Senate inquiry hears competing views on the card from Aboriginal corporations in the Northern Territory

This article is more than 1 year old

This article is more than 1 year old

Labor will oppose a government push to expand the controversial cashless welfare card and extend existing trial sites, saying it will only support income management if the scheme is made voluntary.

Labor’s hardening opposition to the card, which it initially supported in trial communities, comes as the Northern Territory’s peak body for Aboriginal organisations likened the “unwarranted haste” of the cashless debit card push in the territory to the “disastrous and ill advised imposition” of the 2007 intervention.

As part of the Coalition’s revived “compassionate conservative” welfare agenda, the government has introduced legislation to expand the card to Cape York and the NT, where it will replace the basics card, and extend existing sites in Ceduna in South Australia, the East Kimberley and Goldfields in Western Australia, and Bundaberg and Hervey Bay in Queensland.

'A horrible weight on my shoulders': the fury fuelling the robodebt class action Read more

Without an extension being granted by parliament, the existing trial sites are due to expire in June next year.

Under the scheme that has been operating since 2016, up to 80% of a person’s welfare is quarantined to a bank card that cannot be spent on alcohol or gambling, but the new legislation allows the minister to restrict 100% of payments in some circumstances.

Labor’s shadow minister for families and social services, Linda Burney, said the opposition would propose two amendments to the legislation, one to make the program voluntary and a second to ensure a proper and independent inquiry into the effectiveness of the card.

But unless the government agrees to make the card optional for welfare recipients, Labor will vote against it.

“The amendments Labor will propose directly address concerns raised by the government itself in relation to the ineffectiveness of indiscriminate compulsory income management like the cashless debit card,” Burney said.

“People have raised with us serious questions about the card.

“We are not against the card when it is voluntary, or when properly targeted in instances such as family violence and child protection.”

Facebook Twitter Pinterest Linda Burney says Labor not is against the card when it is voluntary, or when properly targeted in instances such as family violence and child protection. Photograph: Danny Casey/AAP

Labor’s opposition to the card’s expansion comes as John Paterson, the chief executive of the Aboriginal Peak Organisations Northern Territory, told a Senate hearing in Darwin on Monday that the roll-out would not work.

“The unwarranted haste of imposing the cashless welfare card on our communities recalls for us the disastrous and ill advised imposition of the intervention,” Paterson said.

“It is evident that income management has failed, yet the government is intent on continuing to try to further coerce us into change by further extending the policy. It simply will not work,” added Paterson, who also leads the Aboriginal Medical Services Alliance Northern Territory.

The inquiry also heard competing views on the card from a number of Aboriginal corporations.

Robert Totten, a manager at the Maningrida Progress Association, said about 50% of its turnover at its retailers and other businesses came from the basics card.

He said the card had improved “the wellbeing of families”.

But Liam Flanagan, the general manager of community services at the Arnhem Land Progress Aboriginal Corporation, said income management had brought shame and hopelessness.

The Human Rights Law Centre senior solicitor Adrianne Walters said the bill allowed the government to increase the rate of welfare quarantining for people on the cashless debit card to 100% without new legislation. She said this provision handed too much power to the minister.

But Coalition senators told the hearing that the rate of quarantining would only change if the community requested it.

Without the support of Labor and the Greens, the government will need to secure the support of four Senate crossbenchers for the expansion to come into effect.

The Centre Alliance MP Rebekha Sharkie and Tasmanian senator Jacqui Lambie will travel to Ceduna this weekend to talk to participants on the ground about the card before declaring their final position.

Both Lambie and Centre Alliance – which was formerly known as the Nick Xenophon Team – have previously supported the welfare quarantining trials.

But Sharkie, the welfare spokesperson for Centre Alliance which controls two Senate votes, told Guardian Australia she was unlikely to support the card before new analysis of the program promised by the government was released.

“I am pretty reluctant to do more with the cashless debit card until we know whether it is working,” Sharkie said.

She also said she was concerned that the legislation could include a “back door” that might allow the government to roll the card out nationwide.

While Lambie is broadly in favour of the cashless debit card, a spokeswoman for the Tasmanian senator said she did not support a nationwide roll-out and thought “tweaks” to how the card operated were needed.

Eat that, povvos: Scott Morrison's 'compassionate conservatism' is stale and dangerous | Van Badham Read more

A spokeswoman for the social services minister, Anne Ruston, said the government was committed to finding the best ways to support people, families and communities in places where high levels of welfare dependence co-exist with high levels of social harm.

“That is why we are seeking parliamentary approval to extend the existing trials until 30 June 2021 and to transition the 23,000 Australians on the basics card in the NT and Cape York to the cashless debit card,” she said.

“The cashless debit card provides greater consumer choice and autonomy while reducing red tape for businesses because the vast majority with Eftpos facilities can automatically accept the card.

“For these reasons the Government encourages Labor to support the bill as it was introduced to the House.”

A government-commissioned report released last year found the card had been effective in “reducing alcohol consumption and gambling” in Ceduna and the East Kimberley, with almost half of people who identified themselves as gamblers doing so less.

Among drug takers, 48% self-reported using illegal drugs less often.

But despite some positive improvements, only 17% reported feeling their lives were better as a result of the card, and 24% of parents reported their children’s lives were actually worse.