Purpose of the bill
The Social Security (Administration) Amendment (Income Management and Cashless Welfare) Bill 2019 (bill) was introduced into the House of Representatives on 13 February 2019.
The bill seeks to extend the cashless debit card trial in three sites and the Cape York income management program to 30 June 2020.
Provisions of the bill
Section 123UF of the Social Security (Administration) Act 1999 (Cth) (Social Security Administration Act) provides that a person in a Cape York Welfare Reform community may become subject to income management if the Family Responsibilities Commission (FRC) refers them for income management before 1 July 2019.
Item 1 of the bill omits references to 1 July 2019 in paragraphs 123UF(1)(g) and 123UF(2)(h) of the Social Security Administration Act and substitutes 1 July 2020 to allow income management to continue in Cape York Welfare Reform communities until 1 July 2020.
Paragraph 124PF(1)(b) of the Social Security Administration Act currently provides that the cashless debit card trial is due to end on 30 June 2019 for all trial sites other than the Bundaberg and Hervey Bay region.
Item 2 of the bill repeals paragraph 124PF(1)(b) and substitutes a provision that specifies the cashless debit card trial is due to end on 30 June 2020 in all trial sites.
The bill does not impact the cashless debit card trial in the Bundaberg and Hervey Bay region which commenced on 29 January 2019. The trial in this region is currently expected to operate until 30 June 2020.
The financial impact of extending income management in all current locations, including the Cape York region, is $70.8 million over the forward estimates.
The explanatory memorandum to the bill notes that the funding associated with the extension of the cashless debit card to 30 June 2020 is not for publication as negotiations with commercial providers are yet to be finalised.
The Senate Standing Committee on the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights had not reported on their consideration of the bill at the time this report was prepared.
Consideration of previous related legislation by legislative scrutiny committees is outlined in the Community Affairs Legislation Committee's (committee) previous reports on this matter.
Conduct of the inquiry
On 14 February 2019, the Senate referred the provisions of the bill to the committee for inquiry and report by 1 April 2019.
Details of the inquiry, including a link to the bill and associated documents, were placed on the committee's website. The committee wrote to relevant individuals and organisations inviting submissions to the inquiry by 7 March 2019. Submissions continued to be accepted after that date.
The committee received 38 submissions and held a public hearing in Adelaide on 18 March 2019. The committee thanks all of those who contributed to the inquiry. Submitters and witnesses are listed at Appendices 1 and 2.
Note on references
References to the committee Hansard are to the proof transcript. Page numbers may vary between the proof and official Hansard transcript.
Cape York Income Management
The committee has previously considered an extension to the sunset date for the Cape York Income Management program in this Parliament. The committee tabled its report on the Social Services Legislation Amendment (Queensland Commission Income Management Regime) Bill 2017 on 20 June 2017.
In both its previous inquiry and this inquiry, the committee heard that Cape York income management is achieving its objectives, assisting individuals to meet their obligations to the community and has the ongoing support of local leaders in the community.
The committee received a small number of submissions to this inquiry which suggested that the cashless debit card trial was to be extended into the Cape York region. The committee would like to clarify that this is not the case. The bill seeks to extend the current Cape York income management model within the Cape York Welfare Reform communities.
The Government announced its intention to extend Cape York income management in the Mid-Year Economic and Fiscal Outlook 2018-19 measure 'Income Management – extension and consultation'. Cape York is the only income management location with a sunset date in legislation and as such, amendments to the Social Security Administration Act are required to extend income management and implement the measure.
The Cape York income management program operates in six remote Aboriginal and Torres Strait Islander communities in the region as part of the Cape York Welfare Reform initiative.
Cape York Welfare Reform is a partnership between the communities of Aurukun, Coen, Hope Vale, Mossman Gorge and Doomadgee as well as the Cape York Institute, the Australian Government and the Queensland Government.
Cape York income management is administered in conjunction with the FRC an independent statutory authority of the Queensland government, which facilitates conferences between Local Commissioners and individuals before determining whether a Conditional Income Management order is appropriate.
The Cape York model
The committee received evidence which outlined that the unique design of the Cape York Income Management model was fundamental to its support within the community. The Cape York income management model differs from other models of income management in that it was developed by the communities in which it has been implemented and encourages behavioural change through attaching reciprocity and communal obligations to income support payments.
An individual may be subject to income management if the FRC receives a notification from a Queensland government department in the following circumstances:
The Department of Education (DoE) must submit a School Attendance notice to the Commission if a child is absent for three full, or part days of a school term without reasonable excuse, or submit a School Enrolment notice where a child of compulsory school age is not enrolled to attend school.
The Department of Child Safety, Youth and Women (DCSYW) must submit a Child Safety and Welfare notice where the Chief Executive becomes aware of an allegation of harm or risk to a child.
The Department of Justice and Attorney-General (DJAG) must submit a Court Offence notice if a person is convicted of an offence, or if a domestic violence protection order is made against a person.
The Department of Housing and Public Works (DHPW) or the provider of social housing must submit a Tenancy Breach notice if the tenant has breached their social housing tenancy agreement.
The FRC explained that once a notification is received about an individual within their jurisdiction, the matter is referred to the relevant Local Commissioners to decide whether the individual should be ordered to attend a conference.
Conferences are confidential and held in an informal manner where the individual is able to discuss why a notification was received and any related issues. Following the conference, Commissioners are able to determine the best approach for the individual in the circumstances including: no further action; reprimand the individual; encourage the individual to enter into a Family Responsibilities Agreement; refer the individual to relevant community support services or; place the individual on a Conditional Income Management order.
Conditional Income Management orders are issued for a defined period of time (generally 12 months) and the Local Commissioners determine what percentage (65, 75 or 90 per cent) of the community member's income support payments will be quarantined.
The FRC noted that Conditional Income Management orders are generally issued to stabilise an individual's circumstances, particularly if they care for children or vulnerable people, or if an individual has failed to attend two scheduled conferences, is not complying with their Family Responsibilities Agreement or the FRC continues to receive notifications the individual is not meeting their obligations. Income management therefore provides an incentive for community members to behave in a socially acceptable manner and consistent with community expectations.
The Cape York Institute submitted that the Cape York income management model, through the FRC, shifts power and responsibility that would otherwise be held by government agencies to respected local elders and community leaders in their role as Local Commissioners of the FRC. In doing so, the Cape York income management model restores the social and cultural authority of community elders and leaders who only place an individual on income management following restorative justice conferencing and only when an individual has failed to meet their pre-determined obligations.
This view was echoed in the Strategic Review of Cape York Income Management (Strategic Review) conducted by the Queensland University of Technology. The Strategic Review found that:
The context within which CYIM [Cape York income management] is delivered (namely, through the FRC primarily by its Local Commissioners) is a key driving factor for any successes that can be attributed to it. This sets CYIM apart from other models in Australia, and enables it to be delivered in a way that is more culturally appropriate, promotes the restoration and rebuilding of Indigenous authority, and is uniquely matched to the individual circumstances of FRC clients.
The Strategic Review also noted that the number of individuals placed on Conditional Income Management orders has decreased from 20.7 percent in 2008–2009 to 7.7 percent in 2017–18, demonstrating the effectiveness of Cape York income management model.
The Cape York Institute affirmed the view that the Cape York income management model motivates and builds capacity for change by linking individuals with support services, and utilising income management as a tool within a holistic approach to support disadvantaged people.
Impact on communities
The committee heard that Cape York income management is continuing to have a positive impact on the Cape York Welfare Reform communities. The Cape York Institute told the committee:
The overwhelming feedback from communities now is that they do feel that the Cape York Welfare Reform model and the Family Responsibilities Commission model are a supportive model that can help people to make positive changes.
Following an announcement by the Queensland government to transition Cape York Welfare Reform communities out of the FRC, Local Commissioners from each community wrote to the Queensland government expressing their support for the continuation of Cape York Welfare Reform and the benefits it has brought to their communities. The Local Commissioners of Mossman Gorge wrote:
Our Community as a result of leadership and the Cape York Welfare Reform model has transformed out little town and our people. We took a strong stand more than 10 years ago, and worked hard in the design phase, to develop a comprehensive attack on the dysfunction that was plaguing our community. Change takes time but we are succeeding. … Most of our children now attend school everyday thanks to the work of the Family Responsibilities Commission and the Cape York Welfare Reform model that supports it.
This view was supported by the Strategic Review which found significant qualitative evidence showing a reduction in the consumption of alcohol and drugs and incidents of violence and crime, as well as improved outcomes in child health and wellbeing and engagement in school.
The Department of Social Services (department) noted that the Strategic Review's findings were similar to the 2012 Evaluation of Cape York Welfare Reform and that extending Cape York income management would provide certainty and continued support for each community.
The committee notes the ongoing support of the communities of Aurukun, Coen, Hope Vale, Mossman Gorge and Doomadgee for the continuation of Cape York income management.
The committee is encouraged by the findings of the Strategic Review that Cape York income management is reducing incidents of social harm, improving the health and wellbeing of children and is supporting and rebuilding local authority in each community.
Cashless debit card trial
The committee has inquired into and reported on legislation relating to the cashless debit card trial on three previous occasions. In each case the committee recommended that the bill be passed.
The committee received evidence which reflected the diverse range of views on the cashless debit card trial. While some submitters were supportive of the continuation of the trial, other submitters continued to raise similar concerns to those identified in the committee's previous inquiries into the cashless debit card trial.
Primarily those submitters were concerned that that there has been insufficient consultation with effected communities, that the cashless debit card trial limits participants' human rights and that the extension of the trial has been based upon a flawed evaluation. These concerns are outlined further below.
Under the cashless debit card trial, 80 per cent of a recipient's income support payment is placed in a restricted bank account which can only be accessed using a debit card and cannot not be used to purchase alcohol or gambling products, withdraw cash or purchase cash-like products (e.g gift cards). The remaining 20 per cent of their income support payment is available for use at the individual participant's discretion.
The cashless debit card trial commenced in Ceduna, South Australia on 15 March 2016 and the East Kimberley, Western Australia on 26 April 2016. In the 2017–18 Budget, the Government announced that it would extend the cashless debit card trial in the existing sites of Ceduna and the East Kimberley by one year to 30 June 2019, and expand the trial to two new sites.
The cashless debit card trial commenced in the Goldfields region of Western Australia on 26 March 2018. The Goldfields trial site includes the local government areas of Kalgoorlie-Boulder, Laverton, Leonora, Coolgardie and the state suburbs of Menzies, Kookynie and Ularring in the Shire of Menzies.
The cashless debit card trial commenced in the Bundaberg and Hervey Bay region of Queensland on 29 January 2019 and includes all towns within the boundaries of the federal electorate of Hinkler. As noted above, this bill does not impact the trial operating in the Bundaberg and Hervey Bay region.
Consultation with trial sites
Several submitters expressed the view that community members within each of the trial sites had not been adequately consulted prior to the implementation or extension of the cashless debit card trial.
Anglicare Australia submitted that the consultation conducted by the government was not representative of the diversity of views in each community and that card users were excluded from consultation prior to commencement of the trials.
The Council of Single Mothers and their Children and National Council of Single Mothers and their Children suggested that serious investment in community consultation was required to examine the diverse range of views and both local and international evidence.
The department advised the committee that extensive consultation occurred with a range of stakeholders in each of the trial sites prior to implementation of the cashless debit card:
Approximately 300 consultations were held in Ceduna and surrounds, and there were 110 consultations held in the East Kimberley. Those consulted with included community members, Indigenous leaders, service providers, police, and local and state government agencies. In the Goldfields region, there were over 170 meetings with over 300 people involving over 86 different organisations. In addition, more than 200 people attended 10 public community information sessions between 21 August 2017 and 2 October 2017. Those were held in Kalgoorlie, Leonora, Laverton, Coolgardie, Kambalda and Norseman. In the Bundaberg-Hervey Bay region between May and December 2017 there were 188 meetings with a broad range of stakeholders, including the government sector, service providers, the business sector, community members and different levels of government. This included three community information sessions hosted by the department in Childers, Bundaberg and Hervey Bay, which were attended by approximately 120 people.
The department submitted that further consultation had occurred with stakeholders in each of the three trial sites affected by this bill and that stakeholders have expressed the view that the cashless debit card trial is having a positive impact in their communities and that the trial should continue.
Human rights implications
Some submitters expressed their ongoing concern with the human rights implications of the cashless debit card trial, proposing that the limitations placed on a participant's human rights were not reasonable or proportionate in light of the objectives of the trial.
In particular, submitters noted that while the proportion of Aboriginal and Torres Strait Islander participants has decreased to 33 per cent since the expansion of the trial, there remains a disproportionate impact of the trial on Aboriginal and Torres Strait Islander peoples which places a limitation on their right to equality and non-discrimination.
The Australian Council of Social Service commented that the limitations placed on a participant's human rights were particularly problematic due to the compulsory nature of the cashless debit card trial.
As outlined in the committee's previous reports on this matter, the cashless debit card trial engages an individual's right to: social security; private life; equality and non-discrimination; self-determination; an adequate standard of living; and the rights of children. Each of these rights is addressed in turn in the bill's Statement of compatibility with human rights (statement of compatibility).
The statement of compatibility notes that a participant's right to social security, private life, self-determination and an adequate standard of living is only limited to the extent that a participant cannot use a proportion of their income support payment to purchase harmful goods (e.g. alcohol and gambling products) in communities where there are demonstrated high levels of community harm. In addition, the cashless debit card trial does not impact a person's eligibility to receive income support payments or the amount received.
By ensuring that a proportion of an individual's income support payment is available to purchase essential goods and services, the cashless debit card program can improve living conditions for children of income support recipients. As will be discussed further below, this view was supported by evidence provided to the committee from community members within each of the three trial sites impacted by this bill.
The department considered that the right to equality and non-discrimination is not directly limited by the cashless debit card trial as it is not applied on the basis of race or cultural factors. The statement of compatibility noted that the location of the trial sites have been chosen based on objective criteria in areas where high levels of welfare dependence and community harm exist, and after extensive community consultation.
The department concluded that, given the objectives of the cashless debit card trial and the prevalence of social harm in each of the trial communities, any limitation on a participant's human rights was reasonable and proportionate.
Some submitters told the committee that card users often faced uncertainty as to whether their card would be accepted when purchasing goods.
The Australian Unemployed Workers' Union submitted that card transactions were generally declined for one of two reasons: a lack of funds in a card holder's account; or issues associated with the card issuer Indue.
The Australian Unemployed Workers' Union went on to explain that a participant's account balance could be checked at an ATM, the Indue office or over the phone, but that this was a time consuming process for many card holders.
The department informed the committee that in 2018, Indue's system was available 99.97 per cent of the time, with the card unable to be used for a total of three hours throughout the entire year.
This year there was a longer outage of Indue's system for approximately six hours on 16 January 2019 which resulted in 2500 declined transactions. Where there is an outage, there are two hotlines operated by the department and Indue which card users can call to receive assistance.
The department added that, on some occasions, outages may be due to a system wide EFTPOS outage which impacts all card transactions and is outside the control of Indue. However, where there is an outage that affects card users, the department works quickly and closely with Indue to resolve the issue, with the shortest outage lasting 11 minutes.
Evaluation and extension of the trial
A number of submitters and witnesses questioned whether the extension of the cashless debit card was adequately justified, given the concerns raised previously, including by the Australian National Audit Office, about the reliability of the evaluation conducted by ORIMA.
The Minderoo Foundation proposed that the cashless debit card trial would benefit from further rigorous evaluation that drew on quantitative and qualitative data, as well as consultation within each of the communities.
The department informed the committee that the Future of Employment and Skills Research Centre at the University of Adelaide had been commissioned to undertake a second independent evaluation of the cashless debit card trial. The second evaluation will include qualitative interviews with both stakeholders and participants, a quantitative survey of participants and analysis of relevant administrative data, with a view to triangulate findings from these three sources.
The Future of Employment and Skills Research Centre has already conducted a baseline data collection within the Goldfields trial site which found that the region faced significant social, welfare and economic issues prior to the introduction of the cashless debit card and that early positive impacts have been observed by community members.
The department noted that legislation now requires an independent review of any evaluation of the cashless debit card and expects to commission the independent review in the second half of 2019.
Some submitters noted that, as at 30 June 2018, the cost of the cashless debit card trial in Ceduna, the East Kimberley and the Goldfield was approximately $34 million. The Queensland Council of Social Service suggested that this government funding would be better directed to support services in the communities.
Other witnesses told the committee that they consider the cashless debit card to be an effective tool within a tool box of initiatives and should continue to operate in conjunction with other community and support services.
With the recent expansion of the trial to the Bundaberg and Harvey Bay region, the Minister for Social Services stated that the operational cost of the cashless debit card is $1000 per participant, representing good value for taxpayers.
Reduction in social harm
The committee received evidence from community members within the trial sites and local councils that the cashless debit card trial was effective at reducing social harm within communities.
The District Council of Ceduna told the committee that since the introduction of the cashless debit card, there had been a reduction in crime as well as a significant improvement in the quality of life of disadvantaged people and their children within the Ceduna region.
The Kalgoorlie-Boulder Chamber of Commerce and Industry conducted a survey of their members seeking feedback on the cashless debit card trial in the Goldfields region. Approximately 72 per cent of respondents advised that since the implementation of the cashless debit card, there had been a decrease in antisocial behaviour in the central business district of Kalgoorlie. Furthermore, 86.59 per cent of respondents advised that the cashless debit card trial had made positive changes in the Goldfield region and should be continued.
The Shire of Kalgoorlie-Boulder told the committee that since the introduction of the cashless debit card, there had been a reduction in antisocial behaviour, crime and abuse of alcohol in the community. The Shire of Kalgoorlie-Boulder told the committee that it supported the continuation of the trial.
Similarly, the Shires of Coolgardie, Laverton and Leonora from the Goldfield region all wrote to the committee noting the positive impact of the card on their communities and expressing their support for the continuation of the cashless debit card trial in the Goldfields region.
The City of Kalgoorlie- Boulder, the Shire of Laverton and the Shire of Leonora also proposed that the cashless debit card trial be extend to the Shire of Ngaanyatjarraku. The councils informed the committee that there was a noticeable increase in antisocial behaviour within each community when residents of the Shire of Ngaanyatjarraku visited their town and were not subject to the restrictions of the cashless debit.
The Shire of Leonora submitted that:
The comparison between a society in the Northern Goldfields that has the cashless debit card and one without can be demonstrated by the recent disruption of life in Leonora by the impact of visitors from the "Lands", commonly the area east of Laverton towards Warburton and the Shire of Ngaanyatjarraku (NG). These communities are not on the cashless debit card and when in town spend their money as they wish, whilst those who live locally abide by the conditions of the card. The result is that Leonora went from being a quiet peaceful town since the advent of the card, to one where anti-social behaviour prevailed.
Similarly, the Shire of Laverton explained that:
Laverton experiences a huge influx of people visiting from the ‘Lands’, commonly the area east of Laverton towards Warburton and the Shire of Ngaanyatjarraku (NG). The communities within the Shire of NG are not on the CDC and when they visit family in Laverton they are cashed up and bring with them large amounts of money that can readily be used for any intended purpose, including the purchase of alcohol. … Rather than considering the termination of the CDC at the end of the trial period at 30 June 2020, the Federal Government should consider implementing the CDC into all communities.
The City of Kalgoorlie- Boulder expressed the view that:
…it remains essential for the CDC [cashless debit card] to be extended into Tjuntjuntjara and the Ngaanyatjarra Lands (the Lands) given the detrimental impacts itinerant travellers have on Kalgoorlie-Boulder. Visitors from the Lands often camp illegally and place immense pressure the City's resources due to excessive consumption of substances otherwise prohibited by the CDC.
The committee is encouraged by reports from local community members that the cashless debit card is continuing to have a positive impact and reduce the level of social harm in each trial site.
The committee acknowledges that there are concerns regarding the level of consultation with effected communities and the impact of the cashless debit card on participants. The committee believes that the department has continued to consult with stakeholders regarding the implementation and extension of the cashless debit card trial and will continue to work with stakeholders to resolve issues identified with the cashless debit card.
The committee recognises concerns that the cashless debit card trial may limit a participant's human rights. However, the committee is satisfied that the cashless debit card trial only limits those rights to the extent required to realise the objective of the card to reduce social harm and access to harmful goods.
The committee supports the commissioning of a second impact evaluation to further assess the ongoing effectiveness of the cashless debit card trial.
The committee notes that extending the cashless debit card trial in Ceduna, East Kimberley and the Goldfields region will align the legislated end date for the first three trial sites with that of the newest trial site in the Bundaberg Hervey Bay region.
Concluding committee view
The committee is encouraged by reports that the Cape York income management and the cashless debit card trial is having a positive impact on communities and sees significant benefit in the continuation of each policy.
The committee notes that the extension of Cape York income management and the cashless debit card trial reflects the Government's ongoing commitment to improving the lives and economic conditions of participating communities.
The committee recommends that the bill be passed.