Australia’s Cashless Welfare Saga Has a Sad Conclusion
In Australia, the controversial trial of benefits payments that quarantines up to 80 percent of a person’s welfare money onto a card that does not allow cash withdrawals, and cannot be used to buy certain products and services, looks likely to become permanent. The government is now seeking to nearly triple the number of people on the program, despite fewer than 10 percent of Senate inquiry submissions backing the move.
The so-called ‘cashless welfare cards’ are intended to combat social ills such as alcoholism, drug use and gambling by locking away most benefit money to be spent only on approved items. One problem with this is that is also locks people out of the local cash economy, meaning they cannot use common money-saving tactics such as buying items second-hand at garage sales or fetes, or getting bargains at local markets.
Giving evidence to the Senate inquiry on the cashless welfare bill, trial participant Miss Silk explained that many of her budgeting tactics rely on ‘trust, cash and community support.’
As a person who budgets every dollar I spend, I, as do many others in the community, need cash to make ends meet so I can shop online on Gumtree or Facebook, on buy or swap sell sites, at garage sales on the weekend, at markets, at cash fares and at family events.
A review of 132 submissions to the Senate inquiry—calling on academics, charities and representatives of Indigenous groups—found that around 90 percent were outright opposed to, or had major concerns about the plan.
In an Australian parliamentary report, it is noted that Labor Senators are of the view that cash plays a vital role in the local economy, and that restricting people’s access to cash could jeopardise their ability to participate in their community. They also observe that low-income individuals will be particularly affected, since they ‘use cash to access cheaper goods and services than they may otherwise be able to.’
12,000 people trialled the cashless welfare cards—with the arrangement now on the brink of becoming permanent—and the government is seeking to add 23,000 more in the Northern Territory and Cape York. While there are reportedly no immediate plans for a national rollout of the scheme, Prime Minister Scott Morrison has indicated an openness to the card being expanded to more people, especially those in younger age groups.