Coalition move could lift the proportion of recipients’ welfare that is quarantined from 50% to 80%

This article is more than 1 year old

This article is more than 1 year old

The Greens have blasted the Coalition’s decision to extend the cashless welfare card to every person on income management in the Northern Territory, potentially lifting the proportion of recipients’ welfare that will be quarantined.

On Monday the family and social services minister, Paul Fletcher, announced that from January 2020 nearly 22,500 people on income management will move from the BasicsCard to the cashless debit card.

The BasicsCard quarantines 50% of recipients’ welfare for use at selected stores, compared with 80% for people on the cashless debit card.

The government has said existing participants will stay with only half their welfare quarantined “unless the community requests a higher percentage through consultations” but the Greens believe this opens the door to imposing harsher limits on the whole community.

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The Greens family and community services spokeswoman, Rachel Siewert, said the plan was “very dubious” because the government has a track record of “going to chosen community leaders” to justify a community-wide rollout despite opposition and differences of opinion.

“That’s my concern, it’s a step towards them lifting the proportion quarantined,” Siewert told Guardian Australia. “And new people will possibly go [onto the cashless card] at the higher level.”

The government argues the cards lead to a reduction in violence and harm related to alcohol consumption, illegal drug use and gambling but critics say they cause stigma and make it harder for people on low incomes to buy second-hand goods and services in the cash economy.

A total of $129m will be spent on changes to the cashless debit card, which include the ability for recipients to earn interest and new technology to automatically decline transactions if the purchase includes restricted items such as alcohol or gambling products.

The changes require legislation, and are therefore unlikely to occur before the election and could be blocked by the Senate.

The government has also committed to funding the existing four trial sites (Bundaberg and Hervey Bay, Ceduna, Goldfields and East Kimberley) for a further year to 30 June 2021.

Siewert said the government had “defied logic and displayed contempt for both experts and people on income support” by extending the cashless debit card, which she said “simply does not work”.

In July the Australian National Audit Office review found there were major flaws in departmental evaluations of the program and said it was “difficult to conclude” where social harm had been reduced due to a “lack of robustness in data collection”.

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Siewert said the announcement is “is putting people through hell in a social experiment that has no end in sight”. “And let’s be clear, these are no longer trials, they’ve been going for far too long.

“Not content with punishing people in the NT with the current form of income management they are going to make things even worse.”

The Labor social services spokeswoman, Linda Burney, said the policy was a “cynical pre-election” move to “demonise social security recipients, the overwhelming majority of whom use their payments in a responsible way”.

“Labor has always opposed a national rollout of the Cashless Debit Card and we do not support the expansion of the card to additional sites without informed community consent,” she said.

“We supported the initial trial sites in Ceduna and the East Kimberly to give the government the opportunity to see if the cashless debit card would work, but there isn’t any evidence of the card’s success.”

Fletcher said the cashless debit card “helps Australians exercise personal responsibility to improve their lives and their communities”.

“Unlike Labor and the Greens our Liberal National government is committed to the principle of mutual obligation – and we believe the cashless debit card is an effective way of supporting Australians on welfare to have more control of their lives,” he said.

“The cashless debit card offers a more streamlined approach to welfare quarantining and benefits to taxpayers, with operational costs of well under $1,000 per head in the most recent expansion site.”