It’s not too often I give higher praise to governments for coming up with solution to a massive problem, but I think they might have absolutely nailed it here.
I’ve got to say, I think it was Andrew Forrest who came up with this idea but it needed a government to implement it and it has started today. I am talking about a cashless welfare card.
A trial is underway in South Australia. It starts today and it could spread to the rest of the country - cashless welfare cards.
Alan Tudge is the Human Services Minister and he joins me on the line now. Alan, good afternoon. Can you talk us through how this will work?
G’day Ben. Well the concept is relatively simple.
Instead of providing welfare payments into a person’s ordinary bank account which they can then access as cash, what we will be doing is placing 80 per cent of people’s welfare payments into an account which is only accessible via a Visa debit card.
This Visa debit card looks and works like any other Visa debit card, with one exception - it doesn’t work at the bottle shop; it doesn’t work at the gambling houses; and you can’t take cash from it. Consequently you can’t purchase illicit substances.
The overall objective of course is to try to reduce the very significant harm which welfare-fuelled alcohol, drug and gambling addiction can cause.
I think this is an absolutely sensational idea.
We are living now in a pretty much cashless society. I can count on one hand how much cash I have on me in a period of a month – and I probably don’t need my thumb to count that many times.
The problems that you spoke about - bottle shops, gambling and drugs as well – you take cash out of that and I think that makes a big, big dent in that problem.
There are going to be people who say, well, cash is king. What if I do want to use cash? I’m not into the drugs, I’m not into alcohol, I don’t gamble. How am I being penalised for this?
My argument to them is, you’re not being penalised.
If you are a responsible person – you’re not a drinker, you’re not a gambler, you’re not a drug taker – then really, the only impact there will be on you is instead of reaching into your pocket for cash to pay for something, you’ll reach into your pocket, grab your card, swipe it, put in your pin [inaudible].
The potential community impact of everybody being on a card and there being less cash spent on gambling, drugs and alcohol is enormous.
Particularly in some communities – and you would know them Ben – where you have very high assault rates, very high domestic violence rates, and often they are driven by alcohol particularly and often exclusively paid for by the welfare dollar.
It is starting in Ceduna. We are talking out west of South Australia. How long is the trial going to take?
The trial is going to be one year long, kicking off today, with the first issuing of cards being sent to people.
The other aspect of the trial though Ben, which is important, is that firstly you have the card – which we’ve talked about – but secondly, we’ve put in place additional drug and alcohol services and financial counselling services.
The card will reduce the amount of cash available for alcohol and then you’ve got the services to help people get off their additions, should they be addicted.
The combination, we think, is a full frontal assault against the welfare-fuelled alcohol and drug abuse which unfortunately is pretty prevalent in that community, as it is in many communities across Australia.
Alan Tudge is the Human Services Minister. It is a trial that is being rolled out in South Australia. Could it go nationwide?
We are doing a trial in three sites initially and then we will make decisions about what we might do subsequent to that.
Already though I’ve had community leaders from different regions across Australia who have called out to me and said they would like to consider introducing cards in their community.
Others have suggested it could be a terrific model to support younger people to get into work or an encouragement to get into work.
We haven’t made any decisions, we’ve only made the decision to trial it. We want to see how it goes, then we will make subsequent decisions after that.
What about the loopholes? Have you thought about how people might try and rort the system?
The moment you bring something in, people try and get around it. I’ve been putting my mind to it. The one I come up with is actually using it to buy gift cards – like a Coles Myer card and then you can get the grog from Liquorland – that type of stuff.
Inevitably some people will try to get around the system. We’ve thought through all the various combinations where people might do that.
Trading of the cards will probably occur with some people but because all income support recipients will be in receipt of the card there will be a lot less cash available in the community to be able to do such trading.
Furthermore, if you do such a trade, inevitably you are going to be penalised in the process.
You’ll buy something for $100, then you’ll only be able to sell it for $50. Consequently you will have a $50 penalty doing that.
This isn’t going to be the panacea for every single problem but we hope it will have a dramatic impact on some of those very significant harms in the communities of Ceduna and elsewhere in the country.
Hope you are right Minister. I think it’s going to be an absolute game changer if you ask me. Appreciate your time this afternoon. Alan Tudge there who is the Human Services Minister.