Thursday, 8 October 2020
Social Security (Administration) Amendment (Continuation of Cashless Welfare) Bill 2020; Second Reading
That this bill be now read a second time.
This bill continues our commitment to improve our welfare system and deliver a real difference to the lives of all Australians.
This bill, the Social Security (Administration) Amendments (Continuation of Cashless Welfare) Bill 2020, establishes the cashless debit card as an ongoing program in existing sites and provides for the transition of income management participants across the Northern Territory and Cape York region to the cashless debit card.
The cashless debit card program is delivering significant benefits for the communities where it currently operates. The program has the objective of reducing immediate hardship and deprivation, helping welfare recipients with their budgeting strategies and reducing the likelihood that they will remain on welfare and out of the workforce for extended periods.
The program is showing positive results.
Card participants were spending more of their welfare payments on essential items for themselves and their families, such as food, bills, clothes, household goods and fuel. This is confirmed by our card usage data that shows that spending at supermarkets is up almost 35 per cent and spending on household goods is up over 160 per cent. Over the life of the program, over $125 million has been spent at businesses that sell groceries and food, that could not be spent on restricted items like alcohol, drugs and gambling products.
Evaluations of the cashless debit card show the program is working. The first independent evaluation released in late 2017 states that the card has shown 'considerable positive impact' in the initial trial sites, including:
The bill will provide certainty for welfare recipients currently on the cashless debit card, and see over 25,000 additional welfare recipients in the Northern Territory and Cape York region transition from income management to the cashless debit card. Currently, these participants hold a BasicsCard, a card which directs welfare expenditure towards priority needs.
The government recognises that the BasicsCard, while effective, can restrict an individual's ability of choice. Currently, the BasicsCard only works in stores that have signed a merchant agreement with Services Australia.
By comparison, the cashless debit card works everywhere except when individuals try to purchase alcohol, gambling products and some gift cards and to withdraw cash. The cashless debit card provides income management participants with greater consumer choice and autonomy, while reducing red tape for businesses. For example, it provides interest on participants' funds, gives access to new technologies such as contactless payments, provides greater choice as to where participants can shop and enables participants to know when and how their money is being used, just like we all do every day with our bank cards.