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Tuesday, 13 October 2015
Page: 7499

Senator LUDWIG (Queensland) (17:46): I rise to speak on the Social Security Legislation Amendment (Debit Card Trial) Bill 2015. This bill will amend the Social Security Administration Act 1999 to enable a trial phase of new, cashless welfare arrangements. Under the trial, welfare recipients will have a proportion of their payments credited to an account that they can only access using a restricted debit card. The trial, as outlined, will extend across three locations, involving up to 10,000 people.

These changes come as a result of the Forrest review that was conducted a short while ago, which found that the current income management system was economically unsustainable and unsuitable for broader application. When income management was first implemented by the Howard government, the scheme that was put in place—that is, the first scheme—suffered from the same thing: it was economically sustainable and unsuitable for broad application. It was a detailed methodology used by the then Howard government to income-manage individuals during the Northern Territory intervention. It was clunky in the extreme; it required significant numbers of personnel to operate the system and work with the communities to ensure that it at least worked in the way that it was designed; and it left no room for growth in the system.

Ultimately that was replaced by the BasicsCard, which is well known now across the Northern Territory and in other locations. The BasicsCard served the purpose of overcoming the limitations that were inherent in the system that was implemented by the Howard government in the Northern Territory intervention. In line with technology updates, we now have a new scheme, a debit card trial, that will hopefully prove more economical, sustainable and suitable for broader application, as outlined by those opposite in their second reading debate contributions.

There are, on this side, some concerns about how it will operate, and they have existed throughout the history of income management more broadly. The previous speaker tried to indicate that it is not income management. If it is not income management, it is a form of welfare assistance that could be more broadly or generically described as managing incomes rather than dealing with problems in a more nuanced way.

The trial locations will be selected based on where there are high levels of welfare dependence and where gambling, alcohol abuse or drug abuse are causing unacceptable levels of harm within the community. I think that alone describes the issue—that you intend to income-manage those communities to avoid those levels of difficulty. Of course, a high level of community support is always a key factor in determining trial locations. The card itself will not allow cash withdrawals for purchases of alcohol or for gambling services.

Subject to the passage of the bill, the first trial will commence next year, as I understand it, in Ceduna, South Australia, and surrounding areas. On 4 August, community leaders in the Ceduna area signed a memorandum of understanding with the government, to trial the card in Ceduna. As I said, obviously you need a high level of community support for such a trial to proceed. You need to give an explanation of how it will work. You need a broad level of government support in that initial trial to ensure that it is successful. I have doubts as to whether the government will provide that complete level of support that is needed, but I will wait to see the final outcomes of that trial before being so bold as to criticise the government at this juncture. The arrangements will apply to all people on working-age payments, including Newstart, disability support and carer pension recipients who reside in the trial locations. Age pension recipients and wage earners may also voluntarily nominate to have the debit card. It is also understood that the government is in further discussions with two other communities across Australia that may wish to take part in the trial.

In doing that based on location, the government should proceed carefully and ensure that it is appropriate to offer the debit card to all those within that trial location who fit the description, because it appears there is no opt-out provision. The government must ensure that those persons do require or should have the card, and that there are no objections—because objections are always very difficult to deal with, post a rollout.

Initially, 80 per cent of participants' income support payments and 100 per cent of lump sum payments will be restricted. However, the minister or a community body may vary the percentage of a person's payment that is restricted. In doing that one would hope that procedural fairness is provided for and that a reasonable process to ensure fairness is provided to a person who may find that the percentage has changed—increased or decreased as the case may be. Participants will receive a cashless debit card that will work as similarly as possible to any other bank card. I commend that. I think it is a good process to move to a debit card that is indistinguishable from any other payment system that is used, and that it is used in a way that ensures that the user of the card is not identified by the card itself. The trial will seek to ensure that the card works at all terminals and retailers, except those that exclusively sell restricted products. There will be no requirement to direct funds to priority goods and life's essentials. It is essential to ensure that issues are managed, so that where the debit card does not function participants understand why it is not functioning, or that where there has been an error at an ordinary location the sales assistants also understand what to do. A certain level of support needs to be provided to ensure the trial does have a fair opportunity to be successful.

It is clear that action is needed to tackle alcohol abuse and excessive gambling and the harm they cause in some communities. That has been obvious for some time. Labor believes that targeted income quarantining can be a useful tool in supporting vulnerable people; however, in saying that, such an approach requires a range of responses and support services delivered in close consultation with communities. The government does need to be mindful that in implementing this new technology—although it may be old in some respects the EFTPOS system is ubiquitous; it has been around for some time—and using it to tackle the issues of alcohol abuse and excessive gambling it must draw heavily on the past experiences of the Department of Human Services and the original intervention by I think it was then minister Mal Brough with the Northern Territory intervention to ensure that there is sufficient support for persons who have the trial card.

In saying that, a card itself will not solve the issues. It is the support and the case management of individuals that will go a long way to breaking the cycle of alcohol abuse and excessive gambling. Labor did push for a Senate inquiry on the bill to allow the impacts of the trial to be thoroughly explored and give affected communities the opportunity to make submissions. Labor does believe that welfare quarantining should only apply to vulnerable people who meet certain criteria rather than to all people within a particular location. We must ensure that the measures proposed in this bill are not discriminatory and that they meet community expectations. I remain less convinced that the government has taken this issue to heart to ensure that it does act in a nondiscriminatory way and does meet community expectations. But the trial, if the government fails in this area, will highlight that more broadly.

I know the government does not think this is the same as income management, but I think it is apposite to say that under the existing income management scheme a proportion of a recipient's income support payment is set aside to pay for necessities such as food, clothing, housing and utilities. Recipients can spend their income managed funds using a PIN-protected debit card, which is still known as the BasicsCard, or by arranging for Centrelink to make payments on their behalf. The major issue that exists with the BasicsCard is, as I think I outlined earlier, that a merchant must apply to the Department of Human Services to accept payment and it is the merchant's responsibility to block purchases of excluded goods such as alcohol. In saying that, the BasicsCard did well in moving away from what was an overly regulated, burdensome and cumbersome process, and of course the new restricted debit card system will address several problems identified with the existing BasicsCard. It will also not have the costs associated with administering the BasicsCard, which is not affiliated with any payments provider. The debit card will also do away with the perceived stigma associated with the BasicsCard, which clearly identified recipients as income support recipients.

Existing income management arrangements have been rolled out in conjunction with a range of support services, and this is the point I was making earlier—support services are where you make the major advances; you will not find the solution in the card itself. The card is just a tool that will assist. What we do need, and we remain unconvinced about whether the government has provided it, is sufficient individual support and support services to make sure that the system is successful. Success will be measured not by how the card has operated, not by how many transactions the card has successfully processed, not by how many errors the card may have caused; it will be measured by the change in the community in response to both the support and the tool, the card itself. We hope this arrangement will lead to a much better community in the longer run. That will be harder to measure for, and during, the trial, but it is something that the government should spend some time considering in order to ensure that the trial, and not simply the card, is a success

Unfortunately, additional support services will not be provided in the trial areas as part of the debit card trial. Debit card participants will also miss out on the additional support from Centrelink that is provided to income management participants. I think that the government is being a little duplicitous when it says that this is not income management so we therefore do not have to have support services and Centrelink and that the debit card will operate effectively on its own and do its job. The question is: what are you trying to achieve? The job is to move community expectations from where they are now, dealing with drug and alcohol abuse and gambling abuse, to where you want the community expectations to be—that is, a much better environment for the raising of families in those communities. In not providing those additional support services, I think that the government has missed a great opportunity to ensure that the card is a successful implementation of the strategy. The objective of the strategy is to move the community to a much better place.

In my view, those opposite need to consider the complexities of breaking the cycle of alcohol abuse and excessive gambling. The debit card—as I have underlined—will not offer a standalone technological fix to what is ultimately a social issue. The government needs to consult with affected communities and listen to their concerns so that this becomes a process and a feedback loop, and not only during the trial. You may want to ensure the success of the trial, and you will need to ensure that it is monitored and reviewed as well as that the lessons from that trial are learnt. In addition, those affected in these communities will require financial counselling services, they will require early childhood and community safety services and they will require substance abuse services. Without those services being provided, I cannot see how such a trial will demonstrate that it is making a substantial difference to that community.

It is of concern that the trial does not allow participants to seek an exemption or to be excluded from the trial. Therefore, if a person is identified as a compulsory participant, they will have their payments restricted regardless of their level of vulnerability. Existing income management participants are identified through a range of triggers, including child protection notification, length of unemployment, young people at risk and people on prison release. Labor simply does not believe in the blanket use of income management. Labor is aware that the vast majority of Australians receiving income support are more than capable of managing their own income. We are, however, committed to ensuring that welfare payments are spent responsibly and in the interests of individuals and, particularly, children. That is why income management should be targeted towards those that are most vulnerable within the community.

I look forward to reading the report of Senate Community Affairs Legislation Committee. This inquiry has allowed for the impacts of the trial to be thoroughly explored and for people who will be affected to have a proper say. Labor will continue to engage with the communities that will be affected by the government's proposed trial and will take the opportunity of listening to their concerns. What are required to curb the surge of alcohol, drug and gambling dependence are, in truth, community based initiatives which engage with persons, including with those most vulnerable in the community, and which provide assistance and support when it is required. That can be done alongside such a payment card as this, should it prove to be a useful tool in supporting those outcomes. The card should not be the final solution in and of itself; it should be able to be utilised in a way that supports those initiatives that I spoke about.

I doubt that the government have taken much of that on board. They seem to be clear that this is not income management; it is a technological solution and an improvement on the BasicsCard. They are all arguments to be had about the card but not about changing community attitudes, changing community social norms, ensuring that our children can grow up in a safe environment, and assisting in resolving community excesses around alcohol abuse and drug dependency.