Transcript: ABC 702, Sydney interview with Chris Bath

4 October 2016

The Hon Alan Tudge MP

Minister for Human Services
Topics: 
Helping young people get into work, Welfare reforms, Youth Cashless Debit Card proposal
E&OE

CHRIS BATH:

Today the topic is should unemployed teens under 18 get a cashless welfare card instead of cash? We've got the poll up on Facebook. You can head there and vote. A few people already have, currently the vote is standing at 63 per cent yes and 37 per cent saying no.

That's our daily debate, so you just head to our Facebook page if you'd like to have a say. So, when you were a teenager did you have a job, how much cash were you able to pocket? Did you know how to budget?

With Australia's youth unemployment rate increasing to 13.24 per cent, the Federal Government is seeking to rollout a welfare debit card instead of cash payments for unemployed teenagers.

Alan Tudge is the Human Services Minister and he joins us now. Good morning to you Minister, thanks for your time.

ALAN TUDGE:

Good morning Chris.

CHRIS BATH:

What is this healthy welfare card? Explain it to us.

ALAN TUDGE:

This is something which we are already trialling in a couple of places in South Australia and Western Australia and effectively it is a simple concept: instead of providing welfare payments into an individual’s savings account, which of course you can access as cash, most of the welfare money is put into an account which is only accessible via a visa debit card. This visa debit card works anywhere, you can purchase anything but it doesn't work at the bottle shops, it doesn't work at the gambling houses and you can't take cash from it and consequently you can't purchase illicit substances with it.

To date we've trialled it in locations where there is really high welfare-fuelled alcohol, drug and gambling abuse and it's starting to have an impact on reducing those things.

What I've flagged today is that we are taking a look at whether or not there could be an applicability of this card to under-18s. That is what New Zealand does and it seems like it's having a positive effect there.

CHRIS BATH:

Why give it to people under 18?

ALAN TUDGE:

Well in New Zealand, and I was there last week taking a look at this, for people who have dropped out of school and are effectively looking for work and are under 18, they're often needing some additional financial support and structure in their lives.

Now, when they go into the equivalent of a Centrelink office in New Zealand, straight away, they get some budgeting assistance, they have some of their welfare payments managed, for example, their rent is automatically paid for.

Then the remainder of their welfare payments is placed onto this cashless welfare card which can only be used at certain stores and they are left with about $50 in cash which they can use as they see fit.

The purpose here has been not only to help get these young people's lives in order, put a bit of structure around it, make sure they've got rental security and the like, but I also it’s think a bit of an incentive to get work if work is indeed available.

CHRIS BATH:

So, would you propose to give Australian’s under 18, $50 cash and the rest of it to go to automatic payments?

ALAN TUDGE:

All I've said at this stage is that the New Zealand model is worth looking at and considering because it does seem to be having a positive impact on young people's lives.

If something helps young people to get control in their lives, if it helps to ensure young people are more likely to go into work and reduce welfare dependency, then I think that is worth looking at and worth potentially trialling.

CHRIS BATH:

Well, at the moment they get – it is youth allowance, isn't it, for 16 to 24-year-olds? Why particularly target the under 18s with this?

ALAN TUDGE:

That's what they've done in New Zealand and I think in part because it's a recognition that if you go onto welfare payments very early on in your life then the chances of you being on welfare for many years to come is quite high.

And of course with those under 18s, I think they want to send a stronger message that they really want young people to be staying in school, going to training or getting a job because once you're on unemployment benefits or on passive welfare for any length of time, it can really be quite debilitating on the individual in terms of your motivation, even your mental health and your ability to get work subsequently.

I think it's particularly acute when you go onto welfare very early on in your life and that's been the experience in New Zealand.

CHRIS BATH:

So, how would giving people a card as welfare, a debit card as welfare, mitigate against them being on long term benefits?

ALAN TUDGE:

It's a combination of things; in New Zealand where it's the overall money management structure which is provided to an under 18 person who's on welfare payments.

As I said, it is insisting that they do a budgeting course, it's ensuring that their rent is paid for and it's ensuring that the welfare dollars they do get are spent on the right things and not spent necessarily on say alcohol or gambling products or other substances which of course welfare is not there to provide.

So, that's the intent and I think that also it provides a little bit of extra stimulus for a younger person to take a job if indeed one is available because, of course, as soon as you take a job and you're earning your own money, you can do whatever you like with your own money.

CHRIS BATH:

We've got a Facebook comment here from one of our listeners asking will it let these kids get decent clothes that won't single them out or let them save for important social events like birthdays or pay on school excursions where you often need extra cash, I guess the question there is how flexible will this be with the debit system?

ALAN TUDGE:

Yeah, so in terms of what we already have in place in Australia with our cashless debit card, in Western Australia and in South Australia where we have our trial sites, this card literally works like an everyday visa debit card which many of your listeners would probably have in their pocket right now.

For example, you go to the clothes store, you swipe and off you go, you go to the supermarket, you go to the petrol station, wherever, it works literally everywhere but it simply doesn't work at the bottle shops, doesn't work at the gambling houses and you can't take cash from it and consequently can't purchase illicit substances.

Now, in our trial sites in Australia, 80 per cent of welfare payments are placed onto the card, which is accessible - 80 per cent is only accessible by this card. The 20 per cent is - goes into your ordinary savings account, which of course you can take out in cash.

In relation to your question about school excursions and the like, I mean here we're talking, at least in New Zealand, it's largely unemployed people who are 16 or 17 years of age, so they've dropped out of school, they may not be undertaking any training and so it's about trying to provide some structure in their lives and trying to provide that additional incentive to get into work.

CHRIS BATH:

Minister, you mentioned earlier that the trial of a card similar to this has been done in parts of WA and also parts of Queensland, sorry, and one of the arguments against it is, people that are using it at the moment say it's patronising.

ALAN TUDGE:

Well I disagree with that, because if you look at the card it's a silver visa debit card. Now, a lot of young people barely use cash at all these days in any case, and so this card literally works at every single store apart from at the bottle shop and the gambling houses.

So I fail to see why that is so patronising, to be allocating a visa debit card for people to be able to use and to spend welfare payments with.

CHRIS BATH:

Yeah, I think the reason why is they say it's a nanny state, and they've been told how to spend their money.

ALAN TUDGE:

Well, a couple of things. One, we're not telling people how to spend their welfare payments, and second it's actually not their money as such, it's taxpayers' money which is provided to them.

I think taxpayers are more than willing to provide assistance to those people who are down in their luck, might not have a job or the like, but I don't think taxpayers expect to be providing ongoing assistance for people to spend it on alcohol, on gambling or on drugs.

In places where this is being trialled, in the East Kimberley and in Ceduna in South Australia, an enormous amount of the welfare dollars is being spent on alcohol particularly, and an enormous amount spent on the pokies machines in Ceduna in South Australia.

That has not just an impact on the individual, by the way, if you spend an enormous amount on alcohol, but it has full impact on the entire community.

It has enormous impacts on the rates of violence against women, on the fact that children aren't being fed and on the general safety in the communities and wellbeing of those communities.

So if this card can have an impact on those things, if it can reduce some of the violence against women, if it can ensure that some of the kids are being fed, if it can mean that community overall is a little bit more stable, then it is worth pursuing.

CHRIS BATH:

[Talks over] Minister I'm really sorry but I have to wrap you up. I've got to go to news, sorry for interrupting.

ALAN TUDGE:

That's okay.

CHRIS BATH:

It's news time.

[ENDS]