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Community Affairs Legislation Committee
07/08/2018
Social Services Legislation Amendment (Cashless Debit Card Trial Expansion) Bill 2018

BROWN, Mr Philip, Branch Manager, Policy Strategy and Capability Branch, Department of Social Services

HEFREN-WEBB, Ms Elizabeth, Deputy Secretary, Families and Communities, Department of Social Services

PATTRICK, Mrs Selena, Branch Manager, Welfare Quarantining and Gambling Branch, Department of Social Services

TALONI, Mr Bruce, Group Manager, Families and Communities Reform Group, Department of Social Services

[11:01]

CHAIR: We'll now go to the Department of Social Services, where we'll get to trial our videoconference facilities. I can see them; they can see us. Welcome. Can you please confirm that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you?

Ms Hefren-Webb : Yes, it has.

CHAIR: I remind witnesses that the Senate has resolved that an officer of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of an officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. The committee has your submission. I now invite you to make an opening statement, if you would like to, but then we will get on to asking you some questions.

Ms Hefren-Webb : I'll just make a brief opening statement. I'd like to thank the committee for the opportunity to provide comments in addition to our submission on the Social Services Legislation Amendment (Cashless Debit Card Trial Expansion) Bill 2018. The cashless debit card aims to reduce the amount of welfare payments available to be spent on goods that contribute to harm, such as alcohol, drugs and gambling, and, in doing so, reduce the violence and crime and other harmful behaviours that can devastate communities. The card operates like an ordinary debit card, except that it cannot be used to purchase alcohol or gambling products or to withdraw cash. Participants have 80 per cent of their welfare payment placed on the card, and the remaining 20 per cent goes in their regular bank account.

The cashless debit card is operating in Ceduna, South Australia, and the east Kimberley, Western Australia, and has been since March and April 2016. Based on the positive feedback from the trial communities and the interest from other communities, as well as the findings of the ORIMA evaluation, the government committed to expand the program to two new sites in the 2017-18 budget: the Goldfields region in Western Australia and the Bundaberg and Hervey Bay area in Queensland. Passage of legislation in February this year allowed the cashless debit card to be implemented in the Goldfields region only, with legislative amendments required to expand to any new sites in the future.

In March this year, the cashless debit card was implemented in the Goldfields region in Western Australia. The implementation progressed well, and the department has received initial anecdotal reports which indicate early success, including comments from local shop-owners noting increases in the sale of grocery items. The bill currently before parliament is necessary for the cashless debit card to be extended to the Bundaberg and Hervey Bay area as the fourth trial site.

The bill will increase the current participant number limitations from 10,000 to 15,000; specify a new trial site, of the Bundaberg and Hervey Bay area; specify the class of persons who will be trial participants in the new site; allow the option of establishing a community panel for the new site; allow the option for the secretary to make a determination to vary the restricted percentage in the new site in the event of unforeseen circumstances; clarify that merchants may implement product-level blocking, including adding cash-like products as a restricted item; and specify the end date of the cashless debit card trial in Bundaberg and Hervey Bay as 30 June 2020. The Bundaberg and Hervey Bay area provides an opportunity for government to test the card's flexibility as a tool to support people in urban locations and to help address key social problems identified during consultation—in particular, the high youth unemployment, intergenerational welfare dependence and high rates of drug and alcohol abuse and gambling use.

I would also like to acknowledge the recent release by the Australian National Audit Office of its report The implementation and performance of the cashless debit card trial, tabled on 17 July 2018. The department agreed with the ANAO's recommendations and is actively working to ensure there are improvements to procedures and processes, including in relation to risk management, procurement and data collection. The department has implemented changes to improve the way it manages risks, by ensuring mitigation strategies and treatments are regularly reviewed. It is also looking at its procedures and guidance material relating to its procurement practices and developing new approaches to data monitoring and evaluation. This is supported by the appointment of the new role of a chief evaluator within the department. On 15 May 2018 the government also announced a second evaluation of the trial. The department will manage this evaluation, which will be informed by the ANAO audit and experience gained from the first evaluation. The department is currently in the process of putting out a tender to seek a provider to conduct this evaluation. This impact evaluation will build on the baseline data that is currently being collected in the Goldfields region.

CHAIR: All right. We will move on to asking some questions. I have a few technical questions that we will put on notice, but we will need responses back by close of business Thursday, which is the ninth. I'll get those through to you via email, through the secretariat. But we will go to Senator Pratt.

Senator PRATT: I note that the cashless debit card was raised by the Prime Minister during his visit to Tennant Creek this week. Have discussions taken place with any organisations or groups in Tennant Creek about the cashless debit card?

Ms Hefren-Webb : There have been no formal, planned discussions. I think it was last week that the Prime Minister and Ministers Scullion and Tehan were in Tennant Creek. My understanding is some local people may have raised it, but we've had no formal discussions or planned meetings about the cashless debit card in Tennant Creek to date. Our minister, Minister Tehan, indicated that there was some interest, and so we may go meet with local stakeholders to explore that.

Senator PRATT: In other words, you are initiating discussions with stakeholders in Tennant Creek?

Ms Hefren-Webb : That was the commitment that Minister Tehan made—that, in response to it being raised with him, we would have some discussions and test what the community's views were and whether that was one of the tools that they were interested in to tackle the issues that are occurring in Tennant Creek.

Senator PRATT: Has anyone in the Northern Territory approached you seeking information about the rollout of the card and its implementation—in particular, the outcomes in Ceduna and Kalgoorlie and the East Kimberley?

Ms Hefren-Webb : Ms Pattrick, do you have any knowledge of that?

Ms Pattrick : We haven't had any direct contact from anyone in Tennant Creek or the Northern Territory. I believe that Minister Tehan has had some discussions at the local level.

Senator PRATT: Have you made any assessment of the issues that have been raised in Ceduna, Kalgoorlie and the East Kimberley and how they might translate into the circumstances of places like Tennant Creek?

Ms Hefren-Webb : Obviously that's something that would feed into our advice and any policy deliberations. I might just add, the Department of Social Services does not have an on-the-ground presence in Tennant Creek. The Department of the Prime Minister and Cabinet does and it's possible their staff have had discussions about this. So in terms of you asking whether anyone from the Northern Territory had approached the government, they may have approached a different part of the government. We can test that and see if we can get information for you by Thursday on whether it's been raised in the course of various community discussions going on in Tennant Creek over the last few months. If there were further deliberations about the implementation of the card in Tennant Creek, we would, of course, look at the situation there. They already have, as you are fully aware, the BasicsCard operating there. So it would be implementing in a different context again, which would need to be part of the advice that we formulate for government.

Senator PRATT: Can I ask about the Auditor-General's report into the rollout of the cashless debit card and its consideration of the welfare card? How you think those issues translate into the community of Tennant Creek?

Ms Hefren-Webb : Again, the first part of your question dropped off, I'm really sorry. Was it about the ANAO report?

Senator PRATT: Yes, that's right.

Ms Hefren-Webb : The ANAO report would, of course, be one of the factors we would look at around. Were appropriate risks kind of monitored actively, did we have risk mitigation are both things we'll actively take into consideration in all future implementation arrangements.

Senator PRATT: You stated before that there are some conversations now happening now in regards to the rollout of the cashless welfare card in Tennant Creek. Who will be having those conversations with the community? And what information is currently being given to people in Tennant Creek about the cashless debit card?

Ms Hefren-Webb : As I said, there have been no formal consultations or conversations. It will have come up through the course of other work that's happening, including the formation in Tennant Creek of an elders council that has been, I know, supported by the Department of the Prime Minister and Cabinet, to give advice to government on issues in Tennant Creek—what might be policy options, what tools they want to see. So that's the only context in which it's been discussed. Obviously it was raised with our minister. He's committed that if it's something people are interested in, we will come and give them information on it.

Senator PRATT: So are you saying if that elders council asks for information, you will formally then initiate those conversations?

Ms Hefren-Webb : Yes.

Senator PRATT: But as such, that issue of the cashless debit card is not formally on the table with that council yet?

Ms Hefren-Webb : The minister has indicated that it was raised with him. So we are exploring what might be the appropriate way to take that forward, including going and providing further information and initiating further discussions.

Senator PRATT: Can you give us some context about the manner in which the issue was raised with him? Was it raised in terms of people wanting to see it rolled out, people inquiring whether it would be rolled out, or people being concerned it might be rolled out, or all of the above?

Ms Hefren-Webb : I don't have that information.

Senator PRATT: If you could take that on notice, that would be terrific.

Ms Hefren-Webb : Sure.

Senator LINES: Thanks very much. You said in evidence in response to questions that Senator Pratt asked you that the issues have been raised with Minister Tehan. Can you provide a list of who the minister met with.

Ms Hefren-Webb : I will pass that request on to Minister Tehan's office.

Senator LINES: Thank you. I was recently in the Pilbara at a couple of meetings where we were informed that government had had discussions about the rollout of the cashless debit card in the Pilbara. Can you detail to us who you've met with, where those discussions are up to and who is having those discussions.

Mrs Pattrick : We haven't had any recent discussions in the Pilbara. I will need to take on notice and get a list of people, but there are no ongoing discussions in the Pilbara at this stage.

Senator LINES: Can you provide to the committee a list of where else you're having discussions about the rollout of the CDC card—whether they're recent or older meetings.

Mrs Pattrick : Yes.

Senator LINES: I'm just thinking about the ANAO report: was the department aware of the issues that the ANAO report raised before it was published?

Ms Hefren-Webb : The process for an ANAO report means that we're usually kept reasonably well informed of their findings as they proceed through the course of undertaking their work. Where they highlighted issues to us, we took immediate steps to rectify those issues. So, in terms—

Senator LINES: Perhaps I wasn't very clear. The ANAO report has highlighted a number of quite significant process-type issues—and I appreciate you saying that ANAO talks to you along the way—but were department staff raising with you or other officials these issues even before ANAO came into the department?

Ms Hefren-Webb : I've been in this role for 2½ weeks, so I'm not in a position at this stage to indicate. I don't know whether any of my colleagues here have that background, but we can take it on notice.

Senator LINES: The report identified quite significant gaps in the system that presumably your departmental staff would have been aware of and hopefully did highlight. So I'd really want to know that part of it before the ANAO came in.

My office recently did a consultation in Kalgoorlie with people from the Goldfields who were affected by the card, and we did hear some horror stories. One issue which came up—and I think we've asked you this before. You've got a contractual arrangement with Indue to provide particular services?

Ms Hefren-Webb : Correct.

Senator LINES: I think we've asked for that in the past. Have you provided that document in the past either at estimates or other committees?

Mrs Pattrick : Are you referring to the contract with between Indue and local service providers?

Senator LINES: No, I'm referring to the contract between DSS and Indue.

Mrs Pattrick : I would have to check on whether we're able to provide that, because there would be commercial sensitivities.

Ms Hefren-Webb : I think we may have previously provided information about the price and costs—

Senator LINES: Yes, I think you have at estimates.

Ms Hefren-Webb : in the contract, but I don't believe we provided the contract.

Senator LINES: Where DSS is making payments to Indue, does the contract specify how quickly that money is transferred? In Kalgoorlie, people told us that they were expecting money from DSS, and DSS had told them the money had been paid but it didn't show up on the Indue card.

Mrs Pattrick : Are you referring to just the welfare payment or a transfer?

Senator LINES: Transfers.

Mrs Pattrick : Should someone contact our hotline and need an emergency transfer, the process does take a couple of hours, which is a standard banking process. We can do a real-time gross settlement, which takes a couple of hours. The second option is a payment which takes around 48 hours to become available in someone's bank account.

Senator LINES: What's that 48-hour process? What would initiate that payment?

Mrs Pattrick : That's just a standard banking transfer, hence it takes 48 hours, which is standard banking practice.

Senator LINES: So, if you transferred money on a Friday, would you expect it to be available in someone's account on a Monday?

Mrs Pattrick : I would have to check with regard to whether that counts as being business hours. It would depend on the timing of someone's payment—the time of day they requested it—as to when it would hit someone else's bank account.

Senator LINES: I might put some questions on notice. The member for O'Connor, Rick Wilson, has an Indue card. How did he get that Indue card given that he's not on a benefit?

Mrs Pattrick : Members of the public are able to volunteer to get an Indue card. He went through the process of volunteering.

Senator LINES: So why then in the Bundaberg-Harvey Bay trial has he especially said that people can't opt in?

Ms Hefren-Webb : That's a policy parameter that's been determined by the government. The goal is to test a number of different arrangements.

Senator LINES: So the opt-in provision doesn't apply elsewhere?

Mrs Pattrick : You can volunteer in other locations. You won't be able to in the Bundaberg-Harvey Bay region.

Senator LINES: Thank you.

Senator SIEWERT: Just to follow on, could you take on notice the details of what it means when somebody opts in and they've got their own salary? I don't want to go through it now because I have other questions I really need to ask, but can you take on notice how it works?

Mrs Pattrick : Yes, we can.

Senator SIEWERT: Thank you. I'll need to put some questions on notice as well. The claim is often made that the Indue card is just like a normal debit card. When I was in Kalgoorlie, I heard about a number of examples where people have been trying to buy things online and they haven't been able to. They've had to queue for a significant period of time at the Indue office. How does the department explain the difficulty people are having buying things online with the card? And how is it normal for people to have to go into an office to ask to spend their money?

Mrs Pattrick : With online purchases, merchants aren't automatically switched on as they are in physical locations. We have over 2,000 online merchants that are approved. Should a participant want to purchase something that they're unable to and it is not a restricted good, we are able to add that website in a matter of hours so that the purchase can be made. Alternatively, we can also arrange a transfer.

Senator SIEWERT: That's not the lived experience. In terms of the transfer of money, do you mean the experience that you just went through with Senator Lines?

Mrs Pattrick : Yes.

Senator SIEWERT: That takes days. Again, how is this a case of somebody using a card just like you would normally use it?

Mrs Pattrick : As I said, we are able to add websites and we do regularly go through a process of identifying websites which may need to be moved to the approved list.

Senator SIEWERT: Could you take me through the process of how the Indue officers are working? In each of the locations, there's an Indue office. That's correct, isn't it?

Mrs Pattrick : Indue contracts local organisations to provide that face-to-face service.

Senator SIEWERT: But each one has that centre?

Mrs Pattrick : Yes.

Senator SIEWERT: So where is it going to be in the Wide Bay trial or the Hinkler trial?

Mrs Pattrick : We haven't yet established where the local partners, as we call them, would be. That's something that we would work through with the community reference group, around identifying who would be best placed to provide that service.

Senator SIEWERT: Will there be one in each of the centres?

Mrs Pattrick : I would imagine so, but at this stage, as I said, because we haven't had that discussion, I can't guarantee that there would be one in each.

Senator SIEWERT: Could you take on notice to provide an up-to-date list for the existing trials of who those partners are that are providing the service. Also, do you have a copy of the contract with those partners? In this instance, I'm particularly interested in the level of service that is provided at those centres. I'm told in Kalgoorlie people have been waiting hours to get face-to-face interaction. So are there service agreements? Are there agreements around the provision of servicing, how many hours, how many staff people will employ and all those issues? Are they covered by the contract?

Mrs Pattrick : The contract is between Indue and the local organisation. We would be able to provide you details on what services those local partners provide and the hours of operation, if that's what you're after.

Senator SIEWERT: That would be helpful. If you could provide that, it would be appreciated. Do you require Indue to require their service partners to meet certain quality standards of service?

Mrs Pattrick : I'd have to take that on notice. I'd have to check that with Indue.

Senator SIEWERT: That would be appreciated. If you could take on notice to get those other details that you have got—

Mrs Pattrick : Yes.

Senator SIEWERT: Can I ask, then, about the issue that we were talking around about NILS and access to people's statements. I'm sure that you heard the evidence that we got this morning around the NILS process and the need to provide bank statements and then the provision of those bank statements to third parties and not being able to access them potentially for NILS loans, for example.

Ms Hefren-Webb : We didn't hear that direct evidence, although I think some people in the team did. Was the nature of the issue about having trouble organising loan repayments via the card? Is that the issue?

Senator SIEWERT: No. That is an issue, but this specific issue was about, when they're providing NILS loans, they need to look at someone's expenditure history and so they look at bank statements. There's an issue about third parties accessing the bank statements from Indue.

Mrs Pattrick : I'd have to look into that one, sorry.

Senator SIEWERT: Could you then take that on notice and maybe look at the evidence to address the evidence, but the broader issue is the provision of the information to third parties.

Senator PRATT: By way of clarification, it's been put to us there's no access to statements for third parties. I can see online on the Indue app that it should be possible to download a statement.

Mrs Pattrick : That's correct.

Senator PRATT: I would like to see what level of detail is available through such a statement to see if it would meet the requirements of NILS loan providers and any other person from whom someone might be looking to get a loan.

CHAIR: Can you hear us?

Ms Hefren-Webb : We can hear you. Can you hear us?

Senator SIEWERT: Brilliant. Okay. The other issue that we heard—and this is a direct example—was that, for somebody's car repayments, the finance company doesn't take payments the way Indue makes payments. In other words, they're not going to be able to make their payments from the 80 per cent. Have you come across those issues? Could you look at the evidence—and, if you've got an answer now, that would be great. If not, could you take that on notice.

Mrs Pattrick : Are you referring to a direct debit?

Senator SIEWERT: Yes.

Mrs Pattrick : The car company can't take the direct debit. Direct debits are able to be made using the card number. At this stage, you're unable to do direct debits using your bank account number. For those circumstances, if a participant contacts the hotline, we will arrange to set a higher transfer limit to allow for that car payment.

Senator SIEWERT: Would that then be able to happen as a one-off, or do they need to contact the hotline—

Mrs Pattrick : No, we would be able to set that up regularly.

Senator SIEWERT: Could you just explain the higher limit. I'm sorry. I don't get the connection between the card number and the account number and the higher limit.

Mrs Pattrick : Recognising that not everything will be able to be paid using the card—for instance, if someone's paying rent that won't accept a card payment or won't accept BPAY or Centrepay—we are able to set a transfer limit for that person so they can transfer the funds out themselves.

Senator SIEWERT: Okay. I didn't realise that's where you were going. It was a direct transfer for somebody to be able to do it.

Mrs Pattrick : Yes.

Senator SIEWERT: Okay. Thank you.

Senator LINES: Does that mean that, if someone has excess water and is paying their rent via cashless debit, they can't pay the water bill by that direct debit arrangement unless they talk to you?

Mrs Pattrick : You're able to do a direct debit with the card number, which most people are able to do. Should, for some reason, the electricity company not allow for a direct debit via the card number, they hopefully would be able to pay by an alternative method such as Centrepay.

Senator LINES: What about a water bill to the real estate agent? That couldn't be done, because there was a limit set.

CHAIR: The limit can be changed.

Senator LINES: Not without calling.

CHAIR: Yes. We do really need to wind up. I thank all of our witnesses today. That concludes today's hearing. Thank you all very much.

Committee adjourned at 11:33