Cashless Debit Card Expansion under COVID-19
This post questions the Morrison Government's recent decision to extend the Cashless Debit Card trials until the end of 2020. Dr Shelley Bielefeld (Law Futures Centre, Griffith University), Susan Tilley (University of South Australia), Priya Kunjan (University of Melbourne) and Dr Elise Klein (Crawford School of Public Policy, Australian National University) argue that the decision is unjustified by research and evaluation.
On 5 May 2020, the Minister for Families and Social Services, Anne Ruston, announced that the Cashless Debit Card (CDC) trials would be extended until 31 December 2020 across all trial sites. CDC legislation had only enabled extension of the card in the East Kimberley, Ceduna and Goldfields regions until 30 June 2020, so this extension aligns their timeframes with the more recent Hinkler trial. Last month’s ministerial move, likely authorised by deferred sunset provisions under COVID-19 legislation, curtailed opportunities for public input previously presented to stakeholders by other CDC expansions, which were undertaken via legislative processes accompanied by Parliamentary Committee scrutiny. We contend that sidestepping public debate on the CDC in this manner is problematic for a number of reasons.
Initially, the CDC trial in Ceduna and the East Kimberley was only supposed to be implemented for a 12-month period. Affected communities and cardholders were led to believe that they were participating in a time-limited trial. However, these ‘trials’ are now running into their fifth year in original locations and have been expanded to additional sites, affecting 12,678 people as of 24 April 2020. The Social Security (Administration) Amendment (Income Management to Cashless Debit Card Transition) Bill 2019, which proposes to roll the CDC out across the Northern Territory and Cape York and capture over 23,000 largely Indigenous people, currently sits before the Senate. This is despite evidence that the CDC does not achieve the government’s stated aims, and in fact causes further harm to many participants.
In addition to extending the timeframes for the ‘trials’, Minister Ruston’s announcement stipulated the introduction of a 1% interest rate and a contactless payment feature. This illustrates the Government’s willingness to prioritise minor technological tweaks over addressing many more serious concerns about the Card that have been raised by CDC participants, researchers and advocates since the trials commenced.
On 6 May 2020, the Department for Social Services released two government-commissioned reports on the CDC, which were prepared by the Future of Employment and Skills Research Centre (FESRC) at the University of Adelaide. The first of these Cashless Debit Card Baseline Reports on Bundaberg and Hervey Bay (dated December 2019) focuses on qualitative baseline findings in the region, and the second report (dated April 2020) provides a quantitative data snapshot.
The quantitative report is methodologically problematic, and compiles a range of descriptive statistics using community-level data drawn from the Hinkler, Wide Bay and Flynn regions (the latter two are outside the CDC Hinkler trial zone) and Australian government administrative data. As this is community-wide rather than targeted data, none of these statistics reveal specific insights about the behaviour of people who are to be forced on to the CDC. For instance, while the quantitative report reflected data about crime, substance use and gambling, there was no evidence that any problematic behaviour was caused by people on social security as opposed to tourists or others employed within the Hinkler region. The report acknowledges that tourism may have impacted ‘community level administrative data’. Generalised data for the region shows nothing specific about the particular situation for people receiving social security payments. This quantitative report merely highlights that Hinkler is a region where there are many people experiencing socio-economic challenges – particularly a chronic scarcity of employment – which is also a feature in other CDC trial sites.
The qualitative report is based on interviews conducted with 74 stakeholders and 66 people who were either about to be put on the CDC or who were already on the CDC, with many interviewees reporting ‘that they were opposed to the trial of the CDC (p. 6)’. Importantly, the most frequently mentioned problems centred on ‘labour market’ limitations with ‘lack of employment opportunities’.
The qualitative report reflects important cardholder concerns. For instance, it highlights that the CDC is increasing a sense of shame and stigma: ‘many CDC participants reported that they were reluctant to use their card as they feared being looked down upon or the target of negative comments by retail and hospitality staff, and also their fellow customers (p. 87)’. Some said this meant that ‘they did not want to use the card at all and were planning on giving the card to another family member to use on their behalf to avoid this perceived shame (p. 87)’. These findings are also confirmed by other independent academic research.
The qualitative report also provides insight into the nature of stakeholder views about the introduction of the CDC into the region. For example, it shows that while some stakeholders were in favour of the card being introduced, others were very much opposed to the introduction of the CDC, maintaining that the CDC would create social division in the community, would fail to address the causes of harmful substance use for people who did struggle with those issues, and would fail to address the acute job shortage in the region. These diverse stakeholder views show that there was no broad community support for introducing the CDC. Rather, the report illustrates that there were sound reasons why many of those at the frontline of support services had grave misgivings about the CDC. This calls into question government claims that introducing the CDC was strongly supported by the Hinkler community, and raises questions about which stakeholder voices the government chose to listen to and which to ignore in their consultation process. It shows how future trial participants were not considered to be stakeholders, disempowering them by excluding their voices from the consultation.
Finally, the qualitative report focuses heavily on impressionistic data, which ‘captures perceptions around what the anticipated impact of the CDC would be (p. 5)’. Some stakeholder statements reflected hope for positive outcomes from the CDC. However, aspirations regarding positive outcomes cannot be conflated with achievement of those outcomes. Impressionistic data falls well short of the robust evidence-base required to inform government CDC expansion decisions that impact thousands of Australians. To date, there is no evidence that a broad compulsory application of the CDC across generalised social security cohorts works to achieve the government’s expressed aims for the program.
The CDC was ostensibly established to address harmful substance use and foster social responsibility, yet some Hinkler stakeholders indicated that the CDC could also provide motivation for social security recipients to get into paid employment. However, while the CDC creates a limited number of employment opportunities for those implementing the government’s CDC program, it does nothing to address the chronic shortage of adequately paid employment opportunities in the Hinkler region, nor does it address any of the contributing factors to harmful substance use. Money funding the CDC would be better deployed in generating adequately paid employment opportunities, combined with a dignity-enhancing social security system that forces no-one into poverty. This is particularly important during the current period of escalating unemployment and economic and social anxiety due to the COVID-19 pandemic.
Content moderator: Sue Olney