Now, we offer payments for - for example unemployment - to bridge people between one job and another.
Sometimes the distance between those two is a very long one. But, it's been noted that many people, not all, but many, misuse the money to buy fags, or drugs or alcohol and don't buy the proper things that they should.
So a test was done in Ceduna, with a cashless welfare card, where people could use it only to buy the things that basically a decent person would buy. So there's no question it's a bit of social engineering.
Let's ask the Minister for Human Services, Alan Tudge. Alan, how well did that go? And good morning.
Good morning Leon. Well the trial has come to an end and we've had an evaluation done independently.
And what it has found is that it was effective in reducing the alcohol consumption, illegal drug use and reducing gambling. And so we're pleased with those results.
It's not perfect but it has had the impact which we wanted to and that is to reduce some of the devastating harm which is particularly caused by alcohol consumption.
So you're going to extend this, where?
We're announcing today that we're extending these trials onwards for the foreseeable future both here and in the East Kimberley where the trials have been occurring.
Now, what that means, it starts to become a more regular mechanism for the distribution of welfare, but of course we'll still have six monthly reviews and we'll still be going back to the Parliament for six monthly authorisations for it to continue.
So where in South Australia will this test come next?
So at this stage we're just continuing it on in the Ceduna region, where we've got the results. There are other regions, in South Australia, who have approached me and would like the card and the associated services introduced in their area but we haven't made any decisions in relation to those regions.
Now, it has been put out by some that this concept of yours is really nothing but a gift or payback to companies that would benefit from this work to produce these cards and so on and database for giving money to LNP - The Liberal National Party. What do you say to that?
Well that is absolute nonsense. This card is operated by a small financial services company called Indue, which to my knowledge - I don't even know what their donation record has been, if any, to the LNP.
But they were chosen by my Department at arm's length from me, to provide the card. A small financial services provider in Australia.
How the card works by the way, Leon, just so that your listeners know, is that it is basically a Visa debit card.
It works anywhere, you can purchase whatever you like, but it simply doesn't work at the bottle shops and it doesn't work at the gambling houses and you can't take cash from it, which means of course you can't purchase illicit drugs.
Now we've particularly applied it in the Ceduna region, because (a) the community leaders wanted it to come in and (b) we know the devastation which those substances cause in those regions.
It's not just devastation to the individuals concerned but devastation to others as well. Because when people drink copious amounts of alcohol then they start to cause harm to others, and that's the issue which we're really trying to address.
Alright, so this is going to be wound in to other communities in SA. Any metropolitan?
Leon, we just haven't made the decisions yet, in terms of what we'll do next. So, we've always said that we will trial it first, assess what the trial conclusions are before we make conclusions about where else we might take it.
So, I don't want to pre-empt any decision which we may or may not make. We just haven't made the decisions. But I just note that there are other regions who have looked at these trials in South Australia and in WA, and know that they've got similar types of issues and would like it to be rolled out further.
I need to ask you a couple of things. Is there an active discussion within Human Services about drug testing people who are getting some kinds of welfare benefits for illicit drugs?
Leon, this comes up from time to time. And we do know that many people on unemployment benefits are using Ice. The national inquiry in to Ice revealed that evidence, and clearly welfare payments are not for that purpose.
Welfare payments are there to get you through hard times, to pay for your housing, for your food, your clothes and the other essentials in life. We are concerned that people are abusing their welfare payments – that they are using it for things which it was never intended.
We're particularly concerned when that has the impact on other people, not just themselves. That is primarily what this Cashless Debit Card was about in the Ceduna region, and it has had some of that impact on reducing some of those harms on others.
So basically you are - I'm just trying to get out exactly what's happening here- you are discussing the possibility that people on certain kinds of welfare could be drug tested, or are you going to rely on the welfare card?
At the moment, the only plan that we have in place is the Cashless Debit Card. It is obviously targeted at illicit drug use, because you can't purchase illicit drugs without cash and consequently this card reduces the availability of cash. So it's very much targeted at that, as well as alcohol and gambling.
How much would it cost - if you wanted to introduce this across the country, it would be pretty expensive wouldn't it?
There is a cost associated with it. It's one of those things where there is economies of scale of course, and the more people that you have participating in it, then the lower the unit cost.
So, we just haven't got down to that level of detail, to be honest, Leon. We're taking it one step at a time. We always said that we'd do this. I know that some people would like us to rush it out more rapidly across Australia, other people want us to shut it down immediately.
We're just taking it one step at a time. Where we are doing it, we've done it in good consultation with the community leadership, we have the trial, we've got the results, we're continuing on the existing trials while we consider the next step.
Alright, now, one other issues that's come up and I know you've been across this, and we've had Steve Georganas, and many other MPs from all sides of the House bringing up issues here, with these Centrelink letters.
Can you now be confident that people who don't have a debt aren't getting letters telling them that they owe money to the state?
Leon, you don't get a debt letter, unless you have already received two other letters saying that there is a discrepancy between the information which you provided to Centrelink and the information which the Australian Taxation Office has on your file, and that you failed to respond to those letters.
Or, you update your information and it still shows there's a discrepancy. That's how the systems work. It's always worked like this, by the way, in terms of we match what you self-report in terms of your income to Centrelink…
…and on that basis you get your welfare payment, based on your reported income.
Sure, yeah, but see I…
Later on we check that against with what the Australian Taxation Office has on your file. If there is a discrepancy between the numbers, we go to you and say; hey there's a discrepancy here, can you explain why there's a discrepancy?
On many occasions people can, on about 20% of occasions. But on the other occasions the person cannot or does not, and in which case then they might receive a debt notice.
Have you seen any evidence at all, because I know that a lot of MPs and others have handed you, and the Senate's had a look at this, documents to say here is the letter can you explain this, are there any anomalies, or is the system working as it should?
The system uses a methodology, Leon, which has been in place since 1990. Now, I've gone through the system in great detail, now, and we've made a number of refinements.
One of the issues, which came up, which I was concerned about and as soon as I was aware of this, we made a change, and that is that if people hadn't updated their address to Centrelink, then they may not have received that first letter.
What we are doing now is we're sending registered mail, so that we can be assured that people get that first letter.
And those first couple of letters are critical, because all it does is say that there's a discrepancy and that you need to provide an explanation as to why there is a discrepancy and if you don't then you may get debt accrued to you. We want
to give people that opportunity.
Now, there's also subsequent opportunities, by the way, even if you missed that first letter. You can ask for a review. In which case then a Centrelink officer walks through with you, you can update your records then and get a new assessment.
Even if you're unhappy with that review you can appeal to the Administrative Appeals Tribunal. All of those options are free and at any stage you can update your information.
But what we encourage people to do is when they get a letter from Centrelink, to read it carefully. If it says there's a discrepancy then jump online, call the 1800 number, which you can get straight through on, and update your records if you believe there's a valid reason for it.
Alan, thanks for joining us. That's the Minister for Human Services, talking about trials of the cashless card.