Labor will consider whether or not to support the trial of cashless welfare debit cards after legislation was introduced into the House of Representatives on Wednesday.

The bill would allow the government to put 80% of a welfare recipient’s dole money into a special account that can only be accessed via debit card. The cards can not be used for gambling or to buy liquor.

The card represents a “radical new positive approach to the distribution of welfare”, Alan Tudge, parliamentary secretary to the prime minister, said.

“The main objective of the card is to address the very serious welfare-fuelled alcohol, drug and gambling abuse, [which] as you’d be aware is rife in some communities,” Tudge told reporters. “We hope it will have a serious impact on those issues.”

The bill introduced on Wednesday would allow for the card to be trialled in three separate locations, affecting up to 10,000 people.

Ceduna, on the south-western coast of South Australia, is the only town to have formally signed on to the trial, but the government is in “advanced negotiations” with the eastern Kimberley region in Western Australia to follow suit.

Government numbers in the House mean that the bill will pass in that chamber, but it may run into trouble in the Senate, where the government does not have a majority.

The Greens have already rejected the card, initially suggested by mining magnate Andrew Forrest following a review he conducted into Indigenous employment.

“It is incomprehensible that a paternalistic thought bubble by a billionaire could materialise with the support of the Labor party, rolling out as early as next year,” the Greens’ spokeswoman on welfare, Rachel Siewert, said.

“Limiting access to cash will severely restrict the ability to budget and decision-making. Whether it be at the markets, lunch money for their kids, or a bus fare – all these things add up and may not be available via card payment.”

But Labor is leaving its options open.

“We are yet to see all the details of the proposed trial, including the support services that will be provided,” the shadow families minister, Jenny Macklin, said. “When we do, Labor will consider the legislation and details of the proposed support services carefully.”

“We will also talk further with the affected communities and listen to their concerns,” she said.

Tudge said he was pleased by the “constructive discussions” he had had with Labor and Senate crossbenchers.

Siewert argued that income management had not worked in the past, but Tudge said that the card offered “complete freedom”, apart from restrictions on gambling and liquor.

“This proposal is not income management. There will be no compulsion for anyone to spend their payments in a particular way, although of course people will be encouraged to establish a budget,” he said.



Tudge pointed to the fact that Ceduna has a rate of hospitalisation from assault that is 68 times that of the wider community, largely due to alcohol abuse.

“We hope that this card will have a dramatic impact on statistics like that,” he said.