Cashless Welfare Hotly Contested in Australia's Election

Australia’s opposition party is committed to ending the nation’s controversial cashless welfare scheme. A Labor spokesperson said last week that people should be free to use their welfare payments as they wish, and the party will make the cards optional should they win the forthcoming election.

The current system sees between 50 and 80 percent of an individual’s money loaded onto the ‘basics card’, which is not accepted by all businesses and cannot be used to purchase items such as alcohol or gambling products. The money also cannot be withdrawn as cash.

Criticisms of the scheme include the stigma and stress it causes participants—who are obliged to pay for their shopping with a card that clearly marks them as welfare recipients and limits their spending options—and that the cards lock them out of the cheaper local cash economy of smaller stores and markets.

One incident that sparked outrage across the nation occurred in December 2021 when Maningrida—an Aboriginal community in the Northern Territory where many people have the basics card—lost internet access, leaving card users unable to buy food and other essentials.

Government data shows there are over 24,000 people on the basics card in the Northern Territory, with only 2,400 of those using the card voluntarily. The vast majority were placed onto it after being classified as long-term unemployed or ‘disengaged youth’.

Three studies have shown that the stated goal of ‘reducing social ills in areas with high welfare rates’ has not been achieved with the cards, which had ‘no substantive impact’ on gambling or drug and alcohol abuse. Research from the University of Adelaide, commissioned by the government, also raised concerns that some criminal activity may have actually increased, linked with fraud and exploitation of older people.

Cash assistance is transparent for the provider—with easily-defined spends, and no hidden costs—and allows recipients privacy, dignity, and choice over where and what they purchase. The idea that cash enables criminal behaviour has been debunked by both general studies and work specific to the regions of Australia in question.