card trials underway since 2016 direct 80% of each payment to the card (Forrest asked for 100%) where it can only be spent on things such as food, clothes, health items and hygiene products. Purchases of alcohol and withdrawals of cash are not permitted.

The trials are compulsorily for everyone living in the trial sites receiving a disability, parenting, carer, unemployment or youth allowance payment.

My own research in the East Kimberley found it makes those people’s lives harder.

Those targeted are a broad group needing support for a broad range of reasons, yet all are treated as if they have issues with alcohol or drugs or gambling.

Most of the people on it do indeed have a common problem: that is trying to survive on meagre payments in remote environments with a chronically low supply of jobs.

Of all the claims made for the card, the least believable is that it gets its users into jobs.

What it does do is limit access to cash needed for day to day-to-day living. It makes it hard to buy second-hand goods, transport and (at some outlets) food, and can make living more expensive.

For anyone actually struggling with addiction, it can’t substitute for treatment, a concern raised by medical specialists.

While the government says the trials have been community-led, in reality consultation has been limited to a small group of people not subject to the card.

When leaders in the East Kimberley who had agreed to the card withdrew their support, the government continued with the trial.

Its success has not been established

In addition to relaying on anecdotes, the government continues to cite a widely condemned report by Orima Research. Among others, the Australian National Audit Office found this report was inadequate to draw any conclusions from.

Profiting from the Cashless Debit Card has been Indue, a private company whose deputy chairman up until 2013 is now the present President of the National Party, Larry Anthony.

Indue’s involvement is helping to create a two tiered banking system in which most people have a choice of financial providers, but those subject to the card are restricted to one, which provides a very different product to the others.

Indue is also not a member of the Australian Banking Association, and so is not bound by the consumer protection provisions of its Banking Code of Practice.

The inquiry is due to report next week. Given the expensive and harmful consequences of the trial, it ought to find the extension is not justified. There are better ways to spend $128.8 million that would actually help vulnerable Australians.

Author: Elise Klein (OAM), Senior Lecturer in Development Studies, University of Melbourne

Cashless Welfare Card – Not So Flash

“This is a bit controversial, we know that,” deputy prime minister Michael McCormick told the National Party’s federal council, which on the weekend voted for a national roll-out of cashless debit cards for anyone younger than 35 on the dole or receiving parenting payments. From The Conversation.

The Nationals have joined the chorus within the federal government proclaiming the cards a huge success.

The Minister for Families and Social Services, Anne Ruston, has even gone so far as to claim welfare recipients are “singing its praises”.

Really?

Both McCormick and Ruston have proclaimed success based on the most recent trial of cashless welfare in Queensland. This trial began barely six months ago, and the independent evaluation by the Future of Employment and Skills Research Centre at the University of Adelaide is ongoing.

A more complex story emerges out of my research into lived experiences of the first cashless debit card trial, which began in Ceduna, South Australia, in March 2016

I spent about three months in the town of Ceduna between mid 2017 and the end of 2018 talking to people about life on the card.

Ceduna is located on the north-west coast of Eyre Peninsula, South Australia. www.shutterstock.com

All communities are diverse and people’s experiences diverge. Some liked the card, or had come to accept it, others were caught up dealing with far more significant problems.

But I talked to people who found the card “an insult”. They told me it made them feel “targeted” and “punished”. They talked of degradation and defiance. They also told me the card didn’t work.

As for the the claim by both Ruston (and her ministerial predecessor Paul Fletcher) that the card empowers people to “demonstrate responsibility”, the opposite was true. In the words of June*, an Indigenous grandmother, foster carer and talented artist: “It has taken responsibility away from me. It’s treating me like a little kid again.”

Indigenous testing grounds

Ceduna, in the far west of South Australia, was the first of four sites chosen to trial cashless debit cards. The second was in the East Kimberley

The location of these two trial sites meant early trial participants have been predominately Indigenous. I am of the view that Indigenous communities are being used as testing grounds for new technologies and controversial measures.

The BasicsCard, introduced in 2007. AAP

In the first two trial sites, income support recipients younger than 65 have just 20% of their payment deposited into their bank account. The remaining 80% goes on to their debit card, which cannot be used at any alcohol or gambling outlet across the nation. Nor can they be used to withdraw cash.

The lead-grey cashless debit card is similar but different to the lime-green BasicsCard, introduced as part of the 2007 Northern Territory National Emergency Response (the “Intervention”). The use of the BasicsCard as an “income management” tool was extended to non-Indigenous people in the Northern Territory in 2010, and to other states in 2012.

The BasicsCard generally quarantines 50% of a social security recipient’s income so that it cannot be spent on alcohol, gambling, tobacco or pornography. BasicsCard holders need to shop at approved stores. In contrast, the cashless debit card, administered by financial services company Indue, can theoretically be used wherever there are Eftpos facilities.

Shame and humiliation

My research wasn’t based on collecting statistics but “hanging out” and getting to know people. I came to see the stigma associated with the “grey card” sometimes resonated with past experiences.

Robert*, for example, told me about growing up on a mission and then suddenly finding himself as “one little blackfella” in a large high school. He was acutely sensitive to the “smirks” and judgements of others whenever he used the grey card to pay for things.

Pete* left high school after a couple of weeks to join an itinerant rural workforce that has since vanished. After decades of manual work, finding himself unemployed due to ill health was devastating enough. Being issued the grey card compounded his humiliation.

Others voiced their belief the grey card was designed to induce shame. But they refused that shame, expressing instead a defiant belief in the legitimacy of their need for support.

The welfare system often defines people by the one thing they are not currently doing – waged employment. But many people I spent time with in fact laboured constantly: it just wasn’t recognised as work. People like June*, for example, looked after sick kin, the elderly and children. Yet the grey card treated them as dependents.

I heard about ways of getting around the card’s restrictions. As one acquaintance put it: “Drunks gonna drink!” One strategy involved exchanging temporary use of the card for cash. With terms that nearly always disadvantage the card holder, it has the potential to make life tougher for people living in hardship.

These observations concur with the sober assessments of experts such as the South Australian Aboriginal Drug and Alcohol Council.

The evaluation of the Ceduna trial for the Department of Social Services was more positive, noting that alcohol drinkers and gamblers reported doing so less frequently. But it also noted no reduction in crime statistics related to alcohol consumption, illegal drug use or gambling. And the Australian National Audit office was so critical of the government’s evaluation it concluded that it was difficult to ascertain “whether there had been a reduction in social harm” as a result of the card’s introduction.

Which makes simplistic claims about the card’s success look a bit rich.

Author: Eve Vincent, Senior Lecturer, Macquarie University