Transcript: Weekend Sunrise, Channel 7

9 April 2016

The Hon Alan Tudge MP

Minister for Human Services
Topics: 
Cashless debit card trial
E&OE

ANDREW O’KEEFE:

Now the issue of welfare has been a hot topic this week. Figures released by News Corp show almost a quarter of dole recipients have skipped job interviews or rejected work.  Almost 300,000 jobseekers have had their payments suspended as a result.

ANGELA COX:

At the same time the trial of a cashless welfare card has begun in Ceduna in South Australia. Eighty per cent of benefits are paid directly to the card, which can’t be used for alcohol, drugs or gambling.  The Mayor Allan Suter pushed hard for the card.

ALLAN SUTER:

A big beneficiary will actually be children, because some children suffer due to lack of money to buy the necessities of life because of these addictions, which are really a disease. If you’re spending more than 20 per cent of your income on drugs, alcohol or gambling, you’ve got a problem and you need some help.

ANDREW O’KEEFE:

But critics say the cashless welfare cards are a breach of human rights and in other places haven’t fixed the problems in the community.

LEEROY BILNEY:

Where is the evidence that is proving that by controlling people's funds is going to stop addiction, whether that be drugs, gambling or alcohol? And what does that do to any individual, any human? It takes away their own confidence, their own ability to live normal within a society, no matter who you are.

ANDREW O’KEEFE:

That was indigenous leader Leeroy Bilney who grew up in Ceduna. To discuss this we're joined by our panel of experts - Human Services Minister Alan Tudge, Greens Senator Rachel Siewert and Radio 2GB's Chris Smith. Good morning to you all.

Alan, you are charged with overseeing the roll out of the cashless welfare card. What has driven this? Has this come from community concerns or is this something Government has said we think we know the answer?

MINISTER TUDGE:

This came out of a review done by Andrew Forrest and he recommended the introduction of a welfare card which can be used anywhere to purchase anything but simply won't work at the bottle shops, at the gambling houses or be able to withdraw cash from it and consequently you can't purchase illicit drugs.

I have been overseeing the implementation of this, and we are trialling it in two or three locations, which began this month, the first one being in South Australia and a future one being up in Western Australia. The overall objective of this Andrew, is to reduce the very significant social harm which is caused by welfare-fuelled alcohol, drugs and gambling abuse.

Unfortunately in some communities that is very prevalent and it leads to not just harm to the individual, but it leads to tremendous rates of violence against women. It leads to children not being fed, even though their parents might be getting welfare payments specifically for that purpose.

ANDREW O’KEEFE:

I don't think anyone would argue with the objective on that one.

ANGELA COX:

Chris, what are your thoughts? Do you think this is fair enough that people getting welfare should be dictated how they can speak the money?

CHRIS SMITH:

Yeah, I think in targeted areas this is exactly what we should be doing. Bear in mind, both major parties have been behind this. I know Tony Abbott was very much for the idea, he’s very supportive of Andrew Forrest who understands the social problems in various secluded areas like Ceduna.

So is Jenny Macklin for the ALP. She was very supportive of this as well. I think we have to realise in this country, OK, we have a very generous welfare system. But it's not a right. It's a privilege.

This is not about human rights to decide what to do with your money. You haven't earned that money.  This is taxpayers’ money, this is Government money and they are the ones who decide how you use it. I think this is entirely where we need to go into the future.

We have got almost 50 per cent of the population on some kind of welfare now. I think we have to take it and make sure it is used more effectively and in particular, there are children in various communities who will benefit from this, probably more than those addicted parents who we are trying to get off their addiction. I think the kids are going to benefit from this more.

ANDREW O’KEEFE:

That is the bipartisan hope. And as we said before, I don't think many people would disagree with the objective of the cashless card. Rachel, The Greens say that that objective won't be met because it's being trialled elsewhere and it hasn't worked. Talk us through that.

RACHEL SIEWERT:

I agree that addressing issues around drug addiction, gambling are all issues, and alcohol abuse which is of course the most significant, a very significant issue across Australia. The point here is that this is income management. Whether the Government likes to call it that or not, it is income management.

And we have had that going in the Northern Territory since 2007. The final evaluation of that carried out in 2014, showed that that policy had met none of its objectives. So we have still got significant drug and alcohol abuse and gambling in the Northern Territory. The difference here is it going to be 80 per cent instead of 50 per cent.

Controlling people's spending does not address the very serious issues of addiction. We need a very different approach and using inflammatory language like 50 per cent of Australians are on some form of welfare support, you are talking about people who get Family Tax Benefit. You are also implying that it's only people on welfare that are suffering from alcohol abuse, drug abuse and gambling.

CHRIS SMITH:

No, but, if we are spending half of our income, if we are spending, 50 per cent of the population receives some kind of welfare, surely the taxpayer and implicitly the Government has a right to work out how that money is used.

RACHEL SIEWERT:

That is just simply not right. We are not living in a dictatorship. We have a social security system that supports the most vulnerable people in our community, it does not justify the Government in telling people how to spend their money.

People on income support, people on Newstart, are living below the poverty line. They are some of the best money managers in this country because they are having to survive on money that is below the poverty line.

ANDREW O’KEEFE:

Minister, could I just bring you in here. You know, a couple of the potential problems with this, it seems, is that number one, these things always seem to be rolled out in Aboriginal communities when we know there are many other people who don’t live in Aboriginal communities who suffer from the same problems of drug and alcohol abuse, long term unemployment et cetera.

Secondly, has it been created in consultation with those communities because we also know that programs for Aboriginal communities that aren't created with Aboriginal communities tend not to work.

MINISTER TUDGE:

A couple of points Andrew, firstly this is not an indigenous specific measure. The two trial sites which we have already identified have a higher indigenous population but it applies to all people on welfare benefits. Our third trial site which we’re looking at is predominantly non-indigenous – 90 per cent non-indigenous, 10 per cent indigenous - that's the first point.

The second point is, and I will just come back to Rachel's comment, this is not telling people how to spend their money.  This is taxpayer money being provided to people for their shelter, for their food, for their clothing, for their everyday expenses.

And the only thing this card does is it restricts 80 per cent of their welfare payments from being spent on booze, from being spent on gambling or on drugs. Otherwise this card will work like any other ordinary Visa debit card, in literally every single store in the country, to purchase whatever you like but you simply can't spend more than 20 per cent of your welfare payments on alcohol, on drugs or on gambling.

We think this is a measure worthwhile trialling in these couple of communities because at the moment, we know there is enormous social harm caused by welfare-fuelled alcohol abuse particularly where women are getting bashed at extraordinary rates, where children are not being fed despite the fact that we are providing enormous amounts of benefits to those individuals.

ANGELA COX:

Rachel can I ask you, in what case do you think you need to be spending more than 20 per cent of your pay cheque on alcohol or gambling?

RACHEL SIEWERT:

It's not about whether people are spending their - that's a false argument. The argument - the discussion here needs to focus on the fact that this is a top down decision approach where people feel the decision is being taken out of their hands and people that are living on Newstart or on DSP, because this also applies to people on disability support pension, often use more cash because they participate, they need to make sure they are budgeting their money, so for example they are more likely to go to markets.

They are more likely to use op-shops that don't have eftpos facilities. They are also having to pay to use some of those eftpos facilities. Just yesterday, I was with somebody who was charged $1…

MINISTER TUDGE:

That's not right Rachel, that's not right. So the first trial site where we’ve done this is in Ceduna in South Australia, and we’ve worked with every single merchant in that town to ensure that the fees aren't being applied. The second point I would make, even in the op-shops in that town, we have provided an eftpos machine to the op-shop who didn't have one so that they can in fact receive payments from the card as well.

Furthermore, if somebody needs further cash, they don't think that the 20 per cent cash is enough, they can apply to a local panel and have the amount of cash increased if they can demonstrate that they need it to send their kids to school, and the like.

We have thought those things through. This has been co-designed, back to Andrew's point, with the community leaders in that community. They have been across every single element of this trial so we can get it right. We have put in place additional drug and alcohol services to help people get off their addictions. This is a full scale assault against those problems in that town. We hope it will work.

ANDREW O’KEEFE:

That's an interesting point. You talk about the assistance, the wrap around services being provided to the community, along with this sort quarantining of cash. If we get to the end of the trial and we think we are seeing some success here, how do we know whether it's the card or the wrap around services that have made the difference? Rachel, what are your thoughts on that?

RACHEL SIEWERT:

This is one of the very serious concerns, I think the Minister was presenting information that wasn't quite correct there. But we will come back, it certainly isn't the same in towns like Geraldton where they’re trying to foist this on to Geraldton. In terms of the success of the wrap around services, which I totally support, they’re absolutely essential and they should be provided in communities around Australia.

We don't have a comparison between a town that is just getting the wrap around services and Ceduna for example that is having the card and the services. The services make all the difference to people, having those wrap around services are absolutely essential but we won't know what has been successful, whether it has been the card or the services because the point is, in the Northern Territory, this approach has not worked.

CHRIS SMITH:

Can I say one thing, one final thing on behalf of taxpayers, I think the Minister is wrong - it is financial planning being controlled by Government. It absolutely is, but I have no problem with that, because too much of our money is going into welfare services. Per capita, we’ve got to pull our head in, and if it means at the same time we can look after those communities that are in danger of addiction or in danger of abusing children or whatever, if we can do something to make that dollar, that spend more effective, well I’m all for it.

ANGELA COX:

You don't think it's patronising…

CHRIS SMITH:

Yes it’s patronising but it's not money earned. It's our money and the Government is allowing our money to be put into the hands of other people who don't earn it. I think we have a right to have a say.

ANDREW O’KEEFE:

What percentage of our GDP is spent on the dole?

MINISTER TUDGE:

At the moment the welfare expenditure is about $154 billion per annum which is about a third of the overall budget.

ANDREW O’KEEFE:

But specifically talking about people on unemployment benefits, how much is that?

MINISTER TUDGE:

Unemployment benefits is about over 600,000 people on unemployment benefits. I can't remember the exact figure that is spent on that.

RACHEL SIEWERT:

The problem here is if you look at the evidence, this is what we need to keep coming back to. If you look at the evidence, this approach doesn't work. The approach of taking decision making over some of the most important things in people's lives, dictating to them about how to spend their money, the evidence shows it doesn't work. Actually providing the services, providing those wrap around services, overcoming the barriers to unemployment, addressing the issues of addiction which are very serious issues and I totally agree we need to address, that's what works. We have seen that from the evidence. There are some excellent programs that if applied more broadly will actually start to work.

ANDREW O’KEEFE:

It sounds like we’re going to get that and the other approach.

MINISTER TUDGE:

Andrew, this trial is not just the card. It's actually three components, this trial. It is the card which reduces the amount of cash available for those products. It's the services which help people get off their addictions if indeed they are addicted to those substances. The third element is the regional council which oversees the design of the trial and the implementation of it so we have constantly got the regional leaders there.

ANDREW O’KEEFE:

We have to leave it there. Just Minister, before we go, how long does the trial run and when do we determine whether it has been a success?

MINISTER TUDGE:

The trial runs for 12 months. I think we will get some early data in the next couple of months.

ANDREW O’KEEFE:

All right, let's check back in after 12 months.

ANGELA COX:

We have got plenty to talk about I think.

(ENDS)