“Welfare”: Punitive measures to be extended

Written by: Nick G. on 12 November 2020

 

The federal government is set to extend the punitive net of compulsory income management (CIM) over even more Australians.

An element of secrecy surrounds details of the expansion of the cashless debit card (CDC) operated by the private company Indue.

Privatisation of public welfare is the best that capitalism can do for many Australians. 

Began with an attack on First Peoples

This is the logical result of government policy development that began in 2007 in the wake of the NT Emergency Response when First Peoples who volunteered for the scheme had 50% of their welfare payments quarantined, while those forced onto the scheme by government agencies had 75% quarantined. They could only use the BasicsCard at approved stores. Thirteen years later, the BasicsCard still operates in the NT.

In 2013, Liberal PM Tony Abbott asked mining billionaire Andrew “Twiggy” Forrest to review Indigenous employment and training programs. The Forrest Report recommended that government payments to unemployed people, carers, people with disabilities and single parents should be 100% quarantined, and introduced the idea of the ‘Healthy Welfare Card’.

Forrest, who suffers from billionaire myopia, saw welfare as a “cash barbecue” and his solution was to “block the issue of cash” to people placed on welfare.

A four-year longitudinal study of compulsory income management in the NT recently found that the policy failed in every key performance measure and did not meet any objectives in thirteen years. It also led to the entrenchment of poverty, increased welfare dependency, and increases of incidents of suicide, domestic violence and predation on children by criminals visiting income managed areas.

At the time of the NT Intervention, we condemned the introduction of the BasicsCard, warning that First Peoples were being used as guinea pigs for a punitive measure that would be extended to all welfare recipients.

Forrest’s proposal was adopted by the government but in slightly modified form: 80% of welfare payments were quarantined. So-called “trials” of the CDC scheme were introduced in March 2016 and have been extended to five regional areas. The “trials” were a fig-leaf for the permanent introduction of CIM. Invariably, the “trials” have been extended beyond their expiry dates.

The trials are currently due to expire in December but under the Social Security Amendment Bill, which is currently before parliament, the scheme would be made permanent. 

Indue overdue for removal

In 2016 the government outsourced the operation of the CDC to Indue Ltd., a private company owned by financial institutions that are members of the Customer Owned Banking Association, the industry advocate for Australia’s customer owned banking sector. It is owned by its 72 member institutions: building societies, credit unions and mutual banks. It has 134 employees at its head office in Queensland and generates $63.84 million in sales (USD).

Indue issues its own Indue Card for people on CIM. The cards are attached to a separate account set up without consent of individuals forced onto the program. These accounts are strictly managed through different payment categories. Indue has legal ownership of the quarantined portion once it has been paid into their account. In addition, the cashless welfare card only allows users of the card to buy products at approved sellers that support electronic Visa payments.

Neither the government nor Indue have said how much Indue is paid for every person forced onto the scheme, but estimates by social welfare groups indicate that between $4000 and $10,000 has been paid to Indue to “manage” the Newstart welfare payment of $40 per week or less than $15,000 per year.  Those payments increased during the Covid-19 pandemic, but are being wound back by a government that believes, as Social Services Minister Anne Ruston said again this week, that dole payments, increased during the pandemic, are discouraging people from seeking work, despite there being 12 applicants for every job vacancy.

Neither the government nor Indue will say how much it will cost to make CDC permanent.  The Australian Competition and Consumer Commission has thrown a veil of secrecy over Indue, exempting it from provisions of the Competition and Consumer (Consumer Data Right) Rules 2020, and specifically:

(a) Rule 2.4(3) of Part 2 (the obligation to disclose required product data in relation to a product data request) and all related rules; (
b) Rule 3.4(3) of Part 3 of the Rules (the obligation to disclose required consumer data in relation to a consumer data request made by an eligible consumer), and all related rules; and 
(c) Rule 4.6(4) of Part 4 (the obligation to disclose required consumer data in relation to a consumer data request made by an accredited person), and all related rules.

This exemption applies until the earlier of: a. 1 July 2023; or b. 12 months from the date the Cashless Debit Card program is no longer a trial and is implemented as a permanent policy arrangement.

A Department of Social Service spokesperson justified the secrecy, saying “The cost of making the Cashless Debit Card permanent cannot be published as it is commercial-in-confidence and could impact future procurement activities.”

Suffering set to continue

There has been no evidence in any study of CIM and its CDCs that the scheme has benefitted those whose drug and gambling addictions were used to justify such coercion. Senate inquiries from 2015, 2017 and 2018, have all shown that in the trial regions, there has been no change in crime rates (in some areas such as Kununnura and Wyndham, there was actually an increase in crime statistics, as well as an increase in self-harm and suicide). Despite its claim to high-tech management of people’s compulsorily-acquired incomes, many reports have been made of underpayments, repeat payments and non-payments which are all sheeted home to the Indue “customer”. To top it all off, there is the indignity of having to be seen shopping with the “druggies’ card”.

Neither the government nor Indue can conceal the harm done when welfare is transformed into a privatised, punitive and coercive “welfare”.

Compulsory income management must be abolished.

Welfare payments must be increased to a living income.

Privatised management of welfare payments must end. 

 

Print Version - new window Email article

-----

Go back