Thousands of Aboriginal people will be disproportionately affected if the Federal Government expands its cashless welfare card into the Northern Territory, a Senate committee has heard.

Key points: The Coalition has proposed the introduction of the cashless welfare card in Northern Territory from April 2020

The Coalition has proposed the introduction of the cashless welfare card in Northern Territory from April 2020 Aboriginal-controlled community organisations have been scathing of the move, labelling it oppressive and like being 'fed by rations'

Aboriginal-controlled community organisations have been scathing of the move, labelling it oppressive and like being 'fed by rations' Previous studies into the trial sites have been ineffective at determining any reduction in social harm due to missing and mismatching data

Opinions were divided and people, at times, clashed over the proposed roll-out of the initiative, as the Community Affairs Legislation Committee met in Alice Springs on Thursday and heard from a raft of witnesses.

Ngaanyatjarra, Pitjantjatjara, Yankunytjatjara (NPY) Women's Council chairperson Maimie Butler said the move could be devastating for remote communities.

"If this card does comes along, it'll take us right back to when our ancestors first walked into the missions and been fed by rations. That's how it will be," she said.

"If we do, you know, if we do get on this card, our little ones, our grandchildren and our other families, our families, extended families, we know, we always put our hands in the pocket and got $1 out and give it to them. That'll be gone, the card will just put it right out.

"We got no big money in the bank, we are the poorest people on the earth and you're still attacking us."

Almost 22,000 Territorians are on the Basics Card. ( ABC News: Emilia Terzon )

The card, which in its current form quarantines 80 per cent of welfare payments, has been trialled in Ceduna in South Australia, the East Kimberly and Goldfields regions of Western Australia and in the Bundaberg and Hervey Bay regions in Queensland.

The Federal Government is proposing to introduce the compulsory welfare card across the Northern Territory and Cape York, adding over 20,000 people to the scheme from April 2020.

Possible 30 per cent increase in quarantined income

The Territory has had varying forms of income management for over a decade, with the Basics Card being introduced in 2007 under the Howard government's NT intervention.

The Basics Card quarantines 50 per cent of recipients' welfare for use at approved stores, compared with 80 per cent on the newer cashless debit card.

Up to 80 per cent of a person's welfare payment can be placed on this card, where it cannot be spent on alcohol or gaming. ( ABC News: Nick Haggarty )

Northern Territory National Emergency Response, known as the intervention, required the suspension of the Racial Discrimination Act 1975 so that it could specifically target and quarantine the income of all Aboriginal and Torres Strait Islander people on welfare in the Territory.

In 2010 a new income management program was introduced, which reinstated the Racial Discrimination Act and included non-Indigenous people.

Federal Government data from March 2018 showed that of the 25,270 people on income management nationally, around 87 per cent were in the NT and 82 per cent of those people were Indigenous.

No hearings in remote communities

Plans to roll out the trials of the new cashless debit card into the Territory has raised alarm bells and received strong objections from across local and NT governments, health service providers and Indigenous community-controlled organisations.

Northern Territory Council of Social Service chief executive Deborah Di Natale said the council's members strongly opposed the scheme.

"The proposed cashless debit card unfairly targets Aboriginal and Torres Strait Islander people," she said.

"They have not engaged in meaningful consultation … there have been no hearings held in Aboriginal communities."

Remote NT communities like Santa Teresa in central Australia, pictured here, have been subject to income management since 2007. ( ABC News: Greg Nelson )

Ms Di Natale said there was not enough evidence to support the initiative and that the proposed legislation removed current safeguards.

"There is no evidence to indicate that income management in itself facilitates long-term behavioural change and, rather than building capacity, it made them more dependent on government," she said.

"It is the government absolutely and utterly not supporting self-determination and agency in Aboriginal communities.

"Another issue is that the minister can now alter the payments with the ability to increase it up to a quarantine of 100 per cent with limited parliamentary scrutiny."

But others have said that it had "turned lives around" and Prime Minister Scott Morrison has previously defended the trials.

Cashless card trial 'extremely successful'

The former mayor of a South Australian town, where the card has been trialled, said it had been life-changing.

"It's been extremely successful, it has turned lives around," said Allan Suter.

Allan Suter, former mayor of Ceduna, said the card was life-changing. ( ABC News: Natalie Whiting )

"We have now seen children go to school with food, having had meals at home.

"We have also seen significant improvements in the lives of many of the people who were really suffering because their available funds were going into feeding an addiction."

There was research conducted into the Ceduna trial, as well as other regions, but the Australian National Audit Office found issues with the data collection and said in a report in July last year it was "difficult to conclude" if there had been any reduction in social harm.

Mr Suter said the trail was only initially supported by the council on the basis that it was "totally non-discriminatory" and they had tried other measures unsuccessfully in the past.

"We did try the Basics Card," he said.

"It didn't work very well and was too restrictive about where you could purchase things. We ended up withdrawing our support for the cashless Basics Card; whereas the Cashless Welfare Card is a totally different ball game."

Constituents of the NPY Women's Council have raised several concerns about government-driven income management. ( Supplied: NPY Women's Council )

NPY Women's Council chief executive Liza Balmer said there had been overwhelming support for voluntary income management in the past but that there were multiple issues at play.

"Our primary concern is the mandatory nature of this," she said.

"This card is an attempt to address some really fundamental issues in Aboriginal communities, but what it doesn't address is the level of poverty.

"No matter what kind of income management you put people on, at the end of the day they are still living well and truly below the poverty line on the Newstart allowance."