Cash Empowers Welfare Recipients

calendar iconNov 16, 2020


At a time when welfare payments are increasingly shifting from vouchers or cards to cash handouts, the Australian government is taking the opposite approach. Cashless welfare cards—which ringfence up to 80 percent of money for spending on approved items, and cannot be used to withdraw cash—are moving from trials to longer-term use in several areas, despite concerns that they may do more harm than good.

With cash, people on welfare are financially empowered. They can save money by buying items second-hand, they can get bargains at local markets, and they can reliably budget for and pay their rent. Australia’s cashless cards remove these options, and are reportedly causing late rent payments due to the added involvement of the company running the scheme, Indue. These, and other aspects of their deployment, mean the cards are proving controversial.

In The Age, Rachel Siewert observes that responsible spending of taxpayer money means investing in programmes backed by solid evidence, regularly reviewed and improved, and providing demonstrable value for money. In her view, MPs have failed to accept this responsibility when it comes to the matter of cashless debit cards.

The cards were introduced at trial sites in Ceduna, East Kimberley and the Goldfields with the stated objective of addressing addictions to drugs, alcohol and gambling. When the trial spread to the Hinkler region a few years later, the government then said the cards would tackle ‘intergenerational welfare dependence’ and youth unemployment.

Siewert notes that—aside from this confusion—calling the rollout a ‘trial’ at all is misleading. The word suggests something happening for a finite period, and is then assessed. The cashless card ‘trial’ has simply continued, despite negative feedback and a lack of positive evaluation.

Addiction is incredibly complex and most experts will tell you that an addict will find a way to get the substance they want with or without restrictions on access to cash.
"Rachel SiewertGreens Senator for Western Australia

Income management has been trialled previously, as part of the notorious Northern Territory Intervention, and the final evaluation showed The Intervention had not met its objectives. Similarly, the Australian National Audit Office says of the cashless debit card trials: ‘It is difficult to conclude whether there had been a reduction in social harm.’

Evaluations funded by the government have not demonstrated the card is achieving its objectives, and the evaluations themselves—by ORIMA, a provider of end-to-end research and data analytics, and the University of Adelaide—have been criticised by academics for failing to collect baseline data for comparison, leading to ‘extremely misleading’ conclusions.

The card makes people's lives harder because living below the poverty line very often means relying on cash economies.
"Rachel SiewertGreens Senator for Western Australia

To genuinely address disadvantage, Siewert calls on the government to fund programmes proven to work, such as early-intervention efforts, addiction and mental health services, and lifting people out of poverty by raising JobSeeker benefits above the poverty line.

Cash is democratic and inclusive, and it empowers welfare recipients to make budgeting choices and participate in their local economy. Opponents of the cashless welfare card are hoping to see this recognised in a revision to, or scrapping of the scheme.

Last Updated: Nov 16, 2020