Doorstop 4 Treasury Place, Melbourne

Release Date: 
22 March 2015

Alan Tudge: Last year Andrew Forrest delivered his "Creating Parity" report and one of the recommendations was to introduce a cashless debit card, to apply in certain high welfare communities which suffer from alcohol and drug abuse. We've been consulting on that recommendation for almost 12 months now, speaking to community leaders and speaking with financial institutions.

Today we are informing you that we are proposing to proceed with a trial of this card in a small number of locations. Now there will be a lot more consultation between now and the end of the year when we proceed with this trial because we want to be steady, we want to get it right before making any further decisions.

The overall objective of the card is to reduce the overall social harm which is caused by welfare-fueled alcohol and drug abuse, particularly against women.  As you may know in some of these communities alcohol and drugs are the absolute poison that runs through these communities contributing to assaults and violence against women which are frankly unacceptable.

The concept of the card is that it would operate just like an ordinary Visa or EFTPOS debit card where you could use it  for anything, you could use it anywhere but you simply could not purchase alcohol and gamble with it and because your cash was limited, you would not be able to purchase drugs with it.

What would this mean if you were a responsible person in one of the trial sites? Well if you're in a trial site and you had this card and you're not a gambler, you're not a big drinker, and you don't purchase drugs then the impact on you would be that instead of reaching for cash to purchase something you would reach for the card and tap.  The net positive though is that his could have a dramatic impact on the community in terms of rates of violence and rates of assaults, particularly against women and we think consequently this is a trial worth having.

Any questions?

Journalist: Can you please explain how this will be different from the Basics Card. Isn't income management like the Basics Card. Why is (inaudible)?

Alan Tudge: Two key differences. One is that the proposed cashless debit card would operate through the ordinary financial services platforms which means it could be used at ordinary ATM's, it could be used anywhere for anything.

The second thing is the Basics Card is quite restrictive in terms of the things you must spend your money on. With this card, you could use it for anything but you simply cannot use it to purchase alcohol or gamble with, and because cash will be limited, you can't purchase drugs with it.

Journalist: When will you be rolling it out and when will you choose a trial site?

Alan Tudge: The objective is to trial the card in a small number of communities later in the year.

We'll be choosing trial sites on the basis of a couple of criteria. Firstly where there is high welfare dependence and high harm caused by welfare fuelled alcohol and drug abuse. And secondly, where there's some community leadership which is at least open to trialling the card in their community.

Journalist: What kind of response are you getting from the community at this stage?

Alan Tudge: We've been consulting across Australia and there are some community leaders who have suggested they would like to continue the discussions. There are some who have publicly called for the card to operate in their community.

Journalist: (Inaudible) that this won't do anything to curb addiction and addicts will find another way if their income is restricted. It could lead to crime, they also say the government has pulled a lot of money out of domestic violence centres and support services and (inaudible)

Alan Tudge: The rates of violence against women in some the high welfare communities is completely unacceptable. It's one in ten per annum in some communities.

We want to trial this card because we believe that it could have an impact on reducing assaults and reducing violence in the community.

We're proceeding cautiously with it. We want to trial it. We want to assess it before making any further decisions. But we think it is worth proceeding with and particularly for communities who have been calling for it to be introduced.

Journalist: Just how many people are on the Basics Card in Australia at the moment and would this card replace that card if the trials were successful?

Alan Tudge: This card would operate alongside the Basics Card in our trials. We're going to have the trials then we're going to make further decisions after that.

Journalist: How many people on the Basics Card and what are the problems with it at the moment? Are there a lot of (inaudible), a lot of lost cards and does it cost the government a lot of money to manage how many people's finances?

Alan Tudge: The Basics Card operates primarily in the Northern Territory to all long term unemployed people. From memory there's over 20,000 people on the Basics Card.  Now it's had many benefits and indeed many people who come off the Basics Card choose to voluntarily stay on it.

It is an expensive card to operate. It's not connected to the financial services platforms and it's quite restrictive for many people as well.

The difference of this cashless debit card is that it would be connected to the ordinary financial services platforms which means you could use it anywhere and purchase anything but it would just have the restrictions on purchasing alcohol and gambling.  And because cash was limited you wouldn't be able to purchase drugs with it.

Journalist: (Inaudible) several cities have already expressed interest. (Inaudible) why they have expressed that interest?

Alan Tudge: We're going to be having ongoing discussions with community leaders over the weeks and months ahead in relation to this and we're not announcing today where the trial sites are going to be because that is going to be informed by ongoing discussions over the months ahead.

Journalist: The card isn't completely cashless though is it? There's also some component of cash on it and (inaudible) won't be spent on drugs and gambling?

Alan Tudge: Andrew Forrest recommended a completely cashless card. We're likely to proceed with at least an element of cash because we don't live in a cashless society. There are still are some things where you do need a bit of cash for... maybe it's the kids tuck shop or purchasing a ticket on the bus.

We're going to be informed by our discussions with community leaders as to precisely what the figure should be but it needs to be a reasonably high figure that is on the cashless debit card in order to meet that overall objective of reducing the harm caused by welfare fuelled alcohol and drug abuse.

Journalist: Will this just lump all welfare recipients into the category of abusers and addicts who can't manage their finances?

Alan Tudge: We've got an overall objective here of addressing the enormous social harm caused by welfare fueled alcohol and drug abuse in some of these communities.

We know that in some places one in ten women are being assaulted each year. Typically they're fuelled by alcohol and typically that's fuelled by welfare.

That is just an unacceptable situation. So we want to trial this card to see whether this card can have an impact on that situation.

Now if you're a responsible person, as I said before, and you're in a trial site and you're issued with the card, if you're a responsible person that is not a drinker, you're not a gambler, you're not taking drugs then the impact on you is that instead of reaching for cash, you'll tap with a card, but the potential benefits in that community can be absolutely life changing for many women and children.

Journalist: (Inaudible) the trial sites, the cash from the welfare card will only apply to those who are currently on the Basics Card or it will be everybody who received welfare?

Alan Tudge: This would operate alongside the Basics Card. We haven't determined the locations of the trial site yet and we're going to be engaged with community leaders as to precisely who the card should apply to, but framed by that overall objective of wanting to reduce the harm caused by welfare fuelled alcohol and drug abuse.