Julie Owens (Parramatta, Australian Labor Party, Shadow Assistant Minister for Citizenship and Multicultural Australia) Share this | Hansard source

The Social Services Legislation Amendment (Cashless Debit Card) Bill 2017 allows the existing trial of the cashless debit card, currently in Ceduna and the East Kimberley, to be expanded to additional sites. The government has named two sites they wish to extend it to: Hervey Bay and Bundaberg, and the Goldfields in Western Australia. The Labor opposition will be opposing this bill. I want to explain why that is. At various times, the Labor opposition supported the early trials in Ceduna and East Kimberley. But, looking at the plans to expand and looking at the reports on those programs to date, we don't believe an expansion can be justified.

Clearly, Labor supports community driven initiatives that tackle drug and alcohol abuse. There'd be nobody in this House who doesn't want to assist people who suffer from addictions to build better lives. We support community driven initiatives to tackle drug and alcohol abuse but we don't believe that the vast majority of social security recipients aren't capable of managing their own personal finances, so we would oppose completely the cashless debit card being rolled out nationwide. But it is still worth looking community by community at what the needs are and what that community wants, which is why initially we supported the Ceduna and East Kimberley projects when they were put forward. We did so after consulting with local community leaders. We did so after securing additional funding for wraparound services, including drug and alcohol counselling and more mental health support services. It's really important to recognise that, in the case of Ceduna in particular, the community leaders were very supportive. In fact, in 2015 a formal memorandum of understanding was signed with community leaders, including the Ceduna Council, the Community Heads Group and leaders from the surrounding Aboriginal communities. So there was very real support for the trial in Ceduna.

The government is now seeking to expand this project quite considerably and Labor can't support it. In 2017, the government announced that it would roll out the cashless debit card in two further locations: the Goldfields, and Bundaberg in Queensland. The bill would allow the existing trial to be extended to the additional sites. The original trials would end in June 2018. In the Ceduna and East Kimberley trials, the program applies to all people who receive a working-age welfare payment, with the exception of age pension and veterans' pension recipients. The Bundaberg and Hervey Bay program will apply to people aged 35 and under who receive Newstart, youth allowance, jobseeker parenting payment partnered and jobseeker parenting payment single. As I said before, it also ends the trial in Ceduna and East Kimberley in June 2018.

Labor's position is really quite clear. We will be moving amendments in the Senate to reflect the position that the trials in Ceduna and East Kimberley should be extended to June 2019. That's something the community itself asks, but we'll limit the trials to only those two discrete trial areas. We'll oppose the removal of the limit to 10,000 participants. We'll specify how people in the trial areas who are on the cashless debit card can have a proportion of their income support payments on the card reduced or exit the trial. We'll also specify funding for wraparound services in trial sites formally in the legislation. Our position is really quite clear. I commend our shadow minister, Jenny Macklin, for the amazing work she has done on this. She has consulted widely. She has been to the areas. She has worked incredibly hard on this, and our position is clearly outlined in her speech on the second reading. If anybody wants the full 30-minute version, shadow minister Macklin has laid it all out in her speech on the second reading.

The Senate is inquiring into this program now. It's unfortunate the government hasn't waited until that inquiry reported before bringing this bill on for debate in the House; we might all be better informed, including those on the government side, if that were the case. A number of submissions have been put forward to the inquiry, and those have been available. They make for very interesting reading. It's really clear that there has been insufficient consultation in the two proposed trial sites of Goldfields, in Western Australia, and Hervey Bay and Bundaberg in Queensland. As I stated earlier, from the Labor perspective it's incredibly important that any trials of this kind that affect an entire community are only undertaken after extensive consultation and agreement with the local community across the board. This is a very complex area that we're talking about here and something that profoundly impacts the capacity of people to manage their own financial affairs. Consultation must be extensive—and it hasn't been.

There are also very mixed views on the evaluation of the program by the company, ORIMA. They did quite an expensive evaluation for the government, and there is extensive criticism of this evaluation in the submissions made to the Senate inquiry. One of the big criticisms concerns the nature of the survey itself. It was done in person. People had to give their own names. You can imagine, Mr Speaker, if someone asked you: 'So, did you take more or less illegal drugs after the cashless debit card was introduced?' I don't imagine there would be many people who would answer that question accurately. 'Did you drink more or less?' 'Have you been driving drunk more or less?' I assume you do not do that, Mr Speaker, but I'm sure you get my point. With the Indigenous community, in particular, who already have quite a suspicion towards authority, it's hard to imagine that the local populations in Ceduna or East Kimberley answered those questions accurately. One would suspect that you would get a bias towards good behaviour in the answers whether it was there in reality or not.

There's also a bit of cherrypicking of the results themselves: 45 per cent of the users surveyed found they were better at saving—that's true, but what is not publicised as much is that 50 per cent found they were not; 23 per cent said it made their life better, but 42 per cent said it had made their life worse; and 40 per cent could better look after their children, but 48 per cent said they could not better look after their children. So we've seen a bit of cherrypicking. In the figures provided in the original research, you can cherrypick and get quite good results, but when you look at the overall results they're not as glowing as the government would have you believe.

When participants were asked about the impact of the trial on their children's lives, 17 per cent reported feeling that their lives were better, but a bigger group of parents, around 24 per cent, felt that their children's lives were actually worse. And, in the conversations that reflected on the trial's impact on their lives, 32 per cent reported that it made their lives worse, compared with only 23 per cent that said it improved them. People responded too that it made things that seem so simple quite difficult. Transferring money to children who were away at boarding school, paying at the swimming pool and buying food at the markets, for example, were all rather difficult under this trial.

Cost, though, was something that really stood out for me. We've seen reports that the cost to roll out this card is somewhere between $7,900 and $10,000 per person per year. That's an extraordinary amount of money per person. I look at that and think: 'Okay, is there a better way to use that amount of money? If the government's prepared to spend $10,000 per person rolling out this card, are there other services that might actually improve a person's capacity to manage their income that would work better than that one?'

The biggest criticism for me in addressing that $10,000 per person is that I can't see how income management of this kind actually teaches a person about financial management in the long run. I can understand that, by taking away the capacity of a person to make good decisions on their own, you might get a short-term bang for your buck until, I would say, people start finding ways around it. Every system you introduce can be gouged and rorted. It immediately comes to mind that you'd find sly grog doing quite well on the side. You'd find the occasional corrupt shop that was prepared to accept a higher price for goods that weren't allowed on the cashless debit card and essentially cook its books to show it didn't do that. You'd find a person who would say, 'You buy me that fishing rod; I'll give you this carton of beer.' There are ways that people can find around these sorts of programs if they choose, and it's not hard to work out what they are. Over time, addicts will find a way to get access to the drugs they want. Gamblers will find ways to get access. And others in the community who have fewer moral convictions of their own will find ways to enable that for a fee. That's what will happen in the long run. It's impossible to imagine that that wouldn't be the case.

I was looking at the rules for this card and comparing it to the way I manage my money. I actually think I'm quite good at managing mine, but I would find it very difficult to manage my money under this card because it has several pages of rules. In fact, even on the unexpanded version on the Indue website, there are 10 pages of rules. One of those that first struck me as something that would make my system unworkable is the limit on automatic transfers. You can transfer zero dollars per month for housing and $200 per month for other expenses on your Indue card. Now, you can go in and get that changed. You can apply to the department. You can go online. There are all sorts of things you can do—lots of online stuff—if you want to get those amounts changed, but it's quite complicated to do that. I would ask whether a person who actually was finding it so difficult to manage their money that the Indue card might be an advantage would be able to manage the complex systems that would allow them to structure their card for their best benefit. Housing payments of zero dollars per month—that means no automatic transfer of your rent unless you contact the department and get that changed.

I sat down one week several years ago and moved all of my automatic payments so they all happened within three days of being paid. So my gas, my electricity, my rent, my insurances—everything is paid by automatic transfer. There is no capacity on the Indue card to do that without an incredible amount of paperwork. Again, I would ask whether a person who found it necessary to have this sort of system would be capable of navigating that process. I would argue that a person who is capable of navigating that process probably doesn't need income management because they know what they're doing. And, again, I can't see that this system works for people who are good at managing their expenses. It is quite an interesting challenge to get this sort of thing right.

Another issue that came up in the review, and it's there in the submissions to the Senate inquiry, is the difficulty people have in getting out of this system. My understanding is that from the beginning the people in Ceduna, for example, were told they would be able to opt out—if you were good at managing your finances, and you didn't have drug and alcohol problems, you could opt out—but it's actually proving quite difficult to do that. The rules relating to how you actually opt out of this system and how you get people off it are very, very vague. Again, that's one of the reasons why we'll be moving amendments in the Senate to clarify that.

I would argue that there are people in the community for whom income management would be very beneficial, but it's not across the board. There are many, many people in every community who are perfectly capable of managing their finances. I would argue that perhaps it might be more sensible for a government to look at an opt-in system, a system where people can be referred to income management because of the circumstances of their lives, and that any attempts to further expand this system take place after extensive consultation with experts on what is the best way to use the extraordinary amount of money that this program is costing.

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