Coalition Senators strongly disagree with the intent of the Social Security (Administration) Amendment (Repeal of the Cashless Debit Card and other measures) Bill 2022 and the recommendations of the majority report.
Income Management (IM) has been in place in Australia since 2007. The technology that enabled Electronic Funds Transfer at Point of Sale (EFTPOS) transactions was introduced in 2008 via a technology referred to as the Basics Card. The Basics Card technology is standalone and can only be used in approximately 15,500 designated outlets that are individually approved by government to accept the Basics Card. As a result, the availability of Basics Card infrastructure is highly restricted.
The Cashless Debit Card (CDC) is a new and approved alternative technology for the delivery of IM and operates using existing banking infrastructure and as such CDC card holders are able to use their card at around 1 million outlets across the country that have EFTPOS facilities as well as online and internationally.
The CDC program is supported by an overall suite of measures implemented to help people improve community safety, to stabilize people’s lives and to help them become job ready. The program includes a $30 million Jobs Fund and job ready initiative and $50 million for drug and alcohol residential rehabilitation facilities.
The CDC program commenced in Ceduna, South Australia on 15 March 2016 and has been in East Kimberley, Western Australia since 26 April 2016. It was progressively rolled out in the Goldfields, Western Australia, since 26 March 2018 and introduced in the Bundaberg and Hervey Bay regions, Queensland, since 29 January 2019, in the Cape York region, Queensland and the Northern Territory since early 2020. As at 5 August 2022, 17,754 participants were using the Cashless Debit Card around Australia.
The CDC program was sparked by the heartbreaking report of the ‘sleeping rough inquest’ into the deaths of six people in South Australia’s far west coast, handed down by the state’s coroner in 2011. It found that efforts to curb alcohol abuse in the region had not been successful and that it was having devastating impacts on individuals, their families and their communities.
The Cashless Debit Card program was designed to be a tool that could assist communities in addressing social harm issues such as domestic violence, child neglect and other antisocial behaviours that arose from alcohol and substance addiction and long-term welfare dependency.
Indigenous community leaders approached the government for support and worked with government to establish the CDC program. The further rollout of the program was established on the same basis - that being community support.
In 2020, the Social Security (Administration) Amendment (Continuation of Cashless Welfare) Bill 2020 was passed that enabled Income Management recipients in the Northern Territory to voluntarily transition from the Basics Card to the CDC.
As at 5 August 2022, 4,398 participants have chosen to transition from Income Management to the Cashless Debit Card in the Northern Territory.
It is important to note that the CDC is one of two schemes for income support recipients that aim to limit spending on harmful goods such as alcohol, illicit drugs, and gambling. The other scheme is the Basics Card. This legislation seeks only to abolish the Cashless Debit Card. Evidence given by the Department of Social Services confirmed that it is the intention of the Government to extend income management, via the Basics Card, through the extension of existing instruments. Of the two mechanisms for delivering IM, the CDC was considered by almost all stakeholders to be a significantly superior technology to the Basics Card.
Absence of consultation
Coalition Senators contend that this inquiry has revealed that this legislation, that seeks to implement Labor’s election commitment to abolish the CDC as a mechanism to deliver IM, does not have support of the community elders where the program operates. These communities support the program and want to see it continue.
Coalition Senators contend that the Government has clearly failed to consult with the communities, in particular Indigenous communities, that this legislation affects. Despite the Government’s election commitments to consult Indigenous people on policies and decisions that affect them, the Government has instead forced this policy on those communities without consultation.
The Government has failed to give Indigenous communities a voice on this issue and has instead listened to the voices of their inner-city voters in developing their policy.
The devastating impact of removing the CDC supports to communities was highlighted by evidence given at the hearings.
Noel Pearson, Founder and Director of Strategy of the Cape York Partnership, said:
I think this legislation will wipe out 20 years of my work.
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…. in the absence of a solution that had the same functionality as the cashless debit card, our Family Responsibilities Commission and the welfare reform work that we've done via that over the last 20 years will collapse, and that would be a very bad thing.
We'd just have to give up. We would come to the point of just giving up on the idea that we can change anything for the future of these communities. You guys will repeal this thing and then you'll walk away.
You will repeal the card and then you will walk away and leave us to the violence, leave us to the hunger, leave us to the neglected children. It's very easy to forget about remote communities.
The City of Kalgoorlie-Boulder stated in its submission:
The decision to abolish the CDC has been made without any consultation with the regional community and the City of Kalgoorlie-Boulder remains unconsulted on how the transition will impact CDC participants, social services providers, government agencies, and the community.
Likewise with witness account from Mayor Perry Will, District Council of Ceduna:
We've had no consultation about it at all. The first we heard of it was in the PM's election promises, that he was going to do it. Prior to that, we had had no representation from any Labor politicians.
Former Mayor, Mr Allan Suter OAM stated a similar lack of on-ground consult in Ceduna:
I might also add that Minister Rishworth was encouraged twice by a local member of parliament to contact me, because of my knowledge of the card, when she visited Ceduna, but, despite heavy prompting from our local member, no effort was made to contact me. I made sure I was available if the phone rang, and it didn't.
Kalgoorlie-Boulder Mayor John Bowler said he was disappointed the decision to scrap the card was made before the Assistant Minister for Social Services, Justine Elliot, had visited the Goldfields in August 2022.
It almost seems they [Labor] are putting the cart before the horse.
I would have liked for them to come here, consult with us, consult with the community, and then make a decision.
Coalition Senators call on the Government to thoroughly and appropriately consult with affected communities before proceeding with this legislation.
Benefits of the Cashless Debit Card Program
Income Management, both the Basics Card and the CDC, does not impact the amount of welfare received by recipients, it only changes the way in which people receive their payments. The CDC is an advanced technology that enables recipients to access their welfare payments using the universal banking platform. The Basics Card is a limited delivery mechanism.
CDC is an innovative program designed to tackle social harm, particularly associated with drug and alcohol addiction, in communities with high rates of long-term social security dependency.
Findings from an independent impact evaluation by the University of Adelaide released in 2021 reported that the Cashless Debit Card had helped recipients improve their lives and the lives of their families and other community members. Findings included:
25 per cent of people reported they are drinking less, since the Cashless Debit Card’s introduction.
21 per cent of Cashless Debit Card participants reported gambling less – and evidence found that cash previously used for gambling had been redirected to essentials such as food.
45 per cent of Cashless Debit Card participants reported the Cashless Debit Card had improved things for themselves and their family.
The study also showed that slightly more than half of interview respondents (and especially stakeholders) reported that they were in favour of the CDC continuing, albeit with certain improvements in various aspects.
There have been more than a dozen evaluations of income management, which have provided consistent evidence about welfare quarantining. The evaluations show decreases in drug and alcohol issues; decreases in crime, violence and antisocial behaviour; improvements in child health and wellbeing; improvements in financial management; and ongoing and even strengthened community support.
Labor’s backward step on income management
Coalition Senators condemn the Government for seeking to extend the Basics Card in the Northern Territory without consultation or transparency whilst at the same time seeking, through this legislation, to abolish the CDC.
Stakeholders consistently gave evidence that the CDC was a significantly superior mechanism for the delivery of income management. Recent data from the Department of Social Services reveals that 4,398 people (as at 5 August 2022) are currently voluntarily using the Cashless Debit Card in the Northern Territory. Under the proposed legislation these individuals will be forced to move back to the Basics Card. It is unclear how many of the 4,398 people the Government consulted and what their reactions where when told they would no longer have access to the Cashless Debit Card.
No evidence was given that any of these 4,398 people have been consulted. The Basics Card is an old form of technology with significant limitations, it basically operates as a pre-loaded gift card. Alternatively, the CDC program, offers participants a fully functional bank account, where they can make payments with direct debits and BPAY, and provides them with a Visa debit card for making day to day transactions. Participants can tap and pay and also use Apple and Google pay, should they choose.
Much of the discussion with witnesses in the hearings centred on the card technology. Witnesses that had experienced both forms of income management remarked on the improved experience with the CDC Visa debit card, specifically that it can be used at many more stores, across the country and online.
Given that the CDC utilises the universal VISA platform, it has moved with the developments in payment technology and upgrades have been enabled for card holders since the CDC’s inception.
Conversely, the Basics Card is a bespoke ‘closed loop’ system that is expensive to maintain and does not have the scale available to it to make it readily upgradable. The biggest drawback for the Basics Card is that merchants need to sign up with a merchant agreement and be vetted to accept Basics Card transactions, whereas merchants that ordinarily accept VISA transactions are able to commerce with CDC holders (except for designated restricted merchant categories such as liquor stores, pubs and casinos etc, as per the design of the program).
In most instances, the Basics Card requires the cashier to physically identify the card, resulting in slower processing of payments and with potential stigma for users. The experience with the CDC and the supporting technology is that this level of scrutiny is not required by cashiers and users experience a smoother shopping experience. Especially since the Indue branding has been removed from the card, and the transactions are seamless and unidentifiable unless restricted items are attempted to be purchased.
The CDC is accepted at around 1 million merchants nationwide, effectively anywhere that has an EFTPOS machine, where the Basics Card is only accepted at 15,500 stores. Importantly, it is not widely useable in many of the existing CDC sites.
Coalition Senator’s note section 5.23 in the committee’s majority report, which suggests that Government should investigate options to upgrade the functionality of the Basics Card system.
5.23 Without seeking to pre-empt the Government’s decision on the future of income management, the committee encourages the Department of Social Services and Services Australia to commence investigating avenues for upgrading the functionality of the Basics Card in the short term.
Coalition Senators contend that the most efficient and cost-effective way to upgrade the Basics Card would be to replace it with the CDC. The CDC, in effect, is an upgraded Basics Card. An upgrade to the Basics Card is akin to upgrading the horse and cart to a motor vehicle when the motor vehicle already exists.
The upgrades being sought are already available with the CDC platform which has improved significantly since its inception and could be made available by all Banks and financial institutions with minimal effort. It would not be possible to upgrade the Basics Card to the same level of functionality as the CDC.
The former Coalition Government formed the CDC technology working group which brought together the banks, retailers, the Department of Social Services and payment platform experts to investigate ways that the CDC platform could be improved.
Minderoo Foundation’s submission detailed the activity of the working group and discussed the advancements that were made, including the ability to have product level blocking, and multi card issuers – giving card holders the choice of provider, potentially including their preferred bank.
Some witnesses called for the card to be voluntary or targeted. The technology advancements already available would give the government the ability to provide a restricted account to cardholders regardless of their location and bank provider.
Given the limited operability of the Basics Card the Government must outline what supports will be required to transition the more than 4,300 people from the CDC to the Basics Card in the Northern Territory.
The Coalition Senators also note paragraphs 2.18 and 2.19 of the majority report, which highlights that the current Cashless Debit Card legislation is due to sunset on 31 December this year.
Therefore, the Government’s legislation appears to be nothing more than a political stunt.
Choice in banking
Repealing the CDC also effectively tears up the agreement the former Coalition Government signed with the Northern Territory’s community owned “Bank”, the Traditional Credit Union (TCU), which has been offering participants in the NT a choice between banking providers since December 2021.
The Traditional Credit Union is an Indigenous-owned Mutual Authorised Deposit-taking Institution with a track record of providing banking services designed to meet the needs of Indigenous Australians in regional and remote communities in the NT.
Income management participants who select to receive a CDC account through the TCU have access to Indigenous staff who speak Indigenous languages in branches in 12 remote communities, support centres in Katherine and Darwin and in their call centre.
The TCU is the only Indigenous owned credit union to offer the CDC.
The Committee heard testimony from the TCU and when asked if they had been contacted by the Minister prior to the decision being made to end the CDC as a mechanism to deliver Income Management, the response was “no”.
The TCU offers the CDC to their customers as a financial literacy tool, and despite that they are the only indigenous-led carrier of the card, they were not consulted prior to the decision being made to end the CDC as a financial literacy product in the NT.
The delivery of the CDC is also assisting the TCU to offer additional opportunities to deliver on its work in supporting Indigenous employment and training.
Labor’s decision to scrap the CDC scraps this choice.
Preserving the Queensland Family Responsibilities Commission Model
Coalition Senators urge the government to ensure the Family Responsibilities Commission (FRC) model is preserved.
While the majority report has included a brief mention about preserving the FRC model, Coalition Senators wish to reiterate that this unique model should be allowed to continue operating, using the CDC technology platform as has been requested by the FRC and the Cape York Institute.
Coalition Senators contend that the majority report recommendation regarding the FRC fails to take into account the concerns expressed by Mr Pearson. Mr Pearson was absolutely specific in stating that the CDC technology must be retained.
Zoe Ellerman, Strategic Advisor, Cape York Institute, said:
There wasn't any consultation around the abolition of the CDC prior to the decision being made…. [The FRC] is a very different model. That's obviously one of the points we really want to highlight. It is an empowerment model. Local commissioners are elders and respected persons of the community who are making decisions…. Those commissioners and the FRC are making case-management decisions—so they are using income management, along with other tools, to try and get people through the doors of the services.
…
So income management on its own is not a silver bullet; it is not the solution. But in a more holistic model it absolutely can be a vital cog, and that's what we're really keen to talk to the government about.
Absence of alternatives
Coalition Senators are of the view that the Labor Government’s reckless legislation to scrap the Cashless Debit Card in the absence of any tangible forward plans will put vulnerable communities at significant risk.
The future of income management in current trial sites is also extremely unclear, with little or no current support to ensure that impacted communities will be receiving the appropriate and timely support as required once the CDC is repealed.
There is also a lack of any substantive measures to identify individuals at risk or in hardship to ensure that they have access to referrals for social work support or financial counselling services.
The Government clearly supports the continuation of compulsory income management and the Minister has received advice on this matter as revealed by the Department of Social Services evidence during the public hearing in Canberra.
Senator RUSTON: Thanks. Can you advise when the income management arrangements in the Northern Territory are due to sunset?
Ms Hefren-Webb: The income management legislation is enduring, but there are legislative instruments that underpin that legislation, some of which sunset in October 2022. I might ask Mr Boneham to speak to the exact date.
Senator RUSTON: I’ll be more keen to know which instruments those are and to whom they apply.
Ms Hefren-Webb: We can run through those instruments.
Mr Boneham: There are six determinations which are due to lapse on 1 October this year. One of those is in the Northern Territory.
Senator RUSTON: How many people does that particular instrument cover?
Mr Boneham: That would cover all of the Northern Territory, which I believe is around 22,000 to 23,000 people.
Senator RUSTON: I was just wondering whether there has been any advice as to whether that instrument should be extended.
Ms Hefren-Webb: Yes, we have provided advice to the minister on that.
Senator RUSTON: Could you maybe run me through what would be required for that instrument to be extended so it does not sunset on 1 October and what action would need to be taken.
Mr Boneham: They would need to either be remade or have the sunset date deferred.
Senator RUSTON: What’s the process of deferring the sunset date?
Mr Boneham: Deferring the sunset date would require the permission of the Attorney-General.
This evidence clearly demonstrates that the Government has a secret plan for the extension of income management, via the Basics Card, and are not being transparent with the public regarding what the future of this program will be.
Coalition Senators call on the Government to commit to using the CDC as an effective mechanism to deliver income management in the future.
Coalition Senators condemn the Government for extending the Basics Card, and at the same time abolishing the Cashless Debit Card which will impact the most vulnerable Australians.
Coalition Senators call on the Government to provide details of the supports being provided to people affected by this Bill and a transparent breakdown of the costs associated with the abolition of the CDC.
Coalition Senators urge the Albanese Government to not waste the investment made into the CDC platform, but instead call on the Government to work with the technology working group to further advance the payment platform to better meet the needs of income management participants.
Conclusion
Coalition Senators call on the Albanese Government to abandon its decision to irresponsibly and without consultation abolish an initiative that has demonstrably delivered better lives and more meaningful outcomes for thousands of Australians.
Coalition Senators have real concerns that if this Bill is passed, especially in the absence of any substantive alternative measures of support, it will lead to adverse outcomes for those communities that are most vulnerable.
Recommendation
Coalition Senators recommend that the Government accepts that the Cashless Debit Card is superior technology to the Basics Card.
Recommendation
Coalition Senators recommend that existing arrangements remain in place until such time that all future income management changes are properly consulted.
Recommendation
Coalition Senators recommend that the Social Security (Administration) Amendment (Repeal of Cashless Debit Card and Other Measures) Bill 2022 not be passed.
Senator Slade BrockmanSenator Jacinta Nampijinpa Price
Senator the Hon Anne RustonSenator Wendy Askew
Senator Matt O’Sullivan