The Cashless Debit Card Trial is working and it is vital – here’s why

The Cashless Debit Card is a significant advance in tackling socioeconomic problems. National Aboriginal Community Controlled Organisation

The federal government’s Cashless Debit Card Trial, which began in selected communities in South Australia and Western Australia from March 2016, is a significant innovation in tackling the health and socioeconomic disadvantages in communities with high rates of social security dependency for long periods of time, and – in many cases – across generations. It is simply wrong to say, as some have argued, that the card causes social and economic harm.

Let me provide some context: it is clear that while there are historical and socioeconomic factors involved in the low life expectancy for Aboriginal people, the worsening rates of alcohol and illicit drug use are driving much of the illness and life-threatening behaviour – not just in remote communities, but across Australia.

The Cashless Debit Card tackles the problem that current welfare policies are a systemic enabler of illicit drug use, alcohol abuse and free-range gambling.

Some areas of Australia have high rates of social security dependence, and this is often intergenerational. Among this population, the people most at risk are often some of the most vulnerable, especially women and children. If welfare exists as a safety net, it should not be an enabler of harmful alcohol and drug use that contributes to high rates of violence and abuse, and traps people in poverty.

I have first-hand experience with the development of this trial in Kununurra because of my involvement in the Forrest Review of Indigenous Employment and Training.

The Greens have been vocal critics of the Cashless Debit Card. Senator Rachel Siewert has asserted the trials of it in Kununurra and Ceduna targeted Aboriginal people in a racially discriminatory way. This is not true. The trials apply equally to all recipients of social security benefits in these towns.

Most of Siewert’s claims were dismissed by Aboriginal leaders from these towns who gave evidence to the Senate inquiry. It reported that:

Most submitters and witnesses expressed support for the objective of the [debit card trial] to reduce the social harm caused by alcohol and gambling. A number of these supported the introduction of the trial as outlined in the bill, provided it was accompanied by appropriate wrap-around services, community consultation and a thorough evaluation.

Indigenous and non-Indigenous leaders of these towns expressed their strong support for the scheme, and gave harrowing evidence about the harmful impacts of alcohol in their towns, especially relating to the violence against women and abuse of children.

Importantly, as noted in the Senate report, the Indigenous community leaders in the East Kimberley region wrote to the federal government, saying:

We acknowledge that agreeing to the East Kimberley being a trial site for the restricted debit card may seem to some a rather drastic step. However, it is our view that continuing to deliver the same programs we have delivered for the past forty years will do nothing for our people and, besides wasting more time and money, will condemn our children and future generations to a life of poverty and despair. As leaders in the East Kimberley, we cannot accept this.

The Senate report made two recommendations. The first was that the government include safety net provisions to ensure people made more vulnerable by the trial can get out of it. The second was that the bill be passed.

How the Cashless Debit Card improves lives

Some critics of the card have stressed its restrictive nature. They emphasise what the card cannot be used for, while omitting that it can in fact be used to purchase anything except alcohol products and gambling services. Otherwise, it works the same as any other EFTPOS card.

Further, 20% of a participant’s welfare payment can still be used for cash withdrawals, and ultimately to purchase alcohol, gamble, or participate in the cash economy.

However, if someone is spending more than 20% of their benefits on alcohol or gambling products, there is a serious financial management problem. This is something the card protects against.

If you accept the government has an obligation to assist in ensuring a child’s right to be fed, clothed and sent to school, and also to help those on social security benefits make good financial decisions, then it makes sense that some conditions should apply to the card.

My position and that of the leaders of these two towns is that the rights of the vulnerable, especially women and children, trump a social security recipient’s “right” to drink grog or waste money meant for their families. The ability to gamble or purchase alcohol or illegal drugs is not a human right; the scheme does not breach human rights as defined in human rights laws.

The details of the extent of alcohol and substance abuse harms across Australia revealed by our Forrest Review consultations have been validated by the Australian Criminal Intelligence Commission’s National Wastewater Drug Monitoring Program Report, released in March.

Of particular relevance here are the findings from the wastewater testing, which showed that alcohol and tobacco are the highest-consumed substances in all states and territories, and alcohol and tobacco levels in the Northern Territory are considerably higher than the national averages.

An example of the Cashless Credit Card. indue.com.au

Not just another ‘income management’ strategy

Income management involves an “intervention” by Centrelink officials for those on welfare. It constitutes strict budgeting measures in which Centrelink officials pay “priority needs such as rent, bills and food” first, before distributing the rest of the payment.

The card is much less restrictive: the cardholder still has the choice of what to pay, and when.

Likewise, the type of “income management” that was being applied in the NT was distinctly different from what is being trialled with the card. The “BasicsCard” is only able to be used at registered outlets. The Cashless Debit Card can be used anywhere that accepts EFTPOS. Fewer than 10% of Cashless Debit Card trial participants cited shame using the card as an issue.

It is also wrong to claim that the evaluation report is not independent. Orima Research was contracted by the Department of Social Services to undertake the evaluation, and it has reported its initial findings in several publications. It is not a government body, and provides independent research.

Its interim evaluation report captures data from the first six months of the year-long trial, and concludes that:

Both quantitative and qualitative evidence indicates … a reduction in all three target behaviours [consumption of alcohol, illegal drug use, and gambling].

The trial has not exacerbated economic insecurity. The “economic” payment is secure – the amount has not changed. But it does limit cash, and undermines the cash economy that supports the sly-grog and drug trade.

The report tells us that of the 66% of trial participants who reported either drinking, gambling, or taking illegal drugs before or during the trial, 33% reported a reduction in at least one of these.

Furthermore, 31% of trial participants indicated they had been able to save more money, and better care for children. Only 6% of all participants raised shame associated with the card as an issue.

There is also a problem with drawing a definitive conclusion based on what is largely self-reported data. We should not draw hard conclusions at this stage of the evaluation, and neither should the government. The most accurate interpretation is that the results are mixed, but with a general skew toward the positive.

More than 20% of non-participant community members and trial participants reported they had noticed a reduction in the consumption of alcohol within their community. One-quarter of participants who reported using illegal drugs before the trial indicated they had been using illegal drugs less often; 27% of participants noticed a reduction in gambling within their community.

There was only limited evidence to suggest there had been a reduction in crime, violence and harm – although the report highlighted any change in these variables would be expected over the longer term.

Not all the findings were rosy. The most concerning data in the report were that 49% of participants and 37% of participant family members claimed the card made their lives worse. Only 22% of participants and 27% of participant family members reported it made their lives better.

However, these data are not proof that people’s lives are worse, but rather that they perceive their lives to be worse – despite the reduction in harmful use of alcohol and drugs, and the reduction in spending on gambling.

Unfortunately, the evaluation provides no context as to why participants and their family members might find the card to be such an imposition. It is possible, for example, that technical difficulties and a lack of understanding significantly contributed to the build-up of resentment among trial participants and their families. That is often the nature of trials, which are rarely perfect when first implemented.

The lack of clarity in relation to the negative components of the evaluation has not stopped critics from making a series of disingenuous and biased comments about the card and the trial. Notably, opponents of the card ignore the fact that for the most part, this is what the people in those towns wanted.

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