Ian Goodenough (Moore, Liberal Party) Share this | Hansard source

I rise to speak in support of the Social Security Legislation Amendment (Debit Card Trial) Bill 2015. The bill seeks to amend the existing social security legislation to enable the trial for up to 10,000 social security recipients of a Centrelink cashless debit card in up to three discrete communities. The purpose of the trial is to assess whether quarantining the majority of a recipient's welfare payments from spending on liquor, gambling and cash advances will be effective in reducing the social harm caused by welfare funded alcohol, gambling and drug abuse.

The objective of the policy is to: break the cycle of addiction to alcohol and drugs; minimise gambling problems, violence and antisocial behaviour; address the neglect of children and dependents; and stop long-term intergenerational welfare. The policy aims to promote responsible lifestyle choices through welfare payments being spent on providing clean, hygienic homes, nutritious meals and more stable family environments. This is the foundation for increasing attendance at school and successful placement in vocational training, with a view to increasing employment participation in the workforce. Money alone will not fix the problem of social disadvantage. Closing the gap requires motivation of individuals through support programs and mentoring.

The criteria to be used for selecting local trial sites include high dependence on welfare, high social harm indicators and a willingness by local community groups to participate. The year-long trial is proposed in response to a key recommendation from the Forrest review. A central recommendation of The Forrest review: creating parity report is the introduction of a cashless debit card that restricts the purchase of alcohol and gambling services for all welfare recipients called the healthy welfare card. Subject to the passage of this bill, the trial is due to be implemented from February 2016.

Let me put the broader issue of welfare into perspective. In 2015-16, the government will spend $154 billion on welfare, which is around 35 per cent of the total government expenditure. The current welfare payment system manages 40 different payments and 38 supplements. The Department of Human Services is responsible for delivering welfare payments through Centrelink to 7.3 million people annually. In Australia, we have a very generous welfare system to support those in our community who genuinely need support. However, we must implement policies to encourage greater workforce participation, individual independence and the spirit of endeavour and enterprise. We as a nation can do much better than having one-third of our population dependent on welfare.

The government has announced that the Ceduna region will be the first trial site. Ceduna is located on the mid-coast of South Australia, approximately 800 kilometres west of Adelaide. The town and its surrounding region has a population of 4,425 people. The regional towns to be included include Koonibba, Oak Valley, Yalata and Scotdesco. The region runs further west to the Western Australian border. Despite its relatively small population, which is the size of a typical metropolitan suburb, the region had in excess of 500 presentations to the hospital emergency department due to alcohol or drug related use in the 2013-14 year. Over the same period, Ceduna has had 4,667 presentations at its sobering-up facility. Hospitalisations due to assaults in the region are 68 times higher than the national average. Clearly, in these circumstances there is justification for the government to take preventive action.

Following extensive consultation with community leaders, a memorandum of understanding was signed agreeing to the trial. In addition, advanced discussions with leaders in the East Kimberley region in my home state of Western Australia are progressing. A letter to the government, dated 27 July 2015, stated:

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.

Under the terms of the trial, all working-age social security support recipients will compulsorily be part of the trial and will receive a mainstream debit card connected to the Visa, MasterCard, or EFTPOS platform. The trial is not discriminatory on ethnicity or race. Everyone of working age in receipt of an income support payment and residing within the trial boundaries will be required to participate in the trial. The debit card will be able to be used universally for the purchase of all goods and services, with the exception of alcohol and cash advances. Furthermore, as cash will not be able to be withdrawn, the debit card will prevent the purchase of illicit substances.

It should be noted that the trial is not compulsory for aged pensioners, veterans and workers. However, they may opt in if it assists them with budgeting and money management. Under the system, 80 per cent of a person's social security payment will be placed in the recipient's cashless debit card account, with the remaining 20 per cent cash deposited into the recipient's bank account to be available for discretionary spending. These parameters were set in consultation with the Ceduna community. As part of the trial, a local authority will have the power to adjust the parameters and settings of the card should an individual apply to that authority for a change and demonstrate that they are responsible by adhering to a set criteria of social norms.

Public and stakeholder consultation has been extensive and has included peak welfare advocacy organisations, such as the Australian Council of Social Service and carers and seniors groups. Industry groups have been involved with the process, including the financial service institutions issuing the debit cards, Clubs Australia, the liquor industry and local retailers. Locally, the Ceduna and East Kimberley communities have been consulted, including local governments and retailers. In addition, the views of a broad section of Indigenous leaders have been canvassed, including the Prime Minister's Indigenous Advisory Council. The state governments of New South Wales, Western Australia and South Australia have also been consulted.

Some welfare lobby groups have argued that the card will breach the rights of welfare recipients to spend welfare payments as they choose. However, the community has a justified expectation that governments will take responsible measures to minimise social harm, violence and child neglect. Overall, there has been little public opposition to the trial. The debit cards are less proscriptive than the current BasicsCard, as they do not set expenditure limits on prescribed categories and they are more universally accepted by retailers and service providers as part of the wider Visa, MasterCard and EFTPOS banking platforms. There have been suggestions that attempts have been made at circumventing the system through bartering and through other schemes. However, it does not make impulsive access to alcohol and gaming easy, so it is reasonable to predict that the Centrelink cashless debit card will significantly increase compliance with social norms. In a small number of instances, additional compliance arrangements will have to be made for general stores in remote communities which are permitted to sell alcohol and general goods.

The rationale behind targeting social security support recipients of working age is that the trial is based on the premise that welfare support is only intended to be temporary, to assist people who are unemployed whilst they transition between jobs. Welfare is not intended to be a long-term or generational option. Increasing workforce participation is a key objective of the coalition government and essential to our nation-building agenda. The budget allocates $331 million to increasing employment participation and providing the skilled workforce needed to build the economy, including $212 million earmarked for the Youth Transition to Work program. To assist job seekers transition into the workplace, 6,000 places have been provided in the National Work Experience Program, as has $106 million to provide intensive support trials for job seekers of all ages from disadvantaged backgrounds. Furthermore, $1.2 billion has been allocated in the national wage subsidy pool to counteract long-term unemployment.

I have personally visited remote communities in Western Australia and witnessed firsthand the living conditions of our most disadvantaged citizens, who, despite receiving welfare support, are living in squalid living conditions and a state of neglect due to addiction, mental illness and an inability to satisfactorily manage their own financial affairs. On an outback trip with the former member for Durack, Mr Barry Haase, we came across an individual who loaned money to desperate locals on very non-commercial terms, holding their ATM cards as security until their next welfare payment was due. The same individual operated a gambling operation at the back of the local race course where the locals betted very heavily and invariably ended up losing their money and being unable to meet their basic living needs. A short time later the media reported that the individual concerned had been investigated by the authorities and charged with various offences. In this scenario, quarantining the majority of an individual's welfare payment and restricting cash advances would protect the vulnerable in our community from being taken advantage of by unscrupulous individuals.

On a trip to northern Western Australia, I witnessed individuals camped on the outskirts of town, sleeping rough with no form of shelter. The local chamber of commerce had expressed concerns about these individuals roaming around town in an intoxicated manner and antisocially harassing customers and tourists in the hospitality precinct. Given that these individuals were in receipt of social security payments, it was evident that addiction issues had prevented them from adequately providing for their basic needs. Our social security system provides adequate support for individuals to meet their most basic needs; however, there are certain individuals who need assistance with making these choices. The Centrelink cashless debit card will assist welfare recipients in meeting their basic needs by quarantining a major component of their social security payment to meet essential living expenses, with a small amount reserved for discretionary non-essential purchases.

Unfortunately, it is the case in our society that serious alcohol, drug and gambling problems across Australia not only affect the individuals concerned but also cause significant social harm to others in the form of domestic violence, the neglect of children, homelessness, destitution and a range of law and order problems.

This trial represents a policy initiative aimed at addressing these issues. At the conclusion of the trial an independent evaluation will occur to measure the effectiveness of reducing social harm by analysing the relevant key indicators, including hospitalisation statistics and law and order rates. I commend the bill to the House.

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