The Morrison government plans to make the cards permanent in existing trial sites and move welfare recipients in the Northern Territory and the Cape York onto the system.
The cards freezes up to 80 per cent of Centrelink payments so money can only be spent on what the government deems essential.
It prohibits people from spending money on alcohol, drugs and gambling.
Taxpayers are not allowed to know how much making the cards permanent will cost as it’s considered a commercial deal.
Almost 25,000 welfare recipients in the NT and Cape York would be shifted onto the cards under the changes.
Welfare recipients in South Australia’s Ceduna region, the East Kimberley and Goldfields in Western Australia, and Bundaberg and Hervey Bay in Queensland, would also be permanently lumped with the cards.
A Senate inquiry probing the enabling legislation has heard from academics, charities and Indigenous groups.
Anti-card campaigner Kathryn Wilkes said the system was cruel and demeaning.
She told senators the scheme – which limits most welfare spending – had caused stress and mental anguish.
“This program is not worth the human cost,” Wilkes said on Thursday.
Senators also heard about issues with rent and childcare payments not being cleared on time.
Fellow campaigner Amanda Smith said the government was legislating segregation.
“Whatever the government wants to label what they’re doing, they’re creating and investing in a system of permanent social and economic apartheid,” she said.
Aboriginal Peak Organisations Northern Territory chief John Paterson said the public money earmarked for making the card permanent would be better spent on Indigenous housing, education and health.
“We want to get people off the welfare treadmill, we want to create jobs,” he said.
His colleague Theresa Roe said the cards have not been properly evaluated in test sites, yet the government was rushing to make it permanent.
“We want to know where the evidence is.”
Social Services Minister Anne Ruston has not received an evaluation of the debit cards by the University of Adelaide, but wants the bill to pass by the end of the year.
Tony Dreise from the Australian National University says more evidence is needed to prove the plan is necessary.
“When you have a program of this magnitude – not only in financial terms, somewhere around $80 million, but impacting thousands of people and their lives – then it would be reasonable in 2020 to be looking for a strong evidence base to underpin this bill,” he said.
“We aren’t seeing it.”
Businessman Andrew Forrest’s Minderoo Foundation argues the cashless welfare cards have had a positive impact on Indigenous communities.
He believes the system should be extended to all youth allowance recipients.
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