Cashless debit card trials are being extended, but are they even working?

Updated April 04, 2019 11:13:51

The Federal Government has pledged $129 million to extend cashless debit card trials around the country, but a bigger question remains — do they even work?

The card, which is designed to curb anti-social behaviour and drug and alcohol abuse by quarantining welfare payments, was first trialled in 2016.

Key points:

  • The budget has allocated $129 million to extend existing trials and roll out the card in the Northern Territory
  • Only 20 per cent of carers, disability, or Newstart payments can be withdrawn as cash
  • Studies are underway, but no conclusive evidence exists to show the card meets its aims

But so far, reports of its success have been mixed.

Across Western Australia’s sprawling Goldfields, one of the largest trial sites with about 3,600 card holders, its impact is still being assessed.

In Laverton, a town of 400 in the north of the region, anecdotal evidence among locals has pointed to a positive impact on the community.

“There’s not so much access to hard cash, so they’ve been able to spend more money on clothes, food into the household,” chief executive of the Pakaanu Aboriginal Corporation, Marty Sealander, said.

“Individuals have had to think about their budgeting and what they spend their money on.”

But there is acknowledgement the card is not a magic fix for people with substance abuse issues, and loopholes are being exploited.

“We have heard of situations where people have been standing at the checkout and said to that individual ‘I’ll pay for your groceries if you give me cash’,” Mr Sealander said.

A recent University of Adelaide report, commissioned by the Department of Social Services, interviewed 66 Goldfields ‘stakeholders’ and 64 cardholders in the early stages of the trial.

It found “levels of substance misuse were reported by many respondents to have reduced, and alcohol-related, anti-social behaviour and crime had also decreased”.

“However, there is some uncertainty as to whether these impacts were a direct consequence of the CDC [cashless debit card] or were linked with concurrent policing and alcohol management interventions,” the report said.

No direct link between card and crime

While police have seen a reduction in alcohol-related crime in Laverton, Senior Sergeant Justin Tarasinski said it was not necessarily attributable to the card.

“The main thing that is important to remember about the cashless card is that it’s one program, one initiative as part of many,” he said.

“You can’t attribute the cashless card alone to decreases or increases in crime.”

In Canberra, the Government has long championed the expansion of the cashless welfare card trials, with a fifth proposed for Tennant Creek in the NT.

Both the Social Services Minister Paul Fletcher and Liberal backbencher Rick Wilson, whose electorate includes the Goldfields, have said the trials are succeeding.

“In general, there appears to be a very positive effect on the prevalence and severity of crime,” Mr Wilson told the ABC.

The first three trials were due to expire on June 30; however, legislation passed the Senate last night to extend the trials for another year.

Tuesday’s budget committed funding to further extend the four trials to 2021, but this has yet to pass the Parliament.

“These communities have done the hard work,” Mr Fletcher said in a press release last week.

“They have put their hands up … to tackle the scourge of welfare-funded drug, alcohol and gambling abuse in their communities — and their courage has been rewarded.”

However, a report released by the Australian National Audit Office last year found the Government’s own data on the initial trials was inconclusive.

The report found it was “difficult to conclude” whether there had been a reduction in social harm, such as alcoholism and violence, because there was a “lack of robustness in data collection”.

Labor has supported the Government’s one-year extension of existing trials, but has refused to support further trials commencing until impact evaluations are complete.

Labor’s Linda Burney told Parliament on Tuesday it would be “extremely disruptive” to halt the current trials weeks before an election.

But she added “leading academics have referred to the comments made by the Government as ‘extremely misleading’ and ‘perplexing'”.

“We are no longer talking about trials in some sites but a Government that is looking to entrench a policy without proving that it works.”

‘Of course this is about politics’

A development studies academic from the University of Melbourne, Elise Klein, told a Senate committee in March the trials were not supported by peer-reviewed research.

“Of course this is about politics, and it’s really disappointing because people who are forced onto this thing are some of the most vulnerable in the country,” Dr Klein said.

“[This is the third] time that myself and others have been invited to make the same kind of submissions, the same kind of evidence that doesn’t seem to be taken up.”

In the mining town of Kalgoorlie, in the heart of WA’s Goldfields, the card has been a subject of heated public debate since it was introduced last year.

Danny Ulrich, who cares for his disabled 18-year-old brother, wonders why he had been given a cashless debit card if it was designed to target alcohol-related behaviour.

“As a carer we’ve been put in with everyone else and put on the card,” Mr Ulrich said.

Mr Ulrich’s complaint is common among detractors of the card.

Before he committed to caring full-time, he was a police officer and worked in child protection.

“I’ve never drunk in my life, don’t smoke, don’t do drugs. The hardest stuff I’ll do is Panadol for a headache.”

The trial extension included an amendment by Labor allowing participants with no history of substance abuse to opt out of the scheme.

The card is now active across four trial sites: Ceduna in South Australia, Kununurra and the Goldfields in Western Australia, and Hervey Bay in Queensland.

As part of Tuesday’s budget, those who have been receiving payments in the NT under an older income quarantining scheme known as the Basics Card will be moved across to the cashless debit card.

A full evaluation of the Goldfields trial is expected to be completed by the end of the year.

Topics: welfare, federal-government, kalgoorlie-6430, hervey-bay-4655, kununurra-6743, ceduna-5690, tennant-creek-0860

First posted April 04, 2019 10:13:48

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