Mike Freelander (Macarthur, Australian Labor Party) Share this | Hansard source

I rise to offer not unqualified support to the bill currently before the House. In saying that, I recognise that this bill seeks to deal with very complex, difficult and deeply ingrained social problems. There are no simplistic answers, in spite of what you might hear from the other side. The Social Services Legislation Amendment (Cashless Debit Card) Bill 2017 will allow the existing trial of the cashless debit card to be extended to additional sites. Presently, there's a legislated limit of three sites, with a maximum of 10,000 participants in total. The legislation also sets 30 June 2018 as the end date for the CDC trials. Those limitations will be removed when this bill comes into effect. New trials will require the making of fresh legislative instruments which can be disallowed by either house.

I find the government's proposal troubling. I'm open-minded on the use of income management measures, but I'm in total agreement with the commentator Peter Martin from The Sydney Morning Herald when he writes:

If you were going to make life much more difficult for people on welfare you'd want to be sure there was a point. You'd want to trial the indignities, you'd want to know they helped.

As I said in relation to yet another of this government's many bills targeting those at the margins, if anyone in this country has a right to complain about government red tape and overregulation and also about lack of access, it's the poor and the disadvantaged.

My personal concerns centre less on the identified trial results or even on the government's effusive and overblown response to them, though these concerns are real enough. What I truly doubt is the CDC's capacity to deliver substantial and lasting benefits over the longer term to some of the most disadvantaged communities. I worry also that the cashless debit card, like its precursors and other forms of income management arrangement, might, in some instances, deepen welfare dependency or even further inure us to it. As one highly experienced social researcher has said:

Most trials have some initial effects, the Hawthorne factor, but these usually wear off, so good policy needs very solid data to justify major changes, particularly in areas that deeply affect people's lives.

It's an open question for me whether a better approach might be to trial more extensive and intensive efforts to lift the standard of health and standard of education of those living in disadvantaged conditions. There are many things we can do that can improve people's situations without putting in the cashless debit card. By that I mean improving overall health—not just more health care, but infant health, health of young adults and pregnancy health. There are many things we can do before we move to the cashless debit card. I think we also need to try other forms of assistance—some, at times, more radical—and see whether they can produce more lasting and more cost-effective solutions. That's more than I fear we are likely to see from the cashless debit card in the longer term, and I do worry about its persistence as a method of social control in very disadvantaged communities.

Extensive research work undertaken by those who have spent a lifetime in this field dealing with the interrelationship between health, economic and societal wellbeing clearly demonstrates that you cannot address health issues without attacking inequality and vice versa. I speak in particular of Sir Michael Marmot, the previous head of the World Medical Association, and his belief in the social determinants of health. As a paediatrician, you might imagine the sorts of things I have in mind, such as early childhood health and pregnancy health. We know now that the science of epigenetics tells us that we can do a lot about people's lifetime health experiences and lifetime education experiences if we intervene to provide good antenatal care and good pregnancy care for people. So, like the Jesuits, I believe you have to get children when they're very young, even before they're born, to make long-term differences.

I've read and re-read the minister's second reading speech and the explanatory memorandum, the department's very brief submission to the Senate Standing Committee on Community Affairs inquiry and the exchanges between the government and the Parliamentary Joint Committee on Human Rights. I am also indebted to the Parliamentary Library for their insights and assistance. If the customary regulatory impact statement had been provided I would have read that as well, but it wasn't. The government has declined to include a financial impact statement in the explanatory memorandum on the basis of commercial confidentiality. But the department has advised through the parliament that the estimated cost of implementing and managing the CDC trial in Ceduna and the East Kimberley from 1 July 2015 to April 2018 is $18.9 million. That's just, of course, for a total of 2,000 participants. This is a very expensive program for very limited apparent benefits.

In 2013, the Australian National Audit Office reported that the estimated cost per person per year for managing income measures such as the CDC could be as high as $7,900 per person per year in remote areas. The income management regime that operated as part of the Northern Territory intervention cost in the order of $410 million and was also roundly criticised, including by a government-commissioned evaluation report, a report prepared by the Social Policy Research Centre at UNSW. All I'd say is that you can get a lot of health care, a lot of medical support and a lot of educational support for that sort of money.

The cashless debit card can be used for purchases, excluding certain forms of gambling, illicit drugs, tobacco, alcohol and pornography. The CDC is a Visa debit card issued by the payment company, Indue. Cardholders can use the card at any bricks-and-mortar store that accepts Visa debit cards, unless the store has been blocked. It can also have its uses online. I acknowledge that the government has made progress in improving some of the technical aspects of the scheme, but there's some way to go yet, especially if the CDC is to operate effectively in more densely populated areas. Like earlier cards, the CDC suffers from the limitation that it directly blocks specific merchants and businesses rather than specific goods and services. Blocked merchants can be approved on a case-by-case basis if they undertake to have their staff guard against prohibited activity and if the store refuses to process prohibited transactions, including excluded goods such as alcohol.

The manual screening process necessarily adds to the cost and complexity of the scheme. It also makes elements of compliance highly contingent and it is difficult to see how it might readily translate from isolated regional communities to regional centres. The proposed Hinkler and Bundaberg trials will no doubt test this. In each of the two trials to date in the East Kimberley and Ceduna, 80 per cent of an individual's welfare payments are deposited in the cashless debit card account, with the remaining 20 per cent being placed in their ordinary savings accounts. Retaining some access to cash does mean that the scheme cannot entirely eliminate the possibility of welfare recipients using some portion of the entitlements on alcohol, prohibited drugs, gambling et cetera. Circumvention and gaming the system have been an issue for all income management schemes trialled in Australia over the past decade, as have cost and effectiveness.

ORIMA Research's first evaluation of the Ceduna and east Kimberley trials unearthed at least eight ways in which participants can circumvent the CDC restrictions. That tally is consistent with experience from all welfare card schemes trialled in Australia over the last decade. Even strong and undeniably well-meaning supporters of income management, such as Andrew Forrest and the Minderoo Foundation, argue that both past and current debit card systems suffer from technological limitations that make them difficult and expensive to implement and maintain. The Minderoo Foundation's submission to the as yet uncompleted Senate Community Affairs Committee inquiry argues that the government needs to overcome such technological limitations before extending the card to new communities. Blind to even the advice of those supporting further trials, the government has announced that it does intend extending income management and the CDC trials to at least two new sites: the Goldfields region of Western Australia and the federal electorate of Hinkler, centred on Bundaberg. The PM memorably described this as an act of love. Others might see it more akin to an act of blind faith.

Like some, I suspect, on both sides of this House, I do see how a cashless debit card or some other form of income management arrangement might be a useful data source, make a positive difference in the short term or act as an adjunct to other measures. I can also see it playing a supporting role, but only if it is well targeted, supported by local communities and proves cost-effective, meaning that it does not chew up either the scarce community resources and money that would be better spent elsewhere, such as in education, or goodwill that might be better invested elsewhere.

In his second reading speech, the minister quotes ORIMA Research's most recent evaluation report, which found that 'overall the trial has been effective to date'—hardly effusive praise. In particular, the trial has been effective in reducing alcohol consumption in the shorter term, illegal drug use and gambling, and has provided some evidence of proof of concept. This is a much more qualified claim than was initially made by the minister, who, on 1 September, in his excitement, ejaculated that the ORIMA evaluation has positive health and social outcomes 'almost without precedent'. Now, that is clearly not true.

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