Flat White

Cancelling the Cashless Debit Card: ideology trumps reality

Graham Pinn

Getty Images

Graham Pinn

4 September 2022

9:00 AM

The Albanese/Labor government was elected with a manifesto that included discontinuation of the compulsory cashless debit card (CDC); the bill has passed through the House and awaits likely Senate approval. The plan is to make the CDC, and the pre-existing basics card, voluntary. It is unclear whether these cancellations are on practical or ideological grounds.

Domestic violence is ten times more common in Aboriginal communities, with the murder rate seven times more common. Venereal disease in children, as a result of sexual assault, is sixty times more common.

Despite being only 3.3 per cent of Australians, Aborigines make up 30 per cent of the prison population. In Queensland, young children are frequently left unsupervised and make up 80 per cent of those under 13 detained in police watch-houses. School attendance runs on average at 82 per cent compared with the national average of 92 per cent. Removal of these children from their homes is 10 times more common – another ‘stolen generation’.

Aboriginal unemployment is 14 per cent of the national total.

A total of $4.1 billion annually is spent on Aboriginal support and welfare, with 29 per cent spent on child protection and out-of-home care services, compared with 6.5 per cent for non-Aboriginal equivalents. Despite the average welfare payment to Aborigines being around double, $40,000 versus $20,000 for non-Aboriginal, these horrendous statistics demanded other measures; income control was one measure introduced to deal with Aboriginal disadvantage.

A forerunner of the CDC was the income-control Basics Card. Introduced by the Rudd/Labor government in 2008, it quarantined 50 per cent of welfare payments to specific stores, the concept being to reduce spending on alcohol, drugs, cigarettes, and gambling. This card remains in place, with an estimated 24,000 participants, mainly Aborigines.

Following pressure from the Minderoo Foundation, a trial of a replacement CDC commenced in 2016. It was confined to Ceduna in SA, East Kimberly, and the Goldfields in WA, Bundaberg, and Hervey Bay in Queensland; Cape York in Queensland, and the Northern Territory were later additions.

This card controlled 80 per cent of expenditure, leaving 20 per cent for cash. It was anticipated that more money would be put into food, and there would be less domestic and other violence.

Although intended primarily for Aboriginal communities, the trial in Bundaberg and Hervey Bay also included non-Aborigines; Aborigines, making up 4 per cent of the population in both those sites, constituted 16 per cent of those in the trial.

A government evaluation by Social Services in this area showed it was effective in reducing alcohol consumption, gambling, and domestic violence. There was also a fall in youth unemployment.

A review of Ceduna, in 2021 by Adelaide University, showed reductions in gambling, alcohol and drug use, there were also reductions in domestic violence, and improved school attendance from the 70 per cent level in 2014; hospital emergencies due to drugs and alcohol fell significantly. Conversely, a review at the same time by University of SA in late 2020, reportedly showed no effect on these factors.

A 2019 report from Adelaide University, tabled by then Minister Paul Fletcher, confirmed falls in alcohol and drug use, criminal activity, domestic violence, and fewer children on the street, in the Goldfields area. There was greater school attendance and fewer children on the streets at night.

Complaints about the CDC use were numerous.

Firstly, the scheme was considered expensive to administer, with figures as high as $10,000 per head suggested, the alternative figure being around $1,000 per person. By 2021 over 16,000 were registered on the scheme at a cost of $36.5 million that year. A recent review by Federal Labor Social Services Minister, Amanda Rishworth, put the total cost of the trial at $170 million; freedom of information requests gave an alternative figure of $18.9 million. The previous Coalition government put the cost of the CDC at around $1,100 per person.

Secondly, it was considered ineffective, a view supported by an initial review by the University of NSW in 2016. Both the St Vincent’s and the Australian Council for Social Services (ACOSS) shared an ideological view and believed it caused ‘shame and anguish’ and did more harm than good.

ACOSS suggested a voluntary scheme would be acceptable, ignoring the obvious that those who had problems were unlikely to volunteer. Following the recent release of the report of the Australian National Audit Office (ANAO), the Auditor General Grant Hehir, has found no evidence of benefit; the problem in the CDC evaluation being the lack of clear endpoints which could be assessed.

From the contradictory statistics it is apparent that there has been poor evaluation of the scheme, resulting in difficulty with cost-benefit analysis. Those on the ground have little doubt there has been improvement but, despite the scheme being intended for all those on benefits, it is viewed by many on the Left as punitive, discriminatory, and racist. The third, ideological complaint, is that the scheme causes ‘social exclusion, stigmatisation, increased financial hardship, erosion of individual autonomy and dignity’.

As with any trial scheme, loopholes have appeared; it is apparently possible to use the CDC to pay a bill accumulated on a credit card, a bill which may have been for unauthorised use; this anomaly is exactly the reason for trials. There is no recognition of the source of these welfare payments, or the fact they need more, not less monitoring.

Rather than discontinue its use, is there a case to be made for its improvement, continuation, and extension to non-Aboriginals as planned? Certainly, at a cost of $1,100 per person, it seems a bargain to monitor the huge welfare cost to the taxpayer.

We await the likely outcomes of Parliament projected to cancel the scheme in September. The reinforcement of the ideological right of individuals to spend what they claim is ‘their money’, without paternalistic control, is likely to have significant health and social adverse outcomes.

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Published by Nelle

I am interested in writing short stories for my pleasure and my family's but although I have published four family books I will not go down that path again but still want what I write out there so I will see how this goes

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