Why The Cashless Debit Card Doesn’t Work

Australia’s cashless card could become a permanent system, even though it’s been widely criticised for being ineffective and for unfairly targeting First Nations people.

So, if the card doesn’t really work, what could be some better alternatives?

What Is The Cashless Card?

The cashless debit card dates back to 2007 when the Howard Government introduced a new income management policy in the Northern Territory.

The general idea was that anyone who was getting paid social security was put on a compulsory card that would manage what they could and couldn’t spend money on – like alcohol, tobacco and gambling.

The Abbot government then decided to bump up the system to a cashless debit card that controls 80% of people’s security payments.

Why It Actually Does More Harm Than Good

Since 2016, the card has been trialed on people who receive support for disability, unemployment, caring, or Youth Allowance, across rural towns in South Australia, Western Australia and Queensland.

Elise Klein: “That’s a really big group of people to be targeting for many different reasons and using this very blunt tool that has this assumption that you can’t manage your money properly.”

That’s Dr. Elise Klein who spent time in East Kimberley studying the effectiveness of the card and found that it’s actually making life more difficult for those using it.

EK: “Someone said to me, ‘this is just like going back to the rations days’ … You can only take out 20% of cash and cash is really important for people – particularly in remote and regional economies – [where you need] cash to buy all sorts of second-hand goods or veggies from the store.”

The card is supposed to reduce levels of things like unemployment, alcohol abuse and domestic violence but that just hasn’t happened.

Instead, payment restrictions have been linked to a whole range of impacts that are hitting First Nations people the hardest.

How Does It Unfairly Target First Nations People?

There are roughly 21,000 people on income management in the Northern Territory and 83% are Indigenous.

John Paterson from the Aboriginal Peak Organisations Northern Territory, argues that the card denies First Nations people the basic freedom to control their lives.

The card is also seen as just another way state and federal governments are undermining the national agreement on Closing the Gap, which is already controversial because it unfairly frames data negatively, from a place of lack or deficit.

EK: “If you see the cashless debit card it’s grey, but it’s called a white card because it’s another thing that white people have done to First Nations people.”

There Are Better Solutions

People like Dr. Klein and John Patterson are calling on all MP’s to oppose the bill that’s trying to make the card permanent, so that First Nations people aren’t locked to a poverty line.

Right now, only 10 out of 123 submissions to the Senate Inquiry actually support the card, and there’s been a real push to divert the millions spent on the cashless debit card system to fund other services.

Like investing in face-to-face Centrelink support that is dying out in rural communities; offering more drug and alcohol and trauma programs; and well the obvious one: creating more jobs.

EK: “This story around it’s people’s behavioural issues that are causing people to be unemployed has to stop and we really have to push back against that. What we know is that people who are on such low incomes are actually doing an extraordinary job of managing money. To be able to live, survive and to provide for family on such low income that is purposefully set by the government, is a huge feat in itself.”

The Takeaway

Australia has a long history of stigmatising welfare recipients, and making the cashless debit card permanent would reinforce that stigma.

Research suggests the card is not only ineffective but also unfair, which isn’t really a great foundation for a system that is supposed to be all about supporting the people who rely on it.