The government will push ahead with the expansion of its cashless welfare card trials, despite the auditor general finding it was unclear whether the program was actually reducing social harm.
An auditor general’s report published on Tuesday found it was “difficult” to evaluate the success or cost-effectiveness of the program, which aims to reduce alcohol and gambling-related harm by restricting the way welfare recipients can spend their money.
“The Department of Social Services largely established appropriate arrangements to implement the cashless debit card trial, however, its approach to monitoring and evaluation was inadequate,” the report found. “As a consequence, it is difficult to conclude whether there had been a reduction in social harm and whether the card was a lower cost welfare quarantining approach.”
Critics of the cashless welfare cards have seized on the findings, urging the government to drop what they describe as a “social experiment”.
But the minister for social services, Dan Tehan, said the flaws identified by the auditor general were being addressed and the program remained an “important element of the government’s work to reduce welfare-funded social harm”.
“The cashless debit card is making a real difference in the communities where it operates,” Tehan said. “People are using the cards to pay for everyday essential items such as food, clothing and energy bills, instead of spending welfare money on alcohol, drugs and gambling.”
The cards work by quarantining 80% of a person’s welfare to a debit card, which cannot be spent on alcohol or gambling.
The cards are already being trialled in Ceduna in South Australia and East Kimberley in Western Australia, but have been criticised as an overly punitive, paternal and blunt tool for addressing complex social problems. The program is not targeted at Indigenous Australians, but they are disproportionately affected.
The government is planning further trials in WA’s Goldfields region and at a fourth site.
Tehan pointed to the positive findings made by the auditor general about the government’s consultation with local communities and the governance arrangements behind the trials.
He said the government had accepted all of the report’s recommendations and his department had appointed a chief evaluator, implemented a new data monitoring strategy, and improved contract management, risk management and procurement practices.
The government has relied on a largely positive, independent 12-month evaluation of the program by Orima, a consultancy firm, to justify the trial.
But the auditor general found the Orima report did not consider all available data. It also found the costs of the evaluation had blown out considerably.
The Greens senator Rachel Siewert said the Orima evaluation had been deeply flawed. She called on the government to “put an end” to the program.
“When the government first announced these ‘trials’ I continually pointed out that the baseline data was not being collected, nor was there a comparable site without the card, to actually gather evidence about the card’s effectiveness,” Siewert said.
“Now the auditor general has unsurprisingly reported that the evidence base behind performance reports to the minister has been lacking.”
“Communities have been through enough of this social experiment, which the government cannot claim is working.”
