• Ceduna was one of the two trial sites for the cashless welfare card which caused deep divisions in the community over its effectiveness. (The Point)Source: The Point
It has been revealed the Federal Government's cashless card trial, which restricts welfare recipients on how they spend their money, is costing taxpayers $18.9 million.
2 May 2017 - 7:22 PM  UPDATED 2 May 2017 - 7:22 PM

The Federal Government's cashless welfare card trial is costing taxpayers about $10,000 per participant. 

Details, released under a Freedom of Information request, says the cost of the cashless debit card trials in Ceduna, South Australia, and Kununurra, Western Australia, is estimated to be $18.9 million, excluding GST. 

The costs includes both departmental and administered funding for the Department of Social Services, which is allocated $2.6 million, and the one-off costs to establish the trial. This includes the IT to build contract and the trial evaluation. 

Another $1 million of additional funding for wrap around services was provided for the Ceduna trial region and a further $1.6 million for the East Kimberley trial site. Almost $8 million is paid to contractor Indue to cover all operational aspects of the trials. 

There are currently 1850 participants in the trial. 

The figures come as the Coalition remains tight-lipped about expanding the pilot program into more communities around the country ahead of the Federal Government's May 9 budget. 

Minister for Human Services, Alan Tudge, told Sky News the costs are accounted for. 

"This is has been a world first trial where inevitably there's been a lot of upfront design and development costs which have been associated with it, and of course the running costs are considerably lower, and they get lower over time, particularly when you get economies of scale," he said.

In a statement, Minister Tudge said, "the actual running costs of the card are a fraction of the up-front costs and we expect those costs to continue to reduce in the normal operating years following implementation." 

He also said the card trials are already seeing positive results. 

"We are already seeing significant positive results from the card with around a quarter of participants reporting they are drinking less alcohol, a third are gambling less and a quarter are using less drugs," he said. 

The trials began in Ceduna and in the East Kimberley in April last year, where a large proportion of the population is Indigenous. They were extended after a report hailed them a success.

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The government has said more communities are willing to give it a go.

"I don't want to speculate in terms of what we might do in the budget, but clearly we've got other regions who are putting up their hands saying, 'listen, we'd like to at least explore the introduction of the card in our area because we've got similar types of problems'," he said. 

The Minister for Indigenous Health and Aged Care says the card has long-term benefits that are substantial. 

"We've seen reductions in family violence, we've seen children getting food and being prepared to be involved in school because they're not hungry, and we've seen a decrease in hospitalisation in emergency departments," he said. 

Mr Wyatt says if communities determine that they want to participate in the trials, then they will work with Minister Tudge. 

"[It] will be negotiated with each community on the basis that they want it and they're prepared to be apart of it," he said.  

But the Opposition says the program is not a solution for everyone.

Labor's Human Services spokesperson, Linda Burney, says Labor will not be supporting a national roll-out. 

"When you hear about the costs in its administration, you have to ask whether or not it's the best way to use resources," she told NITV.

She questions whether the $19 million could be better spent providing different services.

"The cashless welfare card, from Labor's perspective, will not be rolled out nationally. In fact, we have determined that if a community demonstrates without exception that they want the card, then we can consider that, otherwise it has limited value in the sense of being those two communities." 

"You cannot ignore the social issues in many of those communities like Ceduna and Kununurra, they're extensive. But we don't believe that the cashless welfare is the panacea to address all of those social issues," she said. 

The cashless debit cards quarantine eighty per cent of welfare and cannot be used to pay for alcohol, gambling or to withdraw cash.  

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