Mitch Fifield (Victoria, Liberal Party, Minister for Communications) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

S ocial S ervices L egislation A mendment (C ashless D ebit C ard T rial E xpansion ) B ill 2018

This bill adds the Bundaberg and Hervey Bay area as a cashless debit card trial area under the Social Security (Administration) Act 1999 and specifies people who will be trial participants for the site, as well as exceptions. The bill will allow the Bundaberg and Hervey Bay trial site to operate until 30 June 2020, allowing time to implement the trial, and for it to operate for at least 12 months. The bill updates the current limitations on the number of participants from 10,000 to 15,000, recognising the increase that would come from implementing the cashless debit card to this area. The bill also introduces provisions that allow merchants to block restricted goods at the point of sale. This bill will support additional card functionality at merchants in each of the cashless debit card trial sites, and could allow trial participants to access additional merchants.

In line with this government's announcement on 21 September 2017, the Bundaberg and Hervey Bay area will be the fourth cashless debit card site nationally. This bill continues our commitment to provide the cashless debit card as an additional tool to address social harm, particularly in this community.

Welfare payments are provided to people in need to help with essential living costs, in particular food, clothing, shelter, and transportation. The community expectation is that these payments will not be spent on harmful goods such as alcohol, gambling and drugs.

The cashless debit card aims to reduce the devastating effects of alcohol, drug and gambling abuse. The card operates like an ordinary debit card, with the primary difference being that it does not work at liquor stores or gambling houses and it cannot be used to withdraw cash. Consequently, illicit products cannot be purchased with the card.

The trial of the cashless debit card has been ongoing in Ceduna, South Australia and the East Kimberley, Western Australia for more than two years. In February this year, parliament passed legislation to allow the program to continue in these communities and be expanded to a third site, the Goldfields area in Western Australia, which commenced in March 2018.

This bill will allow the cashless debit card to be rolled out to a fourth site, the Bundaberg and Hervey Bay area in Queensland, from later this year. The cashless debit card will operate in Bundaberg and Hervey Bay until 30 June 2020. This will allow time to roll-out the program in this area, and allow it to operate for a minimum of 12 months.

For the purposes of the bill, the Bundaberg and Hervey Bay area has been defined as the federal electoral Division of Hinkler, in line with the electoral boundaries as at 31 May 2018.

The bill seeks to have the criteria for trial participants in the Bundaberg and Hervey Bay site enshrined in legislation. Those persons living in this area aged under 36 years of age, and receiving Newstart allowance, youth allowance (Jobseeker), parenting payment (single) or parenting payment (partnered) would be transitioned onto the cashless debit card. This would impact around 6,700 people, and represents a more targeted approach to the one taken in Ceduna, South Australia and the East Kimberley and Goldfields in Western Australia. The bill also specifies that for the Bundaberg and Hervey Bay trial site, welfare recipients that are not included as trial participants may not volunteer for the cashless debit card. This will allow the government to test the impacts of the cashless debit card trial on people under 36 years of age in this region.

The criteria for trial participants also sets out some exceptions where a person would not be transitioned onto the card, drawing on policy parameters used in existing sites. This includes a provision for the secretary to exempt a person where inclusion in the trial would pose a serious risk to the person's mental, physical or emotional wellbeing.

Expansion of the cashless debit card under these criteria will allow the effectiveness of the program to be further tested and understood in the context of a larger urban population. It is also an opportunity to test the technology in a more diverse community. This area has a significantly higher non-Indigenous population than other sites currently operating.

The selection of the cohort in this area has occurred as a result of significant consultation with the impacted communities in the area. This is designed to help address key social problems identified during meetings with the community. In particular, high youth unemployment, intergenerational welfare dependence and local children whose needs are not being met.

According to regional youth unemployment data produced by the Queensland Government Statistician's Office, in March 2018, Wide Bay, which includes the Bundaberg and Hervey Bay area, had a youth unemployment rate of 28.7 per cent. This is an increase of 4 per cent from March 2017. The youth unemployment rate for the state as a whole in March 2018 was 13.4 per cent.

Bundaberg and Hervey Bay has a high level of long-term and intergenerational welfare dependency. Children born to parents who are welfare dependent are more likely to become welfare dependent themselves.

Ninety per cent of the people in Bundaberg and Hervey Bay under 30 and on Newstart or youth allowance, had a parent or guardian who received income support at some point in the last 15 years. Further still, of that cohort, around 13 per cent had a parent or guardian who received income support at least once each year for the past 15 years.

A parent's attitudes to work, welfare, alcohol and drug consumption contributes to the likelihood of their child finding work, remaining on welfare or abusing alcohol or illegal drugs in the future.

Research by the Australian Research Council indicates that risk factors such as attitudes to work and welfare, attitudes towards alcohol and drug consumption, and family influences contribute to intergenerational welfare dependency. The ARC also found evidence that young people from welfare dependent families are more likely to smoke, drink alcohol or consume illegal drugs, thus highlighting the relationship that welfare dependence has on a young person's outcomes in life.

Across Australia, 46 per cent of people attending government-funded financial counselling for their problem gambling were also receiving a taxpayer-funded benefit. In the Bundaberg and Hervey Bay area, this is much higher, with 73 per cent of the people attending problem gambling counselling receiving a benefit. Additionally, people attending financial counselling for their problem gambling in the Bundaberg and Hervey Bay area are more likely to have been on their current benefit for longer than five years, compared to other people in Australia attending problem gambling counselling.

The cashless debit card could help to stabilise the lives of young people in the area by limiting spending on alcohol, drugs and gambling, thus improving their chances of finding employment or successfully completing education or training. By targeting a younger cohort, we can influence positive behaviour change before welfare dependency becomes entrenched in a person's lifestyle.

We have seen that a 'spill-over' benefit of the card is that it can increase motivation to find work. As part of the Final Evaluation Report of the Cashless Debit Card Trial, we received feedback from some card participants in September 2017 that almost a quarter of people on the card are spending several hours a week looking for work. This is an increase from 11 per cent in February 2017.

As I have previously stated, the Department of Social Services has undertaken significant consultations with key stakeholders and community members. Specifically, between May and December 2017, over 188 meetings, including three community information sessions, were held across the Bundaberg and Hervey Bay area.

A community reference group was established in late 2017 to work through local policy and implementation issues to ensure the cashless debit card is implemented effectively in their community. They have met four times.

Feedback from meetings undertaken in the area is that while services are available, sometimes they are not connecting effectively with those vulnerable people who might benefit the most from them. The government would work with key stakeholders in the area to determine the needs of local participants and any support they require.

Additionally, a local shopfront will be established with staff who could link people with existing services. Through the community reference group, the department will monitor service demand to ensure the cashless debit card is complemented by appropriate supports for people as they adjust to this change. For example, this will ensure participants who require assistance learning how to use the card can also receive help setting up budgets and get other financial planning support if needed.

Complementing the card will be a further investment in community services of $1 million. There are already a significant number of services in place, including 70 federally funded services across the area, which includes drug and alcohol services, financial capability services, employment and families' and children's programs.

The bill will allow the program to respond to unforeseeable circumstances, such as wide-scale power outages and natural disasters, allowing trial participants in Bundaberg and Hervey Bay to access their full payment as cash. This amendment will ensure participants and their families remain supported in the event of wide-scale emergencies.

The bill will also allow the option of establishing a community panel in the Bundaberg and Hervey Bay area to allow participants in the area to apply to have access to a higher portion of unrestricted funds. Consultations with community leaders in the area have indicated that independent community panels may be a useful tool in encouraging people to uphold social norms.

The expansion of the cashless debit card to the Bundaberg and Hervey Bay area builds on findings in the final independent evaluation report, which found that the card had 'a significant positive impact' in the first two trial sites. According to the evaluation, the cashless debit card has been effective in reducing alcohol consumption and gambling in both trial sites and found the participants who reported drug use before the trial were using illegal drugs less often.

Across the two trial sites, 41 per cent of participants surveyed who drank before the trial started reported they drank less frequently.

Additionally, 37 per cent of participants who reported engaging in binge drinking before the trial said they were doing this less frequently.

In the East Kimberley specifically, of participants reporting that they drank alcohol before the trial commenced, 43 per cent reported drinking less at Wave 2.

Across the two sites, 48 per cent of people reported gambling less often. From April 2016 to March 2017, poker machine revenue in the Ceduna area was 12 per cent lower than in the same 12-month period before the trial started in March 2016. This is the equivalent of almost $550,000 less spent on poker machines in the 12-month trial.

The government is heartened by the initial positive findings. The expansion to the Bundaberg and Hervey Bay area will help test the card, and the technology that supports it, in more diverse communities and settings. However, this rollout would retain the policy objective of the cashless debit card program in making sure income support payments are directed towards helping people to pay for their housing, food and other essential items, for individuals and their families.

The government has also announced a second evaluation of the cashless debit card across all three current trial sites, to assess the ongoing effectiveness of the program. The second evaluation will use research methodologies developed independently by the University of Queensland, and draw on the baseline measurements of social conditions in the Goldfields, developed by The University of Adelaide. Findings from the second evaluation will be published in late 2019.

To support the cashless debit card trial, this bill will strengthen the provisions that enable merchants to block the sale of restricted goods to trial participants at the point of sale. Merchants in trial sites will more readily be able to service participants of the program, through the option to implement product level blocking solutions, automatically blocking transactions where a participant is attempting to purchase restricted goods with the card.

In doing so, the bill also clarifies the restriction on 'cash-like' products, such as gift cards, vouchers, money orders, or digital currency, where these could be used to purchase alcohol and gambling products. These products are included as restricted goods, as has always been the intention of the program. Clarifying this provision to include 'cash-like' products will support product-level blocking amendments, and help prevent participants from circumventing the program and spending their welfare payments on alcohol, gambling and drugs.

The cashless debit card is a world first in how it operates. The evaluation has been conducted and it has been shown to work. Consultation in the Bundaberg and Hervey Bay area demonstrates it needs a way to break the cycle of welfare dependency, and help people manage their income and stabilise their lives. This bill will allow this to occur.

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

In accordance with standing order 115(3) further consideration of this bill is now adjourned to 14 August 2018.