Introduction
2.1
The primary purpose of the cashless debit card (CDC) trial is to address the social harms that result from the misuse of alcohol, drugs and gambling. Evidence from submitters and witnesses indicated broad recognition of the need to address antisocial behaviour and crime, while at the same time supporting improvements in social and financial wellbeing at an individual and community level.
2.2
The Social Security (Administration) Amendment (Income Management to Cashless Debit Card Transition) Bill 2019 (bill) provides for the extension of the CDC trial, through the transition of Income Management (IM) participants in the Northern Territory (NT) and Cape York region to the CDC and the extension of the CDC trial in each of the existing trial sites until 30 June 2021.
2.3
This chapter discusses some of the key issues raised by inquiry participants during the committee’s inquiry into the bill. First, it considers the steps being taken to engage with communities throughout the expansion of the trial and the evidence regarding community support for the CDC. The chapter then considers key concerns raised by submitters and witnesses, including:
the transition from IM to the CDC in the NT and Cape York;
the evaluation of the impact of the CDC to date, including the impact of the CDC on:
wellbeing in the trial sites;
individual health and wellbeing; and
the application of ministerial discretion.
Community engagement
2.4
Submitters expressed the view that effective community engagement was a key contributor to the effectiveness of the CDC trial. The committee heard evidence that community level engagement was necessary to ensure the effective adaptation of the CDC to the different trial sites, particularly in the transition from IM to CDC in the NT and Cape York trial sites.
2.5
Allan Suter, Mayor of the District Council of Ceduna during the introduction of CDC in the Ceduna trial site, reported issues identified early in the trial were effectively addressed through ongoing engagement between the Department of Social Services (DSS) and the council.
Consultation in the NT and Cape York trial sites
2.6
DSS described the community consultation and engagement processes it has undertaken as part of the preparation to transition the NT from IM to the CDC trial. For example, during August and September 2018, DSS held initial meetings with key community leaders and organisations in the Barkly region in the NT. DSS advised that such meetings have provided an opportunity to share information about the CDC with communities and for DSS to seek feedback to guide the transition process and future engagement with the broader community.
2.7
Through this consultation process, DSS received feedback that the existing rate of 50 per cent quarantining of funds for most IM participants should be retained when those participants transition to CDC in the NT. This rate is different to all other CDC sites, where 80 per cent of a participant's payment is placed onto the card.
2.8
The Cape York Institute reported that along with the Family Responsibilities Commission, they had attended meetings with representatives from the Department of Prime Minister and Cabinet to discuss transitioning participants in the Cape York area from IM to CDC trial. They also noted that as a result of this consultation the Cape York trial area would still retain its unique features, including the Family Responsibilities Commission's IM model.
2.9
The committee received evidence that communities in both the NT and Cape York trial sites consider CDC to be a superior product to the BasicsCard, through which IM participants currently access their income managed funds. Communities reported that the CDC offered improved functionality and consumer choice for participants.
2.10
DSS noted that the bill contains measures which build the participation of community bodies into the operation of the CDC trial, including:
ensuring existing arrangements with community bodies in specific trial areas are retained, and allowing communities to have a say in how the CDC trial is implemented in their community; and
allowing the secretary to inform community organisations that a person has ceased to be a trial participant in order to support community bodies in monitoring the effectiveness of the CDC trial.
Concerns
2.11
Some inquiry participants raised concerns about the proposed introduction of the NT and Cape York as CDC trial sites. Submitters noted that the NT has a highly geographically-dispersed population covering communities in urban, regional and remote areas, expressing concerns that the CDC was not a sufficiently targeted means of addressing socially harmful behaviour in those diverse communities.
2.12
Some community leaders and organisations expressed concern about the extent of the consultation which had been conducted to date. Some witnesses were concerned that they were being informed about matters which had already been decided.
Support to facilitate transition
2.13
DSS advised the committee that it will continue to engage with community leaders and organisations as part of the transition process from IM to the CDC trial across the NT and Cape York. The transition process for communities in the NT will be staggered over nine months, providing DSS the opportunity for ongoing consultation on a community by community basis throughout the transition to the CDC.
2.14
DSS reported that it had not yet decided how the $17.8 million for transition support in the NT and Cape York had been allocated. It advised that the consultation process with community leaders and organisations in the NT and Cape York would inform DSS's choices of services to which the funds should be directed, such as the provision of resources in language and access to interpreters.
Community support
2.15
Some inquiry participants from the existing CDC trial sites and in the proposed new trial sites indicated strong support for the CDC trial, as IM and the CDC trial improve social wellbeing outcomes and reduce social harm.
2.16
Evidence received from community representative groups in CDC trial areas indicated that the trial has been effective in reducing participants' socially harmful behaviours within their communities.
2.17
These community groups also noted other benefits to their communities such as increased attendance at schools.
2.18
The Shire of Coolgardie's submission contained the results of a survey which the Kalgoorlie-Boulder Chamber of Commerce and Industry undertook in early 2019. Of the 82 business members who completed the survey, 72 per cent observed a decrease in antisocial behaviour in the Kalgoorlie-Boulder Central Business District since the introduction of the CDC, with 87 per cent of respondents observing that that the CDC had made positive changes through the Goldfields area.
2.19
Cape York Institute cited the findings of the Queensland University of Technology's 2018 review into IM in Cape York as evidence of the trial's success in reducing social harm. Amongst other benefits for trial participants and communities, Cape York Institute noted an increase in time between breach notices (for failure to meet social obligations) for participants.
2.20
The Minderoo Foundation's Generation One submission indicated that they had received accounts through their collection of data in CDC trial areas that socially harmful behaviour had decreased in the respondents' communities. As well as receiving accounts of positive changes in trial sites, particularly for children, Generation One had spoken to participants who told them that the CDC helped them to reduce their alcohol consumption and manage their finances more effectively.
2.21
DSS cited research from the ORIMA Research report which indicated the CDC trial was reducing socially harmful behaviours in the trial areas. It noted the decline in drinking alcohol and gambling, with 41 per cent of participants surveyed indicated they were drinking alcohol less frequently, and 37 per cent of participants reporting less frequent binge drinking. The report also noted a decline in gambling and illegal drug use, with 48 per cent of participants indicating that they gambled less, and 48 per cent reporting that they used illegal drugs less frequently under the CDC trial.
Reducing hardship and deprivation
2.22
The committee received evidence which demonstrated ways in which IM and the CDC has reduced hardship and deprivation for participants in the trial sites, including experiencing an increase in funds available for healthy food and other essentials.
2.23
The Maningrida Progress Association indicated that both IM and a community based income quarantining program had benefitted members of its community. The association's manager, Mr Rob Totten, reported:
In my opinion, 50 per cent quarantine of people's income from Centrelink with a BasicsCard has improved the wellbeing of families in allowing them the opportunity to purchase essential foods and goods.
2.24
Mr Totten also noted that those income quarantining programs contributed to the success of the Maningrida Progress Association's business enterprises, which include a supermarket, takeaway and bakery.
2.25
Generation One noted that some CDC trial participants reported having more money to spend on food for themselves and for their families. Participants' testimony also indicated that they were better able to afford clothes for their children, including school uniforms.
2.26
DSS cited research from the ORIMA Research report indicating that the CDC trial was improving the wellbeing of both participants in the trial and the wider communities in the trial areas. Amongst the benefits that participants noted were an improvement in child welfare and wellbeing, and improvements in financial security.
Concerns about impacts on wellbeing
2.27
Some individual submitters reported that their health and wellbeing was affected by the limitations that the card placed on their purchasing choices, and their obligations to comply with the terms of the card.
2.28
The Danila Dilba Health Service noted that the CDC trial does not address key factors which affect participants' health, including the accessibility and affordability of healthy food.
2.29
Some organisations raised concerns that CDC trial participants could potentially experience shame and social stigma when using their card.
2.30
Ms Marlene Hodder of the Intervention Rollback Action Group reported:
People express feelings of shame when using the BasicsCard, of astigmatism on being looked down on as not being able to manage their own affairs. Business owners often assume all Aboriginal people are on the BasicsCard, which is extremely offensive. Some people become disillusioned with the system and withdraw.
Key concerns raised by submitters
Evaluation
2.31
Submitters were supportive of ongoing evaluation of the CDC trial. The committee heard that decisions about the direction of the CDC trial should be based on reliable evidence, which DSS should acquire through ongoing evaluation processes.
2.32
As was the case in previous inquiry reports related to CDC legislation, some submitters questioned the methodology and characterisation of the results of the final evaluation report prepared by ORIMA Research in 2017. They argued that there was insufficient evidence to support claims of the trial's effectiveness.
2.33
DSS had indicated to the committee in 2017 that ORIMA Research had recognised the limitations of some of the data sources used in its evaluations and had provided caveats where necessary.
2.34
DSS also advised that further evaluation is being undertaken, with the University of Adelaide currently completing a second independent impact evaluation of the CDC in the first three sites of Ceduna, East Kimberley, and the Goldfields region, and a baseline data collection in Bundaberg and Hervey Bay region.
2.35
The explanatory memorandum notes that the bill contains provisions which streamline the trial's evaluation process, and extends the end date of the CDC trial, providing a longer period over which the trial can be evaluated.
Cash-based economic activities
Limitation to access
2.36
Some submitters noted that the restriction to cash experienced by IM or CDC trial participants limited their opportunities for purchasing second-hand goods, or produce at community markets. This was of particular concern to participants experiencing financial hardship who indicated that second hand goods were often easily available and inexpensive, but had to be purchased using cash.
2.37
However, the Minderoo Foundation indicated that communities and individuals were developing alternatives to cash transactions. They cited the Shire of Wyndham East Kimberley which ensured that EFTPOS facilities were available during events such as fairs, shows or rodeos. They also noted an increase in individuals using direct debits when purchasing goods at garage sales as an alternative to cash transactions.
2.38
DSS acknowledged the need for participants in the CDC trial to access cash for minor expenses such as children's lunch money or garage sales, noting that participants can still withdraw the quarantined portion of their payments as cash to pay for such expenses.
2.39
Participants can also transfer money between their own and other participants' CDC accounts, providing participants the ability to purchase second hand goods from other trial participants.
Limited impacts on restricted goods
2.40
Some submitters also raised concerns that participants were able to access restricted goods in spite of the restriction the CDC places on participants' capacity to access cash.
2.41
The Department of the Chief Minister, NT, also indicated that participants could potentially find ways to gamble using the CDC.
2.42
DSS acknowledged the potential for participants to find loopholes in the operation of CDC to pay for restricted goods. However, in order to prevent abuse of the CDC, DSS have processes for the investigation of unusual patterns of transactions, and that such investigations had been undertaken in the past.
2.43
As part of the transition process from IM to CDC in the NT and Cape York, DSS is providing community engagement sessions with community groups and stakeholders. This provides an opportunity for communities to inform DSS of any concerns regarding the impact of the CDC on cash-based economic activities for DSS to consider in its development of the CDC transition process.
Ministerial discretion
2.44
Some inquiry participants expressed concern about the lack of clarity around the increase in the minister's discretionary powers, particularly in relation to the determination of rates of income quarantining for individuals and communities. Concerns were also raised about the extent to which communities were able to provide input into those determinations.
2.45
As noted in Chapter 1, the scrutiny of bills committee also expressed concerns about the extension of the minister's powers with regards to the rates of quarantined income for trial participants.
2.46
DSS explained to the committee that the minister would only vary the quarantined portion of quarantined income in response to a request from the community:
The minister will only vary the portion of payment that is placed onto the card in response to a request from the community. It would be at the request of a community to increase from the 50 per cent that most people in the Northern Territory are on to a larger quarantining amount.
2.47
DSS advised that the form that a request to change the rate of quarantined income would take is subject to ongoing consideration, and decisions around the nature of the request will be informed by the outcomes of its engagement with community leaders and organisations. DSS also reported that this power only applies in the NT trial site.
2.48
DSS noted to the committee that while the bill increases the minister's discretionary powers regarding rates of quarantined income, the secretary already has similar powers under the existing legislation:
While I note this legislation provides that [power to increase the rate of quarantined income] for the minister, under the current legislation the secretary already has a similar power and that hasn't been exercised to date.
Self-determination
2.49
The committee heard concerns that income quarantining practices in IM and the CDC trial could adversely affect participants' capacity for self-determination.
2.50
Witnesses and submitters reported that fostering self-determination in communities experiencing social harm was a key factor in the success of any initiative designed to address social harm and increase participants' wellbeing, such as IM and the CDC trial.
2.51
However, the committee heard evidence that the CDC trial supports communities who undertake initiatives which improve conditions and reduce social harms in their communities. For example, the Arnhem Land Progress Aboriginal Corporation noted that the FOODcard, its own community-based income quarantining program, operated in parallel to IM. The FOODcard program fostered self-determination both in individuals who could choose to participate in the program, and in the local communities who initiated and administered the FOODcard program.
2.52
DSS has also provided for communities in the NT and Cape York trial sites to participate in determinations about the CDC transition through its ongoing engagement processes in those trial sites. The transition will operate on a community-by-community basis, providing individual communities the opportunity to work in partnership with DSS throughout the transition process.
Human rights
2.53
Some submitters and witnesses also expressed concerns about the extent to which the bill engages and limits certain human rights, observing that the limitations placed on participants' human rights may not be reasonable and proportionate to the aims of the bill.
2.54
Some witnesses questioned the impact of the bill on the rights of Aboriginal and Torres Strait Islander peoples, whom submitters considered to be overrepresented in the trial cohorts.
2.55
Aboriginal Peak Organisations Northern Territory expressed concerns that the continued imposition of compulsory income management in the NT was inconsistent with the United Nations Declaration on the Rights of Indigenous Peoples.
2.56
The Statement of compatibility with human rights (statement of compatibility) to the bill recognised that the scheme engages and limits three human rights: the right to social security, the right to a private life and the right to equality and non-discrimination. It notes:
…those limitations are reasonable and proportionate to achieving the objectives of the welfare quarantining measures. The CDC will assist to reduce immediate hardship and deprivation, reduce violence and harm, encourage socially responsible behaviour, and reduce the likelihood that welfare payment recipients will remain on welfare and out of the workforce for extended periods of time.
2.57
The explanatory memorandum further noted that the extension of the CDC trial and the transition of participants on IM to the CDC will advance the protection of human rights by ensuring that welfare payments are spent in the best interests of welfare recipients and their dependents by restricting spending on alcohol, drugs and gambling.
2.58
In relation to concerns about the disproportionate impact of the trial on Aboriginal and Torres Strait Islander peoples, the statement of compatibility noted that the program is not applied on the basis of race or cultural factors.
2.59
Locations for the trial were chosen based on objective criteria, including high levels of welfare dependence and community harm. On that basis the statement of compatibility maintains that the rights to equality and non-discrimination are not directly limited by the bill.
Committee view
Community engagement
2.60
The committee agrees with inquiry participants that engaging and consulting with communities and organisations are paramount to enable the effective transition to CDC in the NT and Cape York trial sites. The committee is of the view that DSS is actively engaging with stakeholders to ensure a successful transition from IM to CDC in the NT and Cape York trial sites. The provision of $17.8 million for transition support in the NT and Cape York will contribute to enable a smooth and successful transition to CDC in those locations.
Reducing social harm and hardship
2.61
The committee notes that some inquiry participants expressed strong support for the CDC trial. The committee heard that IM and the CDC trial have been effective in reducing social harm and reducing hardship and deprivation. The committee acknowledges that some submitters expressed concerns about the limitations the card places on their purchasing choices. However, the committee is of the view that CDC will greatly contribute to the improvement of wellbeing outcomes.
Ministerial discretion
2.62
The committee agrees with submitters that there is a lack of clarity about the proposed increase in the minister’s discretionary powers in relation to the determination of rates of income quarantining for individuals and communities. Furthermore, the committee is of the view that clarifying the process by which communities can request an increase in the rate of quarantined income will alleviate the concerns raised by submitters.
2.63
The committee recommends that prior to the passage of the bill the Department of Social Services clarify the changes to the minister's discretionary powers to determine the rates of quarantined income, and the process by which communities can request an increase in the rate of quarantined income.
2.64
The committee believes that the provisions of the bill and DSS’s high level of engagement with a wide range of stakeholders will ensure an effective and successful transition to CDC in the NT and Cape York trial sties.
2.65
The committee recommends that the bill be passed.
Senator Wendy Askew
Chair