Discussion - Cashless welfare card

The cashless welfare cash forms part of a piece of social policy introduced in 2016 for trial in Australia by the Australian Liberal/Nationals Party. The Australian Liberal/Nationals Party is a historically right of centre political party that lean toward a more conservative flavour of governmental policy. The scheme itself proposes moving all welfare recipients away from periodic cash or direct credit payment into a system whereby 80% of their payments will be available on a debit card offered by the financial institution Indue. The card comes with restrictions on where it can be used which can broadly be described as inhibiting gambling/gaming spending, as well as cigarette and alcohol purchases. The other 20% of each welfare payment is paid to recipients in the traditional form; either cash or credit to a bank account. This has been advertised by proponents of the scheme as targeted at reducing cash spending on self destructive behaviours, with many taxpayers agreeing with this sentiment. Should the cashless welfare card be introduced to all recipients of welfare in Australia?

There is certainly some merit to the intention of restricting those on welfare from using their payments on gambling. The gambling industry is known to be highly predatory with bookholders and casinos using targeted advertising to lure economically-vulnerable populations like those on welfare into spending their money on their gamlbing services. Moreover, unlike businesses involved in the service of alcohol who are legally required to cut off patrons who are intoxicated, bookholders and casinos are under no legal obligation to cease offering their gaming services if their customers lose a significant portion, if not all, of their money. Yet, they seldom allow their customers to gamble money they don’t have. The industry is cancerous and taxpayers should not be playing a part in funding it.


Likewise there is a superficial allure to restricting taxpayer money paid to welfare recipients on the purchase of alcohol, cigarettes and recreational drugs. These are seen across the world as non-essential purchases. However looking just below the surface into the medical implications of this policy some problems emerge. Immediately ceasing someone with an alcohol use disorder’s access to alcohol can have life threatening complications during the withdrawal period, resulting in a policy that can be directly correlated to inciting harm to those encapsulated by it. Likewise, many recreational drugs are recognised in the medical literature as having pharmaceutical/pharmacological qualities that result in physical alterations in their user’s brain structure and chemistry. Withdrawal from opiates is described as torture for those who have experienced it with some people experiencing such intense pain and discomfort that they end their own life to stop their suffering. A similar complication can come from benzodiazepine abuse. A final point on the topic of recreational drug use is that for a percentage of some THC users they would not classify their use as recreational. Irrather, they often utilise this drug for its anxiolytic and analgesic properties to manage chronic pain refractory to other therapies.


These medical issues need to be evaluated more thoroughly should the Australian government regulate the cashless welfare card for all recipients of welfare. Ideally, those who have moved toward this scheme should be assessed individually to ensure that introduction of the card will not place them at risk for medical complications around drug and alcohol withdrawal. Unfortunately, due to the tenuous relationship of many welfare recipients with the government body centrelink, the transparency and honesty that would be required to properly assess the former party in respect to potential medical risks will never be possible.


Moving to some more obvious cons of the card’s introduction, there is no doubt that the card has the potential to discriminate against those forced into its use. The card, which is first and foremostly not offered by one of the big four banks instead being facilitated by a smaller financial institution, is already known colloquially in some regional communities involved in the trial as ‘the white card’. This has the implication of those who receive welfare payments being instantly identifiable to others and potentially being discriminated against and profiled as drug/alcohol addicted gambling fiends.


Moreover on the topic of profiling, the all-or-nothing proposed introduction of this policy profiles all recipients of welfare as being people who are unable to be trusted with their money. It makes the sweeping assumption that everyone who receives welfare under the current system is unable to budget which is grossly incorrect. One welfare recipient who was moved onto the system during its ongoing trial period told ABC’s 7:30 that she got her first job when she was thirteen and has maintained employment over the last twenty years through three pregnancies. Yet now she has been deemed by the government as being untrustworthy and unable to budget.


The card restricts the users from making majority cash purchases. Many users of the card have stated that they are restricted from making purchases from some markets, second hand stores and from making payments in private tenancy agreements. The implication here being that this government policy potentially forces some users into purchasing more expensive goods and engaging with more expensive services, propagating the cycle of poverty.


There is potentially a conflict of interest coming from the current issuer of the card. A director of the bank also has a high ranking position in the nationals party in Australia who have pushed for the card’s introduction.


Finally, it should be noted that there has been one published study on the efficacy of the card at reducing behaviours around gambling, as well as alcohol/recreational drug consumption and cigarette purchases. The results of the study overwhelmingly disproved the stated benefits by proponents of the card and the policy. It was shown that those who were likely to engage in spending behaviours in the gambling/gaming and alcohol/drug industries found a way to get around the restrictions of the card regardless.


Ultimately, it seems as though the policy in its current form should probably be abolished as its negatives greatly outweigh its positives. There is merit in the idea of moving away from cash payments of welfare in today’s age of ever increasing digitalisation, however this should more likely focus on policy which will reduce discrimination and profiling of welfare recipients rather than increase it. A more appropriate policy might be legislating large banks to provide bank accounts to those receiving welfare payments. This would eliminate the issue of a conflict of interest in one single bank offering the card, as well as welfare recipients being recognised by using the card. Furthermore, as having a bank account is increasingly recognised as a subtle prerequisite to employment, this will empower those who receive welfare payments to re-entering the workforce.