The number of people using buy-now-pay-later services linked to their cashless debit card (CDC) has complicated the federal government’s plan to abolish the program.
Key points:
- Social Services Minister Amanda Rishworth says transitioning people off the card will take time as they have become tied to buy now pay later services
- The government rushed through debate on legislation to end the card, amid concerns that any delay could cause financial problems for people
- Legislation to end the card is expected to pass the House of Representatives today
During the election campaign, Labor pledged to end the scheme, which quarantines 80 per cent of a person’s welfare payments on a card that cannot be used for alcohol, gambling or cash withdrawals.
More than 17,000 welfare recipients in the Goldfields and East Kimberley regions of Western Australia, Ceduna in South Australia, as well as Bundaberg and Hervey Bay in Queensland, are on the card.
A significant number of them have linked their card to buy now, pay later services such as Afterpay, which allows a person to buy products in advance but pay for them in installments.
Social Services Minister Amanda Rishworth said this meant it could take some time for people to transition from the card.
“A range of deductions that participants have attached to their card means you can’t close the card overnight,” he said.
“What you need to do is work with individual members, if necessary, to work out their final arrangements to make sure that when the card ends, they’re not stuck in any unusual financial arrangements that lead to them incurring fees or debt .”
The government last night rushed to debate legislation to end the CDC, amid concerns that any delay could cause financial hardship for some people.
The cashless debit card contract will end in December, and a sunset clause in current legislation means the program would end at the end of the year.
The government wants to cancel the program much earlier.
Ms Rishworth said declaring the bill “urgent” would ensure it would be passed in time to deal with the complexities created by buying now and paying for services later.
“We want to make sure there’s enough time to transition all card participants safely to make sure there’s enough time to arrange the arrangements so everyone has the support they need,” he said.
“And without getting that legislation, we won’t necessarily have enough time to do it safely.”
Social Services Minister Amanda Rishworth says it could take some time for people to transition from the card. (ABC News: Matt Roberts)
Debate on legislation
To speed up a vote on the legislation, House Leader Tony Burke used a new “urgent bill procedure” to shorten debate.
Addressing parliament, he noted that he could have ended the debate entirely, but instead suggested a reduction in speaking time.
“I think the most practical way to deal with the urgency of the bill but still provide a reasonable opportunity for members to speak is to declare the bill urgent,” he said.
The House of Representatives sat until shortly after 9.30pm to discuss the legislation, and Queensland Coalition MP Keith Pitt, whose electorate includes thousands of people in the CDC, attacked the decision to shorten the debate
“What an appalling attack on democracy, this is outrageous. We are elected to come here to speak,” he told Parliament.
In his speech, Pitt reiterated his support for the card and said it should not be ruled out.
“This was a harsh policy, but it was the right policy, in every test site it has been an absolute success,” he said.
There are mixed views in communities about whether the card has had a positive impact and a review of the scheme was inconclusive.
While most Coalition members oppose scrapping the card, Liberal MP Bridget Archer has already raised concerns about the program.
However, he told parliament he is worried it will end too soon.
“I am choosing to abstain as, while I want to see the end of this system, I still have significant reservations that Labour’s proposed transitions do not sufficiently support those who want to help as they move away from card,” he said.
Once the card is withdrawn, people can apply for voluntary income management.
Legislation to end the card is expected to pass the House of Representatives today and will be considered by the Senate in September.