Business News

There's mounting evidence against cashless debit cards, but the government is ploughing on regardless

  • Written by Elise Klein (OAM), Senior Lecturer in Development Studies, University of Melbourne

It would be nice if the “facts” being thrown around in the debate over the Cashless Debit Card were peer-reviewed, or even just evidence-based.

Instead, there are anecdotes[1]. And it’s these that are being used to justify the government’s decision to spend A$128.8 million[2] over four years continuing the existing trial of the cashless debit card in five sites in Western Australia, Queensland and South Australia and extending it to Cape York and all of the Northern Territory.

The extension will lift the number of people on the card from 11,000 to 33,000. Most will be Indigenous people - its disproportionate targeting has already attracted the attention of the National Congress of Australia’s First Peoples and the Human Rights Commission[3].

The cashless card was recommended to Prime Minister Tony Abbott in a report[4] from mining billionaire Andrew Forrest in 2014. He initially called it the “Healthy Welfare Card[5]”.

It wasn’t a new idea. Some A$1 billion dollars had already been spent on income management programs in the past, many of which had failed to meet their stated objectives[6].

It’s been tried before

image The 2007 Basics Card. AAP[7]

The biggest was the Basics Card introduced as part of the 2007 Northern Territory Emergency Response (the “Intervention[8]”) which was only made possible through the suspension of the Racial Discrimination Act.

Research published by the Australian Research Council funded Life Course[9] Centre of Excellence found its introduction was correlated with negative impacts on children, including reductions in birth weight[10] and school attendance[11].

It points to several possible explanations, including increased stress on mothers, disrupted financial arrangements within households, and confusion about how to access funds.

The government has not addressed these serious issues. Instead, it now seeks to place those who have been left on the basics card for over ten years now, on to the cashless debit card.

What was ‘Basics’ has become ‘Indue’

image The 2016 Indue Cashless Debit Card. indue.com.au

The “Indue” Cashless Debit Card trials underway since 2016 direct 80% of each payment to the card (Forrest asked for 100%[12]) where it can only be spent on things such as food, clothes, health items and hygiene products. Purchases of alcohol and withdrawals of cash are not permitted.

The trials are compulsorily for everyone living in the trial sites receiving a disability, parenting, carer, unemployment or youth allowance payment.

My own research in the East Kimberley found it makes those people’s lives harder[13].

Those targeted are a broad group needing support for a broad range of reasons, yet all are treated as if they have issues with alcohol or drugs or gambling.

Most of the people on it do indeed have a common problem: that is trying to survive on meagre payments in remote environments with a chronically low supply of jobs.

Read more: 'An insult' – politicians sing the praises of the cashless welfare card, but those forced to use it disagree[14]

Of all the claims made for the card, the least believable is that it gets its users into jobs.

What it does do is limit access to cash needed for day to day-to-day living. It makes it hard to buy second-hand goods, transport and (at some outlets) food, and can make living more expensive.

For anyone actually struggling with addiction, it can’t substitute for treatment, a concern raised by medical specialists.

While the government says the trials have been community-led, in reality consultation has been limited to a small group of people not subject to the card.

When leaders in the East Kimberley who had agreed to the card withdrew their support[15], the government continued with the trial.

Its success has not been established

In addition to relaying on anecdotes, the government continues to cite a widely condemned report[16] by Orima Research[17]. Among others, the Australian National Audit Office found this report was inadequate[18] to draw any conclusions from.

Profiting from the Cashless Debit Card has been Indue[19], a private company whose deputy chairman[20] up until 2013 is now the present President of the National Party, Larry Anthony.

Read more: The Cashless Debit Card Trial is working and it is vital – here's why[21]

Indue’s involvement is helping to create a two tiered banking system[22] in which most people have a choice of financial providers, but those subject to the card are restricted to one, which provides a very different product to the others.

Indue is also not a member of the Australian Banking Association, and so is not bound by the consumer protection provisions of its Banking Code of Practice[23].

The inquiry is due to report next week[24]. Given the expensive and harmful consequences of the trial, it ought to find the extension is not justified. There are better ways to spend $128.8 million that would actually help vulnerable Australians.


  1. ^ anecdotes (www.anneruston.com.au)
  2. ^ A$128.8 million (parlinfo.aph.gov.au)
  3. ^ National Congress of Australia’s First Peoples and the Human Rights Commission (docs.wixstatic.com)
  4. ^ report (www.niaa.gov.au)
  5. ^ Healthy Welfare Card (theconversation.com)
  6. ^ failed to meet their stated objectives (caepr.cass.anu.edu.au)
  7. ^ AAP (one.aap.com.au)
  8. ^ Intervention (en.wikipedia.org)
  9. ^ Life Course (www.arc.gov.au)
  10. ^ birth weight (www.lifecoursecentre.org.au)
  11. ^ school attendance (www.lifecoursecentre.org.au)
  12. ^ Forrest asked for 100% (www.niaa.gov.au)
  13. ^ lives harder (openresearch-repository.anu.edu.au)
  14. ^ 'An insult' – politicians sing the praises of the cashless welfare card, but those forced to use it disagree (theconversation.com)
  15. ^ withdrew their support (www.theguardian.com)
  16. ^ widely condemned report (www.theguardian.com)
  17. ^ Orima Research (www.dss.gov.au)
  18. ^ found this report was inadequate (www.anao.gov.au)
  19. ^ Indue (www2.indue.com.au)
  20. ^ deputy chairman (nationals.org.au)
  21. ^ The Cashless Debit Card Trial is working and it is vital – here's why (theconversation.com)
  22. ^ two tiered banking system (www.researchgate.net)
  23. ^ Banking Code of Practice (theconversation.com)
  24. ^ next week (www.aph.gov.au)

Authors: Elise Klein (OAM), Senior Lecturer in Development Studies, University of Melbourne

Read more http://theconversation.com/theres-mounting-evidence-against-cashless-debit-cards-but-the-government-is-ploughing-on-regardless-123763

Business Daily Media Business Development

Food you need to try in Beijing

Beijing is a beautiful and interesting destination for any kind of traveler. However, foodies will find a new heaven and will be able to try out tasty, flavorful and sometimes very special...

News Company - avatar News Company

4 Best Budget-Friendly Attractions in Las Vegas

Perhaps no other city in the world deserves the moniker “Sin City” more than Las Vegas. This city has been illustrated in countless works of art as the place where dreams are made, lives a...

News Company - avatar News Company

Bahrain Property Show 2018: How does it reflect the real estate market development in Bahrain

It is no secret that the Arabian Peninsula and the Gulf Cooperation Council (GCC) countries are currently going through a lot of pivotal changes. Such changes do not include economic or po...

News Company - avatar News Company

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The black-tie Gala Dinner s...

Helen Hull - avatar Helen Hull

Five Reasons Melbourne Rules

If you are traveling in Australia and have left Melbourne off your destination list, then you are going to want to reconsider. Many people consider Melbourne to the best city in the world...

News Feature Team - avatar News Feature Team

Making Friends During Your Campsite Stay

Part of the excitement of vacation is meeting people who you would never otherwise encounter. Staying at a campsite isn’t just about taking in nature. It’s also about sharing the beauty of n...

News Feature Team - avatar News Feature Team

Business Daily Media Business Reports

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The bla...

Helen Hull - avatar Helen Hull

Eclipse Travel Expands Operations to New Zealand

Eclipse Travel, specialists in key adventure destinations such as Antarctica, the Arctic, Africa and Latin America, have announced today their expansion of operations to ...

Yvonne Kong - avatar Yvonne Kong

How medical professionals can benefit from an overall wealth management solution

As a health care professional, you have made it your life's work to focus on the care and health of the general public. While this kind of work can be extremely rewarding...

News Feature Team - avatar News Feature Team

Why Pinterest Should Be Part of Your Marketing Strategy

Pinterest is a growing social media platform that can deliver significant traffic to your website and new followers to your brand. With it’s steady growth and outrageous ...

Greg Nunan - avatar Greg Nunan

The top reasons why gyms fail

Steve Grant is a Business Coach and Founder of GymHub.com.au   Every month thousands of new trainers walk out of their 6-month course with the qualifications needed ...

Steve Grant - avatar Steve Grant

WHITE LABEL NOBA’s Winter 2016 season: Earth + Country

Taking cues from the warm winter colours of tobacco and caramel, and combining them with the strength of navy and the embracing lightness of whites and creams; and then...

Kath Rose - avatar Kath Rose

Former Etihad boss brings substantial event insight to PMY Group Board

Paul Sergeant PMY Group, the architects of the digital insurgency occurring at major venues across Australia and New Zealand, are delighted to welcome 35 year even...

Annie Konieczny - avatar Annie Konieczny

More training for coffee making than property sales: REINSW

Sydney 9 May 2016. An overhaul of education and training standards for the real estate profession must take place to help prevent illegal activities, according to the Rea...

Helen Hull - avatar Helen Hull