Money well spent? Weighing up the cost of cashless cards

GOING DOWN: Human Services Minister Alan Tudge said the system had been expensive to set up but ongoing costs would reduce as time went on.
GOING DOWN: Human Services Minister Alan Tudge said the system had been expensive to set up but ongoing costs would reduce as time went on. Contributed

In the third part of our cashless welfare card series, the NewsMail looks at the cost of rolling the scheme out in Bundaberg.

THE cost of the cashless card trial to the Federal Government was $18.9 million.

Indue, the private company that ran the trial, was paid at least $7.9m, while the government spent $2.6m on its own administrative costs and $2.6m on support services.

With 1850 participants, the final bill for each person came in at $10,000.

A Newstart recipient receives about $14,000 in benefits a year.

Under the cashless card, some welfare recipients have 80% of their benefits quarantined so it cannot be used to buy alcohol, gamble or withdraw cash.

SA Greens Upper House MP Tammy Franks said it was ludicrous to pay $10,000 per person to run the trial.

"Someone's making a profit here and it's certainly not those who most need it,” she said.

But the government said the cashless card roll-out would be different and would not necessarily be run by Indue.

All merchants would be automatically switched on to accept the card - except those who sell alcohol or gambling products.

Only mixed merchants (those selling alcohol or gambling with other products) would need to go through a process with the Department of Social Services, resulting in an agreement being that the merchant agrees not to sell banned products via cashless cards. There is no cost to merchants.

But Human Services Minister Alan Tudge said the system had been expensive to set up but ongoing costs were much smaller and would reduce as time went on.

Member for Bundaberg Leanne Donaldson said small business in Ceduna had been adversely affected by the cashless card.

Ceduna business owner Malcolm Spry told the Guardian he was out of pocket by $100,000 - but he provided goods to customers on credit and those people reneged on repaying him.

Mr Spry said that had not happened before the cashless card trial, and he said he believed it's because the government had taken away recipients' ability to manage their budgets.

Independent research of the trial sites largely ignored the economic impact of the cashless card.

However, it did find that 78% of participants in both trial sites, Ceduna and East Kimberley, had not changed where and how they shopped since the change.

Only 18% expressed concern about their ability to access allowable goods and services.

Some stakeholders in Ceduna reported issues with people having enough cash to buy from second-hand websites, sport club canteens and community event tickets.

In East Kimberley, it was reported the card did not always work.

The report also found people with cashless cards bought more fruit and vegetables than they did previously.

TOMORROW: Part 4 - Social impact

Topics:  alan tudge cashless card cashless welfare card ceduna east kimberley federal government

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