The Labor Party’s promise to scrap the Cashless Debit Card (CDC) is a step closer after the House of Representatives passed the Social Security (Administration) Amendment (Repeal of the Cashless Debit Card and other measures) Bill 2022 on August 3 by 82 votes to 56. It goes to the Senate on September 5.
A scathing report published by the Australian National Audit Office in June found that, after five years, the Coalition government had not demonstrated whether the card was working.
Social services minister Amanda Rishworth said on June 3 that the CDC cost $170 million to administer and that she would be “working with local communities on better local solutions”.
The CDC is administered by Indue, a company with links to the Coalition.
The Coalition has been trialing the CDC in various parts of the country. Participants lose control of 80% of their income.
Proponents of the CDC claim it is about stopping people from spending on drugs and gambling but, in practice, the restrictions are greater: welfare recipients cannot spend at markets, opportunity shops, cash-only venues or make other second-hand purchases.
There is no evidence from the CDC trial areas that it reduced crime, alcoholism, drug use or gambling. In some areas, crime rates have risen. It is hardly surprising that some would turn to illegal avenues to secure cash when legal avenues are denied.
The former Coalition government refused to release the findings of an Adelaide University report on the CDC in the lead-up to a vote on whether to extend and further entrench CDC trials in December 2020. When the Adelaide University report was eventually made public in February last year, it confirmed the CDC’s failure to meet its stated goals.
The hardships inflicted on CDC holders were confirmed by Bundaberg mother Kerryn Griffis, who told the ABC on June 22 that the card “has massively negatively impacted mine and my kids’ lives”.
“It has been a nightmare being on the card. All the local landlords know the trouble tenants have with paying their rent on time, so nobody wants to rent to someone on a card.”
In February, 17,000 people were on the CDC.
Rishworth said the government had instructed the Department of Social Services to stop placing people on the CDC in the trial regions, and the legislation to scrap the CDC would make it easier for people to leave it from September.
In addition to Labor's votes, 13 more are needed to pass the bill in the Senate. The 12 Greens Senators and independent Senator David Pocock support its scrapping. Pocock said it “clearly isn’t doing what it is meant to do”.
The position of the two Jacqui Lambie Network Senators is less clear, as Lambie has insisted on a Senate inquiry. No Cashless Debit Card Australia is urging cardholders and supporters to make submissions: the closing date is August 10. The inquiry will report by August 26.
Greens spokesperson Janet Rice called on Labor to end all forms of compulsory income management, including the BasicsCard, which has been in place since 2007.
“I hope this inquiry will be an opportunity to hear from those that will be forced onto the BasicsCard once the CDC ends, and how our current compulsory income management system is deeply broken and needs to be urgently fixed,” she told the Guardian on August 4.
According to the July 29 National Indigenous Times, more than 25,000 people — mainly in the Northern Territory — are still on the BasicsCard.
“Welfare recipients in the Territory forced on to the BasicsCard fall into two key categories: people aged 15–24 years who have been receiving an eligible payment, including JobSeeker, Youth Allowance, Special Benefit and Parenting Payment, for three of the previous six months, and people aged 25 years and above who have been receiving an eligible payment for more than one of the last two years,” Giovanni Torre wrote.
The NIT also reported that a Department of Social Services spokesperson said income management would remain compulsory for long-term payment recipients in the NT “and anyone referred by a child protection authority, an approved organisation, or a social worker”.
If the bill passes the Senate, as looks likely, it will be easier for people to transition off the CDC over 6 months, from September.
The Coalition opposition wants to delay the process and, if the vote fails, is hoping that the trial’s expiry on December 31 will cause chaos thereby giving it ammunition to argue to reintroduce the CDC if it regains power.