The Cashless Debit Card should disappear, but what about the BasicsCard? – Monash lens


In July 2022, the federal Labor government introduced legislation to repeal the cashless debit card, one of two forms of revenue management (IM) currently applied at several locations across Australia.

This bill (known as the Social Security (Administration) Amendment Bill (Repeal of Cashless Debit Card and Other Measures) 2022) is actually be the subject of an investigation by the Senate Committee on Community Affairs Legislationwho will report to Parliament at the end of August.

To date, the inquiry has received 77 written submissions and conducted four major public hearings, suggesting continued ideological division and polarization regarding the merits or limits of revenue management.

Income management is one of the existing forms of social assistance conditionality applied by Australian governments under which disadvantaged individuals and communities (usually those dependent on income support payments) are required to change their behavior or attitudes in order to demonstrate that they deserve to remain eligible for a payment or service.

Other existing conditional programs include Work for the Dole and ParentsNext.

But IM is unique in that a set percentage of their payments – usually between 50% and 80% – are quarantined in a special account which can only be used to purchase essential household goods such as food, rent, clothing, education expenses and energy bills.

Its stated intent is to discourage the expenditure of drugs, alcohol, and gambling, and in doing so, reduce the manifestations of socially harmful behaviors such as violence (especially domestic violence) and child abuse and neglect. .

The rationale for revenue management is closely tied to the neoliberal philosophy that disadvantage is assumed to be the direct result of wrongful individual actions, rather than related to a larger structural or community context.

IM was originally introduced in 2007, as part of the Howard Coalition Government’s Northern Territory Emergency Response (NTER) targeting remote indigenous communities. It was later extended by the Labor Party and Liberal-National Party coalition governments to a wider range of groups and locations.

The 2007-2013 Labor Government continued the existing revenue management scheme in the Northern Territory and also extended the scheme to sites such as Shepparton in rural Victoria and Playford in Adelaide.

Most of the participants were placed on the Base map, a debit card protected by a personal identification number, which could only be used in authorized stores. The subsequent coalition government, led by Tony Abbott, introduced the even more interventionist Cashless Debit Card (CDC) – a visa debit card – in 2015, based on recommendations from mining tycoon Andrew Forrest’s government-commissioned Indigenous employment and training review.

Currently, around 42,000 Australians participate in instant messaging programs, which primarily target those receiving working-age payments such as JobSeeker and Parenting Payment.

There are almost 18,000 on the CDC, which is based in six locations – the Ceduna region of South Australia, the East Kimberley and Goldsfield regions of Western Australia, the Bundaberg region and Hervey Bay ( Hinkler) in Queensland, the Northern Territory and the Cape York region in Far North Queensland.

A CDC Indue Card

The CDC is operated by two private card providers (Indue Ltd and the traditional credit union) and controls 80% of participant revenue in the first four locations, but has been changed to 50% in the Northern Territories and a negotiated percentage in Cape York.

There are also more than 24,000 on the BasicsCard, which controls 50% of participants’ earnings, more than 22,000 of whom reside in the Northern Territory.

An important majority of BasicsCard participants are Aboriginal and Torres Strait Islander (hereafter Indigenous), and Aboriginal Australians also make up almost half of CDC beneficiaries.

IM programs have been evaluated by multiple government-commissioned reports, parliamentary inquiries and independent research studies.

Australian governments have consistently asserted that IM not only reduces dysfunctional behaviors that cause social harm, but also improves beneficial outcomes for participants in areas such as financial management, parenting ability and access to job training. and employment.

But the research results show only limited verifiable evidence of benefits for program participants. The results are, at best, mixed.

Some IM users have made progress in areas such as parenting ability, financial management and labor force participation, but others have not.

Some seem to have become more, rather than less, dependent on social support services and programs. For those who appear to have gained some benefit, it is often difficult to separate the impact of IM from the influence of other health, education and social service programs.

There does not appear to be a substantiated link between participation in IM programs and greater inclusion in the economy and community at large.

Additionally, there have been substantial criticisms of the IM from many community (and particularly indigenous) groups within the respective sites. Their main concerns can be summarized as follows:

High administrative costs

Governments are estimated to have spent more than $170 million funding CDC programs alone, including $36 million in 2020-21. This appears to be a very expensive program given that it only targets a small percentage of income support recipients and appears to have limited utility in meeting their needs or improving their life chances.

Indeed, a cost-benefit analysis conducted for the Department of Social Services in 2021 reported that the CDC’s costs outweighed the benefits by a ratio of six to one.

Arguably, these funds would be used more effectively to establish holistic social support services that would directly address the underlying causes of social disadvantage in targeted locations.

Hidden social costs

Second, the CDC has major hidden social costs for participants. One of the main reasons for this is that the program is applied as a blanket measure to entire communities or groups of people receiving income support payments, including many people who have never had drugs, alcohol or gambling, rather than targeting these people. with verified concerns.

Consequently, many IM participants experience a sense of social shame and stigma due to the public perception that only drug and alcohol users and “unemployed bludgers” are placed on IM. .

Associated costs include personal stress and anxiety based on fear that the card will not work, logistical failures including additional bank charges which can lead directly to financial hardship, and general erosion of personal agency and of choice given the limitations of using cash to buy necessities. elements. Overall, IM participants seem to feel more, rather than less, excluded from traditional community and social activities.

Discrimination against Indigenous Australians

The disproportionate representation of Indigenous Australians as participants in IM is claimed to imply a form of racial discrimination and ongoing colonialism aimed at controlling and weakening communities and violating their human rights.

The CDC does not appear to favor the self-determination of indigenous communities make their own decisions and appears inconsistent with the principles of partnership included in the national Closing the Gap agreement negotiated by the federal government with Indigenous community leaders.

Inability to address social disadvantage

Fourth, the CDC is paralyzing and fails to address the root causes of social disadvantage. The CDC does not address the root causes of gambling or substance use, both of which have deep structural and historical causes such as the impact of intergenerational disadvantage, colonization, trauma, and racism.

Instead, funding should arguably be shifted to key local health and social support programs targeting domestic violence, elder abuse, mental health, parenting skills, financial counseling, availability affordable housing, withdrawal services for people with addictions, as well as education and employment. skills and training.

Another top priority is to increase the JobSeeker benefit rate for the unemployed so that their income is above the poverty line.

A failure in consultation

Finally, the CDC was not co-designed with the affected communities and participants. Coalition governments insisted that the CDC (unlike the BasicsCard) be introduced through a bottom-up partnership with communities and local leaders (including indigenous community organizations).

But that’s not what happened. Instead, the government designed the map as a result of Andrew Forrest’s investigation, then offered it on a take-it-or-leave-it basis to local governments and Indigenous leaders in certain places who were not necessarily representative of these communities.

There were no co-design consultations with key local stakeholders (especially drawing on the lived experience of service users and their families, or the local expertise of service providers and other key community groups) to identify key social needs and their views on best practices. and policy responses. The CDC certainly did not empower the targeted communities to determine their own policy directions.

Where to go from here?

The the existing invoice is only for CDC participants and sites, but makes no reference to the more than 24,000 BasicsCard participants across multiple sites.

It appears the government is planning to consult with community groups and leaders at each CDC site and then make a decision on whether or not some form of instant messaging will continuepossibly on a community or voluntary basis.

It would probably be much better if the government started again by consulting with key stakeholders from all CDC and BasicsCard sites. A true co-design partnership with local communities could inform a cost-effective program that addresses key social issues and needs based on real evidence of what works.


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