The federal government is considering allowing Australia’s biggest banks to provide those on welfare with a benefits quarantining-type card as part of the contentious Cashless Debit Card (CDC) scheme.
The CDC, labelled as “racist” by senators previously, kicked off in 2016 as a trial. It aims to govern how those in receipt of welfare spend their money, with the idea being to both prevent the sale of alcohol, cigarettes, and some gift cards and block the funds from being used on activities such as gambling.
Participants of the CDC trial have 80% their funds placed on a card, which is managed by Indue, with the remaining 20% to be paid into a bank account.
In the 2021-22 Budget, delivered last month, the government said it would be providing funding to support the continuation of the CDC, but did not disclose how much.
During Senate Estimates on Thursday night, Minister for Families and Social Services Anne Ruston said part of the funding would be used to explore the addition of further financial institutions as CDC providers, with Indue currently being the sole provider.
“Investigating the opportunity for multi-issuer on the card so that it wasn’t just Indue that was the issuer,” she said. “A couple of weeks ago, [I] met with the Traditional Credit Union as an example of a potential other financial deposit-taking institution that may be able to be an issuer of the card, and we’re also working with the major banks.”
There is a CDC technology working group, which includes ANZ Bank, Commonwealth Bank, National Australia Bank, Westpac, Eftpos, the Minderoo Foundation, Coles, Woolworths, Australia Post, and Metcash, that has been explained as working to ensure a seamless experience for those on the scheme.
“We’ve been working with the major banks and making sure that the technology that supports the card is as user friendly as possible,” Ruston said Thursday. “And we’re very pleased with the progress there, but certainly the opportunity for the major banks to also be issuers is something that we would welcome.
“That’s part of the ongoing process of making sure that our approach to this technology is one that’s absolutely seamless experience for the person who’s using it.”
Total expenditure for the CDC in 2019-20 was AU$29.4 million. This comprised AU$14 million for Indue, AU$12 million labelled as departmental, about AU$1.5 million spent on evaluation, AU$370,000 on communications, and the remainder was spent on technology.
In March, Indue was afforded AU$26 million to expand the CDC scheme into the Northern Territory and Cape York, bringing the total amount pocketed by the company since 2015 to AU$70 million.
In response to questions taken on notice during the last round of Senate Estimates, the Department of Social Services confirmed there have been six notifiable data breaches that occurred when attempting to contact CDC participants.
“The six affected participants were notified via registered post of the breaches and provided with a copy of the original correspondence,” the department said. “Processes have been amended to prevent further breaches.”
When asked if it was “still government policy to look for efficiencies in the portfolio by targeting social security payments and benefits”, Ruston said there were no measures under investigation in relation to finding efficiencies in the department in regards to social security payments.
Last month, Opposition Leader Anthony Albanese said he would scrap the CDC if Labor were to win the next federal election. Labor Senator for the Northern Territory Malarndirri McCarthy said scrapping the scheme would be an opportunity to “reset the whole conversation”.
“The federal government’s own report — AU$2 million report — has shown that it isn’t working in regards to reducing violence, in regards to reducing gambling,” she said at the time. “We have seen the long term ramifications here. It is not working.
“Of course, we’re working towards, no doubt a cashless society, but let’s hope we do that with genuine consultation with all Australians. When you impose a draconian piece of legislation on the most impoverished and disadvantaged Australians, that’s not a choice.”