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Govt won't reveal cost of permanent Centrelink cashless welfare card

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The federal government is refusing to reveal the cost of running a permanent, expanded Centrelink cashless debit card scheme  – despite a trial in which the private card operator was paid up to $10,000 in taxpayer funding to manage each card of welfare recipients receiving less than $15,000 a year before the pandemic.

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Neither the Federal Government nor cashless welfare card operator Indue will say how much Australians will be forced to fork out to make the cashless welfare scheme permanent, citing commercial in confidence and the potential to impact future procurement activities.

But the Australian Council of Social Services has previously estimated the initial trials cost taxpayers $18.9 million, of which just under $10 million went to Indue, which was paid an estimated $10,000 to manage the card of each welfare recipient under the scheme. Before the coronavirus supplement increased payments, JobSeeker, previously known as Newstart, paid $565.70 a fortnight or $14,708 a year.

The cards freeze up to 80 per cent of low-income recipients’ payments so that money can be spent on what the government deems essential, and prohibits spending  on alcohol, drugs and gambling.

Businessman Andrew Forrest initially developed the scheme as part of a 2014 review of Indigenous jobs and training.

The Federal Government has since introduced cashless debit card trials in the South Australian west coast town of Ceduna as well as East Kimberley and Goldfields areas of Western Australia, and Hervey Bay and Bundaberg in Queensland.

A further 25,000 people in the Northern Territory and Cape York would be expected to move onto the program if the bill becomes legislation.

The Canberra Times reported the Government had set aside $17.5 million for that aspect of the scheme but the total number of welfare recipients who would be pushed onto the card remained unclear.

The trials are currently due to expire in December but under the Social Security Amendment Bill, which is currently before parliament, the cards would be ongoing.

Greens Senator Rachel Siewert said with an influx of new people on low-income payments in trial areas as a result of the economic impacts of the coronavirus pandemic it was difficult to estimate the ongoing cost of the cards.

“They won’t tell us when and if they are going to put those new people onto the cards and how many (people) there are,” she said.

“Consistently, since these trials have been going, they (the Government) … say they’re negotiating the best deal.

“They give us more global figures down the track but then it’s hard to know how much each per card per person.”

In a statement, a Department of Social Services spokesperson said it did not “breakdown upfront costs for each from the operational costs of the Cashless Debit Card”.

The cost of making the Cashless Debit Card permanent cannot be published as it is commercial-in-confidence and could impact future procurement activities.

In relation to the procurement process, it is important to note that Indue is a public company wholly owned by mutual financial institutions. Each procurement process for the Cashless Debit Card, since its introduction in 2016, was conducted in accordance with the Commonwealth Procurement Rules, relevant legislation, policies and probity principles.”

Siewart said not only did the Australian public have to foot an unknown bill but the cards were impacting low-income earners’ sense of worth.

“Sometimes people lose control over certain aspects of their lives, but being able to have control over your expenditure and your finances is really important to people,” she said.

“The government can say this is nonsense – but this is how people feel – they feel like the government has taken away control over one of the most personally important things to people, that decision making over expenditure and they feel shame and they feel loss of control.”

Australian Council of Social Services senior advisor Charmaine Crowe said the government had spent “well over $1 billion since 2007 on income management and cashless debit”.

“It is a costly policy,” she said.

“We would argue that there are far better ways to spend those resources on measures that actually help communities, on measures that are community driven, particularly for Aboriginal and Torres Strait Islander communities.

“This is a policy that’s adopting a very top-down approach on communities rather than working with local communities, listening to their solutions and putting those solutions into action.”

Government minister Trevor Evans, who introduced the bill, previously said the program aimed to reduce immediate hardship and deprivation, help welfare recipients with their “budgeting strategies” and reduce the likelihood people would remain on welfare.

He pointed to an evaluation released in late 2017 as evidence that the cashless debit card program was working.

However, an independent study of the cards from earlier this year found the cashless debit system did more harm than good.

It followed an auditor-general report from 2018 which found the Department of Social Services inadequately monitored and evaluated the scheme, making it unclear if there’d been a reduction in harm.

An evaluation of the scheme being undertaken by the University of Adelaide is expected to be handed to government today.

Social Services Minister Anne Ruston last week said she while she had not received the university report the government hoped to pass the legislation before the year’s end.

“The government is ignoring every credible evaluation of income management and cashless debits since 2007, which have concluded that this kind of policy doesn’t work. It fails to improve the lives of those who are subjected to it and in many communities, we’ve actually seen it cause harm,” Crowe said.

“It appears that the government has been selected evaluations on the basis of them presenting a positive picture on this policy whilst they are ignoring more credible evaluations that show that this policy actually is not achieving its objectives.

“So, we are strongly urging the government to withdraw this piece of legislation and instead abolish mandatory cashless debit and income management and if it is to exist, then it should be provided on a voluntary basis only.”

Indue told InDaily it could not comment on matters that are commercially confidential and directed InDaily to the Department of Social Services.

Minister for Families and Social Services Anne Ruston did not respond to InDaily’s questions.

– with AAP

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