Will Labor abandon the paternalistic cashless welfare card?

May 18, 2022
Image: No Cashless Debit Card Australia/Facebook

What happens to the pernicious cashless debit card (CDC) scheme after the election has not received much attention. Labor has promised to make the scheme voluntary and the Coalition claims not to have a plan to expand it.

First introduced in 2015, the CDC program forces welfare recipients, including disability and aged pensioners, to accept compulsory income management, administered by the private financial services corporation, Indue Limited.

Amanda from Say No Seven, a group campaigning against the CDC, told Green Left that the CDC law “ultimately institutes segregation”.

“It’s not just for “remote communities out in the distant, the fact [is] that 40.9% of people on the card today live in urban areas and they are white. This card is going national.”

Say No Seven has collected data about the CDC from government studies as well as anecdotes from those on the scheme. Some of the findings come from a 2021 study by the University of Adelaide, on behalf of the Department of Social Services, which found that the lives of those people on the card were no better or, in most cases, had become substantially worse.

She said the basics card also now covers some aged care pensioners, who were added as a group to the law for the first time in December 2020. “At the moment it’s limited”, she said, but “there is nothing preventing the Coalition from including aged pension payments [across the board] a future bill”.

Hayden Patterson, a board member of the Australian Council of Social Services (ACOSS) and a former president of the Australian Unemployed Workers Union, told Green Left that the government had tried to justify putting people on CDCs to teach them economic literacy.

Patterson recounted how three generations of his family, in the northern suburbs of Adelaide, have been dependent on welfare. “No one really expected anything or [were given the] opportunity ... I’ve got 27 siblings. No one in my family went to university ... People like ScoMo [who are] sitting on $1960 a day, that’s before expenses and allowances, [are] telling me that $44 [a day] is enough and that if I can’t afford somewhere to rent, go buy a house.

“I’m related to half of the town of Ceduna [in South Australia, where the program was first trialled] ... these people were told it’s a 12 month trial and this was six years ago.”

The Coalition set out to amend the Social Security (Administration) Amendment (Continuation of Cashless Welfare) Bill 2020 to “remove the trial parameters to establish the Cashless Debit Card (CDC) as an ongoing program”. It failed but the trial was still extended.

Patterson said people can apply to come off of the card but in Ceduna, 88 people applied over a year and a half ago and “only eight have been successful. The rest are just sitting there in No-Man’s Land. And I’ll tell you right now that none of those people that have come off are Indigenous.”

Ange Carr, a welfare worker and Senate candidate for the Socialist Alliance in Victoria told Green Left how CDCs disempower people.

“People aren’t allowed to have any autonomy over how or where they spend their money. People in remote communities still have to do 200-kilometre round trips to purchase groceries [at the CDC stores]. This is still a really significant problem for communities ... the cost of groceries in remote areas is already astronomically high, so is petrol.”

Carr said quality mental health services, appropriate housing and access to education, services and jobs would better than punitive income rationing schemes. “The government really has no desire to provide services. This is its way of managing people.”

Patterson agreed, adding that the outsourcing of the CDC card to Indue means “taking away the duty of care”. He said when Jobseeker was doubled, briefly, during the pandemic lockdown people were lifted out of poverty.

“That money was immediately spent in local communities. It wasn’t hoarded away, or sent overseas. It was spent on dental and health care, food and fixing cars.”

Patterson said Labor representatives had told him if it wins government “it would immediately raise all income support payments by $100 a week and then do a review.” He said the party was also prepared to talk about adjusting the taper rate “so you could actually earn more money before you lose money from your income support payments”.

“Right now, if you find a temporary job or work a few hours while you’re on JobSeeker, you pay $0.60 in the dollar in tax. Who else pays $0.60 out of each dollar they earn?”

Patterson said Labor had also told him it would abolish all compulsory income management programs. But Labor’s policy in 2021 states it will not “pursue any expansion” of the Cashless Debit Card or community wide income management “without clear evidence of community benefit and informed community consent”.

Amanda said Labor should be believed. “The fundamental principle that Labor has on the Basics Cards and the cashless debit card is [that] it should be on a voluntary basis. If people want those sorts of income management, then that’s their decision ... At the moment it’s compulsion and that is not Labor’s policy position.”

Carr criticised both parties for extending the income management law when in government. It was introduced by Coalition Prime Minister John Howard during the draconian Northern Territory intervention.

“The fact that the Basics Card can quarantine up to 80% of someone’s income means people are restricted about what they can purchase and where they can purchase it. Carr said the paternalistic idea that people on welfare can “waste it” on alcohol and smokes and gambling is wrong. Yet, it costs up to $9000 to manage a person on income support.

“These punitive, paternalistic and racist schemes prohibit people from having autonomy over their spending and shows we have a very long way to go as a nation.”

A future Coalition government is fairly likely to extend the CDC, Carr said, especially to the long-term unemployed. The Morrison government’s record is to introduce punitive schemes, via Centrelink, including ones that disadvantage single mothers and cut NDIS.

However, she said she was not confident that if Labor is elected it will abandon the scheme. “We have seen Labor take a passive kind of back-seat approach; it often just continues with the status quo.”

Video: Stop the cashless welfare card, raise JobSeeker | Green Left Show #22 - YouTube/Green Left.

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