Mon, 25 Mar 2019 - 16:24
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Speech to Sydney Institute: Welfare, Personal Responsibility and the Cashless Debit Card


It is a pleasure to once again speak at the Sydney Institute – which has a well deserved reputation as a forum for serious policy debate.

Today my topic is welfare, personal responsibility - and the role of the cashless debit card as a policy tool to help people receiving an income support payment live better lives.

I want to speak first about the objectives of our welfare system, particularly for those of working age; next I will turn to the importance of the Cashless Debit Card in helping to meet those objectives; and thirdly I want to speak about the progress we are making and what the next steps might be.


The Objectives of Our Welfare System

Let me start then with the fundamental question: what are the objectives of our welfare system.

There are around 2.3 million working age Australians – that is, between ages 16 and 64 – whose primary source of income is a welfare payment.[1]  There are about 720,000 on Newstart; 685,000 on Disability Support Pension; 280,000on Youth Allowance; and 325,000 on Parenting Payment.[2]

We make a major financial commitment as a nation to supporting less fortunate Australians.  The total amount spent in my portfolio on working age income support payments is $44 billion a year[3]

When you add in the age pension, child care subsidy and other major payments, the total amount spent on social security and welfare this year will be $175 billion - around one third of the entire Commonwealth budget.[4]

Certainly the underlying objective of our welfare system is to support fellow Australians who are not in a position to support themselves.

Such a system improves the quality of life for all of us – because we know the safety net is there should we need it – and it improves social cohesion.

But one of the key principles about working age welfare is that it should, to the maximum extent possible, be temporary.

The best form of welfare is a job.

Therefore much of the focus of our system is on helping people who are out of work to prepare themselves to get into the workforce.

Since coming to government in 2013, we have made significant progress.

We have generated 1.3 million jobs [5]– which is an important part of the overall picture, because if the jobs are not there people cannot make the move from welfare into a job.

There are 230,000 fewer people on the welfare rolls today than in 2014[6].

And the share of working age Australians who are on an income support payment is at 14.3 per cent – down from 16.5 per cent when we came to Government.  It is now at its lowest level in thirty years.[7]

But as well as looking at this from a system wide point of view, we need to look from the perspective of the individual Australians wanting to move from welfare to work.

I’ve had the privilege of meeting quite a few people making this journey since coming into this portfolio – and there is no doubt that many start at a significant disadvantage.

If you don’t have a mum or dad or another supportive and caring adult in your life, getting into the workforce can seem very daunting.

Just consider how hard it is to get to work unless you can drive, in many parts of Australia.

But if you don’t have someone in your life who is able to spend 120 hours with you while you get your licence, then learning to drive is a huge barrier.

Then there is the problem of intergenerational welfare dependency.  All too often, if your parents were on welfare, you end up on welfare.

For example, if we take young Australians who are on one of the primary income support payments, over nine in ten of them have a parent who has been on a welfare payment at some point in the first fifteen years of the young person’s life.[8]

And if we take that group of parents, three quarters of them have been on welfare not just at some point in those fifteen years – they have been on welfare for at least seven of those fifteen years.[9]

Of course if you have a disability, or a drug or alcohol addiction, or a mental illness, you face real barriers in finding and keeping work.

But the fact is that these barriers need not be permanent. They need not be insurmountable.

I have been inspired to see the paths many people around Australia are taking to get into work – often with help from supportive organisations.

I think of Kathy, who I met in Hervey Bay.  She is a young single mum – but she is working to get her Certificate in Aged Care so she can work to support herself and her daughter.

There is Dave, who I met in Penrith.  He is doing an eight week course at Productivity Bootcamp, to help him get the skills and confidence to win an apprenticeship in the building industry.

Or Linda, a woman of about my age, returning to the workforce after two decades looking after children, who I spoke with on a visit to a Jobsactive agency in Hornsby in my electorate.  Last year she completed a training course on office procedures, and now she is plunging into interviews.

Everybody who moves from welfare to work achieves a personal victory – in terms of self esteem, a sense of contribution, and of course in improving their financial position.

But it is also very much in the national interest that we get as many people as possible making that journey.

The young people I spoke of earlier, where intergenerational welfare dependence is apparent, are expected to spend half of their lives on welfare – more than 35 years. This will come at a cost of roughly $335,000 each to the taxpayer.[10]

For all of these reasons, our Liberal National Government is working to target our efforts to people who are at risk of being stuck in the welfare trap.

The more people we can help get into the workforce, the better it is economically – on top of the huge benefits for the individual.

And the more that we can help today’s children – particularly those growing up in vulnerable circumstances - to get to school, to stay in school, and to develop the kinds of behaviours that are important to success in work and in life, the less likely those children are to be caught in the welfare trap when they become adults.


The Role of the Cashless Debit Card in Meeting Those Objectives

Which brings me to the importance of the cashless debit card – in helping meet our policy objectives for the welfare system.

In August 2014, Andrew Forrest released his report, Creating Parity, which reviewed Indigenous Training and Employment programs.

A key recommendation of the review was the concept of the Healthy Welfare Card - now known as the Cashless Debit Card.  

The idea of the Cashless Debit Card was to provide a stabilising factor in the lives of families with regard to financial management and to encourage safe and healthy expenditure of welfare dollars.

At this point I need to acknowledge my colleague and friend Alan Tudge, who turned the Cashless Debit Card from a Recommendation in a report, into a reality.

He worked hand in hand with communities such as Ceduna in South Australia, to develop the parameters of the trial to suit individual communities.

And while the end product is an impressive, standard looking, standard feeling everyday banking product, it is inherently complex in the back end.

After many months of partnership with the community leaders of Ceduna and the surrounding communities, on 15 March 2016, the Cashless Debit Card was implemented.

The Cashless Debit Card works by quarantining a proportion of a person’s welfare onto a VISA Debit Card that looks and operates just like a normal banking card - with one main exception. 

It cannot be used to buy alcohol or gambling products – and it cannot be used to get cash out and therefore cannot be used to purchase drugs.

All physical stores with EFTPOS machines automatically accept the card Australia wide, unless they primarily sell alcohol or gambling products. Cash-out facilities are switched off for this card. 

The key details about how the card would operate were designed in close consultation with community leaders in the trial sites:

  • Who would the card apply to? Everyone on a working age welfare payment; designed by community leaders.
  • What rate of welfare would be quarantined? 80 per cent; designed by community leaders.
  • What items would be restricted? Alcohol, gambling, cash; designed by community leaders.
  • Even smaller things like the design, basic functionality and the colour of the card; designed by community leaders.  

And the key reasons for using the cashless debit card as the means to deliver welfare payments are pretty clear.

It helps ensure that welfare payments are used for their intended purpose: so vulnerable Australians can put food on the table, can pay the rent, can buy clothes for their children.  Every time a welfare dollar goes to a drug dealer or grog seller, it is not being used to provide this primary support.

Very importantly, the cashless debit card helps people stabilise their lives and reduce key risk factors. In turn this helps people deal with key responsibilities in their lives – such as looking after children.  It also helps them deal with drug and alcohol addictions – which in turn helps you to become ready to work.

Now I hasten to add that there are plenty of people receiving working age income support payments who do not have any problem with drug or alcohol addiction.  But the sad fact is that the incidence of such addictions is higher amongst those on welfare than across the total community.

The Australian Institute of Health and Welfare’s 2016 National Drug Strategy Household Survey found that those who were unemployed were 3.1 times more likely to use meth/amphetamines and 1.5 times more likely to use cannabis than those who were employed.[11]

Of course, we need to support this policy tool with further support for people to deal with their addictions. While the primary responsibility for funding drug and alcohol treatment services resides with state and territory governments, our Liberal National Government federally has committed more than $720 million over four years for the Drug and Alcohol Program, commencing in 2016-17 to reduce the impact of drug and alcohol misuse on individuals, families and communities.


The Progress we are Making – and What the Next Steps Might Be

I have spoken about the rationale for the Cashless Debit Card.  Let me now turn to describe the progress we are making.

Progress to date

The Cashless Debit Card began at the Ceduna trial site in March 2016 with approximately 900 participants - 74 per cent of whom are indigenous.  

We moved next to the East Kimberley in April 2016, with a participant base of approximately 1,400 people, of whom 81 per cent are indigenous.

These two areas were not chosen because they had majority indigenous populations; they were chosen because there was support amongst local community leaders to trial the Cashless Debit Card.

Our next step was to look for sites to test the card in less remote areas – and with populations that were both indigenous and non-indigenous.

This saw an expansion to Kalgoorlie and the surrounding Goldfields region in Western Australia in March 2018, more than doubling the numbers with a further 3,200 participants, of whom only 45 per cent identify as indigenous.

And in January this year we commenced in the latest trial site of Bundaberg and Hervey Bay, where approximately 6,000 people are expected to come onto the card, of whom, only 14 per cent of whom are indigenous.

A key factor in choosing Bundaberg and Hervey Bay was the view of the local community – based on extensive consultations – that they wanted the card as a tool to target issues such as high youth unemployment and intergenerational welfare dependence.

While youth unemployment in the area is almost double the state average, there is no shortage of jobs.  There are plenty of backpackers attracted to the area to work in tourism and agriculture – and there is no reason why more unemployed young people in the local area could not also work in these sectors.

That is why this trial only applies to young people 35 years and under, who receive job seeking and parenting payments.     

This fourth trial site will also let us test whether the Cashless Debit Card will help – as it has in the other trial sites – to improve people’s motivation to find employment, and to improve stability in young families.   

It also lets us test the card on a larger scale and with a larger range of merchants, compared to the previous three sites.

To support the larger scale rollout, we have improved the technology. The card can now be used at almost any online retailer, again with the key exclusions of alcohol merchants and gaming sites.

And other payment facilities like the use of Direct Debit have been improved. 

Importantly the roll out to Bundaberg and Hervey Bay means a significantly improved and more cost effective product.

With this greater scale, the operational cost per person will fall to less than $820 per person – a lot less than what opponents of the card will tell you it costs.

We are continuing to work with the trial site communities to improve the card rollout.

Late last year I joined a forum with community leaders from all four sites.

We heard from inspirational leaders like Ian Trust in Kununurra who spoke of the importance of trying something different to the failed approaches of the last 50 years, and Corey McLeland from the community of Koonibba, near Ceduna who said, “This is the best thing that has happened to our community, would we do it again? Absolutely.”  

Evidence that it is working

What then is the evidence from the trials to date?

Of course the Cashless Debit Card is no silver bullet - but it is making a significant difference.

The independent evaluation released late last year states the card has shown “considerable positive impact” in these first two trial sites, including:

  • 41% of participants surveyed who drank alcohol reported drinking less frequently;
  • 48% of participants surveyed who used drugs reported using drugs less frequently;
  • 48% of those who gambled before the trial reported gambling less often;
  • An increased motivation to find employment; and
  • Improved parenting outcomes and child wellbeing.

Late last year I visited the Goldfields region – where I heard first hand from community members, leaders, police, health workers and local business owners, from communities such as Laverton, Leonora, Mt Margaret, Coolgardie and Kalgoorlie.

There was a strong and uniform theme: the people I met told me the card is making a real difference, the streets of their town are quieter and it feels safer.

Police spoke about significant decreases in late night callouts for domestic violence.

Health officials told me about significant reductions in mental health and domestic violence presentations.

At one chemist, a staff member – who admitted she was a sceptic prior to the implementation - spoke of the increased sales of nappies and health and hygiene products since the Card commenced, because parents now had the money available to buy these products for their children.

The Baseline report into the Goldfields trial site has confirmed these findings, with its key findings including:

  • Decrease in drug and alcohol issues;
  • Decrease in crime violence and anti-social behaviour;
  • Improvements in child health and wellbeing;
  • Improved financial management; and,
  • Ongoing, and even strengthened community support. 

These findings are not new. There have been over a dozen pieces of research done on both the Cashless Debit Card and Income Management programs.

The most consistent themes across all of this research mirror that of the two pieces of research I have just quoted, being:

  • Improvements in child wellbeing;
  • Improvements in drug and alcohol use and gambling habits; and,
  • Improvements in financial literacy and financial management. 

This substantial body of evidence shows that the Cashless Debit Card is supporting people to demonstrate personal responsibility.

It is one of the most encouraging developments in social and welfare policy in decades.

The West Australian Coroner has recently recommended the further expansion of the Cashless Debit Card on a voluntary basis across the entire Kimberley region of Western Australia in response to the tragic suicides of 13 young indigenous people. 

This is consistent with a growing community view that the Cashless Debit Card can be an important tool to help reduce the significant harms caused by welfare fuelled drug, alcohol and gambling abuse.

Strong political opposition

But not everybody agrees.  Sadly, the Greens have been resolutely opposed to the rollout of the Cashless Debit Card.

In their world view, it seems that the theoretical virtues of a right to self-determination are more important than on the ground evidence that this policy tool is making communities safer, reducing drug and alcohol-fuelled domestic violence and helping parents better care for their children.

Worse still, this bizarre mis-prioritisation of policy goals now seems to be infecting Labor.

Until last year, welfare quarantining measures enjoyed bi-partisan support.

But Opposition Leader Bill Shorten has made it clear that Labor has changed its position. On a recent visit to Bundaberg and Hervey Bay, Shorten said Labor will roll back the cashless debit card:

I can’t unscramble the egg of what this government does, but what I can do if elected, is we will do what we can to roll it back.[12]

This is a sharp change from Labor’s position over the last few years.  In the Rudd-Gillard-Rudd years, then Minister Jenny Macklin expanded the income management program into sites across the country, including Bankstown (NSW), Rockhampton and Logan (Qld), Shepparton (Vic), Playford and the APY lands (SA) and the Ngaanyatjarra (NG) Lands (WA).

Labor also supported the initial trial sites of the Cashless Debit Card.

The Opposition Leader should listen to Labor Senator Alex Gallacher, who recently visited Ceduna and had this to say:

Bill Shorten needs feedback from people who have been on the ground, to listen to people who are interested in their community and contributing… and I have no qualms at all about expressing what appears to be broad community support for the card in Ceduna.


Next Steps

Labor may be confused in its position on the Cashless Debit Card; but our Liberal National Government has clear plans to continue to build on the success we have seen to date.

In light of the overwhelming evidence in favour of the Cashless Debit Card, in the next sitting, we will be passing legislation to continue the trials in the existing sites to support the wishes of these communities.

I earnestly hope that Labor will support this legislation. But given their recent flip-flops, it is hard to be sure. 

However, that is not all we plan to do.

I am announcing today that we will make a number of additional investments in the Cashless Debit Card off the back of the successes I have already outlined.

First, I am announcing that we are committing funding to extend the trials in the current sites for a further 12 months to 30 June 2021. 

Second, we will replace the technical aspects of the existing income management program in the Northern Territory and Cape York with the more effective Cashless Debit Card – while maintaining the basic income management triggers and operating model.

Third, we will continue to invest in improving the technology of the Cashless Debit Card to ensure that participants are offered a product that is as close to an everyday banking product, and to ensure the best value for money for the Government in providing this support to vulnerable Australians.

This investment will also further test the scalability of the Cashless Debit Card and allow the Government to further test its effectiveness on a larger scale.

The total amount we are committing on these measures is $128.8 million over the next four years – as part of the budget which Treasurer Frydenberg will bring down next week. 

This is a powerful indication of our commitment to the Cashless Debit Card.

We have made substantial progress with a careful and measured policy development process over several years, moving over four trial sites from small, remote and majority indigenous communities into larger communities where participants are majority non-indigenous.

Already we are seeing significant policy benefits – and the lives of vulnerable Australians are improving as a result.

And now I am able to announce a substantial funding commitment to further continue and expand the cashless debit card.



Let me conclude then by returning to the theme that our social security and welfare system is designed to support working age Australians who are out of the workforce to get into the workforce.

The cashless debit card is an important policy tool which can help meet that objective – and also deliver other significant benefits in helping people to exercise personal responsibility and live better lives.

That is why we have been systematically trialling it on a growing scale over the last three years.

The results are encouraging – and today I have announced further funding to continue this work.

The cashless debit card is one of the most significant positive developments in welfare policy for many years – and for our Liberal National Government it is therefore a priority for the future.



[1] As at June 2018, DHS Administrative Data

[2] As at December 2018, DSS Payment Demographic Data -

[3] DSS 2018-19 PAES.

[4] DSS Payment data - June  2018

[5] Labour Force Australia, Accessed 21 March 2019.

[6] DHS Administrative Data

[7] DHS Administrative Data, Media Release the Hon. Paul Fletcher MP, ‘Welfare dependence drops to lowest level in 30 years’, 8 January 2019

[8] DSS Priority Investment Approach – Actuarial Analysis – Internal paper NFP.

[9] DSS Priority Investment Approach – Actuarial Analysis – Internal paper NFP.

[10] DSS Priority Investment Approach – unpublished.

[11] AIHW National Drug Strategy Survey

[12] Bill Shorten, transcript