The majority of past cashless debit card users have said the ending of the program was a positive step that reduced stigmatisation and discrimination but some reported it led to “poor decision making” and financial coercion once the controversial scheme was abolished, a review has found.
The review by the University of Adelaide found reports of alcohol use and gambling had increased in most of the areas where the card was formerly used. But it noted “no causal statements can be issued” about whether the card’s abolition was to blame, saying other factors, like local trends and the cost-of-living crisis, could be at play.
The card, established in 2016 under the then Coalition government, quarantined 80% of a person’s welfare payments on to a debit card that could not be used to withdraw cash or buy alcohol or gambling products. The card was rolled out to communities in the East Kimberley, Ceduna, Bundaberg and Hervey Bay, Cape York and Goldfields regions.
Labor abolished the card soon after coming into government saying its end would allow participants to access cheaper food and goods.
A 2022 Australian National Audit Office report was highly critical of the scheme. It found the Coalition had not demonstrated whether the scheme was working or if it was “meeting its intended objectives”.
However some critics voiced concerns that abolishing the program would lead to rises in social harms related to alcohol, gambling or neglect.
The university report, released by the government on Friday, found “a majority of past CDC participants and a minority of stakeholders (particularly those located in Bundaberg-Hervey Bay) felt the ending of the program was a positive step that reduced perceived discrimination and stigmatisation and provided an opportunity to implement more effective policies and programs”.
“In contrast, a majority of stakeholders and a small number of past CDC participants informing the review were disappointed that the program had ended as they considered that it had generated positive impacts and were concerned about increasing social issues being experienced since program cessation.”
There was “widely expressed” dissatisfaction about the consultation conducted by the government about the end of the CDC, the report noted. Criticism included how quickly the system was wound down, and the report noted many respondents felt they had “insufficient time … to prepare for the ending of the program”.
Some participants said the transition was “fairly smooth” but others raised concerns about a lack of information and support, especially for those without access to technology or with limited literacy skills.
The report found the cessation of the card had decreased feelings of discrimination, stigma and shame, and given people more control and freedom over their finances. One participant quoted in the report said: “I just felt of it as a discriminatory program, and so I was happy to see it go.”
Other participants said they hoped CDC funds would be redirected to more direct on-the-ground services in their communities.
However, many stakeholders – which included organisations such as service providers and agencies, Indigenous leaders, police, child protection, education and health organisations – did not back the CDC’s end.
While many participants backed the program’s end, the report said some admitted that “greater autonomy and control had resulted in poor decision-making in relation to financial management and the increased misuse of alcohol and gambling”.
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“Some respondents also felt that instances of humbug and financial coercion had increased since the cessation of the CDC program.”
While many in the Bundaberg-Hervey Bay site said they didn’t believe the card was helpful, and therefore its cessation had not had a major effect, people in other sites felt differently.
The report said “alcohol consumption and misuse increased considerably” in the Ceduna, East Kimberley and the Goldfields sites, as well as incidences of public drinking and intoxication, and alcohol-related violence. Gambling activity was also reported to have increased in Ceduna and East Kimberley.
It went on to say, however, that the review was not equipped to formally evaluate data around such changes, and that therefore “no causal statements can be issued from the analyses” in the report.
Social services minister Amanda Rishworth said there were “complex, intergenerational issues across remote and rural Australia” that the government was seeking to address. She maintained that abolishing the card had major benefits.
“Previous participants of the Cashless Debit Card said the card was dehumanising and stigmatising. Without the card, previous participants said they can reduce cost of living pressures by purchasing second-hand items or food from the local market,” she said in a statement.
She said ensuring communities can “chart their own pathway to addressing entrenched disadvantage is how we will see sustained change”.