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Issue #1903      February 17, 2020

Abolish the Cashless Debit Card: Raise the Rate

The Newstart allowance for the unemployed remains at a miserly $40 a day with no increase for twenty-six years. The government has shifted many people from sickness and single parent payments onto much lower Newstart payments. To add insult to injury the government has plans to roll out its punitive income management scheme for Newstart recipients nationally.

The sum of $40 is disgusting and inhumane, in particular for such a rich country as Australia. Our so-called Christian Prime Minister has no heart, treats the vulnerable and disadvantaged with contempt, as it does workers. It damns the unemployed to a life of poverty, homelessness if they do not have family to live with, and removes any sense of dignity.

According to the Australian Unemployed Workers Union (AUWU), in Australia there are eleven job seekers per job vacancy (sixteen if you include the underemployed) and the average duration of unemployment now at more than four years! Amongst those unemployed are many youths and women over fifty-five years of age.

On $40 a day it is impossible to buy clothes for an interview or pay for travel in a futile hunt for work, let alone pay rent or pay electricity bills and put food on the table.

The injustices meted out to the unemployed are in sharp contrast to the income tax cuts for the wealthy, the multi-billion dollar corporate tax cuts, the annual $38 billion or more spend on US war plans, the billions of dollars spent subsidising the fossil fuel sector and private hospitals.

The unemployed do not benefit from tax cuts and cannot afford private hospitals. But starving the unemployed, carers, people with disabilities, age pensioners, single parents, and those on sickness benefits does free up more dollars for future corporate tax cuts. That is one of the aims of the ongoing cuts to social security payments.

Income Control

The Basics Card was introduced in 2007 by the Howard government as part of the Northern Territory Intervention. It quarantined fifty per cent of Newstart payments that could only be spent using a special card at approved stores and could not be used to purchase alcohol, cigarettes, pornography, or to gamble or withdraw cash.

The attempt to stigmatise the unemployment went as far as having a separate, dedicated aisle for the use of the card, ensuring everyone around knew they were unemployed.

In 2014, the Abbott government commissioned an inquiry into Indigenous employment. It was headed by billionaire mining magnate Andrew Forrest. Forrest recommended a mandatory Healthy Welfare Card for the unemployed, carers, people with disabilities and single parents. This card would be 100 per cent cashless with welfare recipients having no access to cash and restrictions on what they could purchase.

In 2015, the Coalition and Labor supported a bill for trialling such a card, called the Cashless Debit Card (CDC), but with eighty per cent of income quarantined. The Australian Greens opposed the card.

Trials began in Ceduna in South Australia, the East Kimberly and Goldfields regions of Western Australia, and in the Bundaberg and Hervey Bay regions in Queensland. There is little evidence of the behavioural change that the government claimed would result. On the contrary the card has resulted in an increase in crime and for its users, humiliation and stigma when they shop.

These income management schemes made life more difficult and expensive, denying recipients the possibility of shopping in garage sales, or in second hand and cheaper stores.

If the Income Management to Cashless Debit Card Transition Bill 2019, currently before Parliament, is passed then those on the Basics Card will be transferred to the CDC and the scheme will be extended across the Northern Territory and Cape York.

The CDC quarantines eighty per cent of income, not fifty per cent, but the card can be used more widely, in stores with Eftpos facilities. This is where the Big Four Banks, Coles, and Woolworths are set to make a mint once the technology is sorted. Bank involvement adds to the cost of Newstart payments, sapping up money that would be better spent on welfare payments.

“It is discriminatory and disproportionately impacts First Nations Australians. Eighty per cent of the people on income management in the Northern Territory are Aboriginal and Torres Strait Islander people. Twelve years after the intervention, there is no clear empirical evidence that broad based mandatory income management has worked. Communities have not been consulted,” Labor MP Linda Burney said in her Second Reading Speech.

Cruel Waste of Money

The costs of the CDC scheme run into millions of dollars. The trials have cost an estimated $10,000 per person with more than half of this money going to a private company, Indue, the private company contracted to cover all operational aspects of the cashless debit card. (St Vincent de Paul Society, “Policy Briefing: Cashless Debit Card,” vinnies.org.au) This money would be better spent on an increase in the Newstart Allowance.

“This Card is a nasty invasion of privacy. It’s unnecessary, expensive, stigmatising and impractical, making it harder for people to buy from op-shops, buy second-hand furniture, rent in shared accommodation or to provide children with money for school activities,” Australian Council for Social Service CEO Cassandra Goldie said. (acoss.org.au)

“Instead of forcing people on to stigmatising Cashless Debit Cards, we need our political leaders to act to increase Newstart and to improve employment services to help people get paid work,” Goldie added.

But the government shows no interest in job creation programs, funding TAFE and raising the payments for students, the unemployed and the youth allowance. Quite the opposite. It continues along its line of punitive measures as if it is the behaviour of undeserving welfare recipients that is to blame.

The government plans to expand the card nationally and to apply it to other forms of payments, as proposed in Forrest’s report. Local governments and the Northern Territory government, health service providers and Indigenous community organisations have spoken out strongly against the proposed Cashless Card plans.

Labor plans to move an amendment in the Senate for the Cashless Debit Card to be voluntary.

Warren Snowdon, the Member for Lingiari in the Northern Territory, pointed out that there was no consultation on the CDC. “The public servants acknowledged that there’s been no consultation about whether the BasicsCard should be transitioned to the CDC. There was no consultation and no discussion. Then they went on to affirm that there would not be: ‘Listen, old son: don’t expect us to come and ask you if you want it. You’re going to get it, regardless of what you think and regardless of your experience with income management under the BasicsCard, because we simply don’t care’.”

And the government doesn’t care about the unemployed or anyone else who turns to the state for income support – hence the withering away of the social security system and stigmatisation of recipients. Former Treasurer Joe Hockey described it as “lifters” and “leaners,” and his government was not there to assist the “leaners.”

Broader Agenda

“It does need to have a broader application than perhaps the social harm reduction that the original policy was designed on,” Social Security Minister Anne Ruston said in reference to the CDC.

It certainly has broader objectives, although the Minister is highly unlikely to come clean about these.

“Expanding the card to more communities will simply increase the wealth of private entities like Indue and the overall cost of social security provision – and yet without providing benefits for the individuals and communities affected.” (St Vincent de Paul Society)

The CDC is part of a package of punitive measures to cut social security, including a drug-testing trial for income support recipients, longer payment waiting periods, and increased activity requirements and non-compliance penalties for unemployed people. Such policies push people further into poverty and serve to strip recipients of their dignity and agency.

“This puts the blame for unemployment on those who are the victims of a system that is not currently producing enough jobs for everyone. Rather than blaming unemployed people, governments need to work with the community and the unemployed to create more paid work and genuine pathways to employment,” the St Vincent de Paul Society said.

Defeat the Bill

This bill and other punitive measures before Parliament cover up the failings of the government to provide adequate income support, affordable public housing. It also diverts attention from the inadequate funding of public education and health services and lack of job opportunities and appropriate training.

The CDC bill is expected to come before Parliament in the coming weeks. There is little time left to lobby Senators to ensure its defeat.

Next article – Morrison threatens sick leave and job security

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