Labor reintroduces cashless welfare card, despite promises not to

March 31, 2023
Labor has swapped out the Cashless Debit Card for its new SmartCard.
Labor has swapped out the Cashless Debit Card for its new SmartCard, maintaining compulsory income management. Graphic: Services Australia

Federal Labor has reneged on its pre-election promise to end compulsory income management by introducing the new Indue SmartCard.

While supposedly voluntary, it reinstates the framework for a national expansion of income management and allows the social security minister to extend income management restrictions to new categories.

Labor had campaigned against the privately-run Cashless Debit Card (CDC) and promised to scrap it in government. The Senate passed the Social Security (Administration) Amendment (Repeal of the Cashless Debit Card and other measures) Bill 2022 last September which scrapped the Indue CDC, but retained a BasicsCard in some communities, to be administered by the Department of Social Services and Services Australia.

The BasicsCard can only be used at outlets approved by the Department of Human Services. The CDC can be used at any outlet the Department has not blocked.

The new Social Security (Administration) Amendment 6 (Income Management Reform) Act 2023 and related instrumentswhich passed the House of Representatives on March 28, reintroduces and locks in compulsory income management as part of the social security system.

The changes give the minister the power to extend income management restrictions to new locations. This means that even if current minister Amanda Rishworth decides not to do this, a future minister could.

While the new SmartCard does allow some communities to decide whether or not they go on income management, it does not give individuals the ability to opt-out.

People can be put on the SmartCard if their children have an “unsatisfactory” school attendance record, or if they are categorised as “disengaged youth” or “long-term welfare payment recipients”. They can also be put on the card if a state or Territory official, of a recognised authority, decides they should be, or if they voluntarily agree to it.

Greens social services spokesperson Senator Janet Rice said on Twitter on March 28 that “the only differences between Labor’s SmartCard & the CDC are its name and colour”.

“It’s an insidious bill that hugely expands the Minister’s power to roll out compulsory income management in new areas and allows the SmartCard to apply nationally, despite Labor’s campaign against CDC in opposition,” Rice said.

Rice said people on the BasicsCard now can “‘voluntarily’ go onto the new Indue SmartCard, but are under compulsory income management either way. It’s a very loose use of the term ‘voluntary’ — choose which compulsory card you want to go on.”

The Antipoverty Centre (AC) described the changes as “the biggest expansion of cashless welfare since the introduction of the BasicsCard”.

It said the use of the term “voluntary” is “misleading”. “The government is saying a community will voluntarily introduce the scheme, but people will be forced onto the card. This is not a voluntary scheme,” the AC said.

The Parliamentary Joint Committee on Human Rights on March 4 released a report on the new scheme which questioned why, if the government is intending to introduce a voluntary income management scheme, the changes “extend compulsory participation in the enhanced income management regime”.

Widespread criticism of income management cards has led to the new law also including funding for community services in former CDC-administered areas — including mentoring programs, mental health services and employment support.

But income management programs disproportionately impact the poorest communities, including First Nations people, limiting their financial autonomy. Evidence also shows they have a particularly negative impact on women.

The Conversation noted last September that income management programs echo “the overtly paternalistic motivations of earlier government efforts to control the incomes of Aboriginal people” and “compound disadvantage and vulnerability”.

scathing 2018 report by the Australian National Audit Office found that even after a five-year CDC trial, there was no evidence the card was working. It also found the cost to administer it was $170 million.

Meanwhile, Labor is still refusing to raise the rate of JobSeeker and other welfare payments, claiming that it cannot afford to.

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