• Shadow Minister for Human Services Linda Burney. (AAP)Source: AAP
A new audit has found there was “inadequate” evidence to prove the cashless welfare card trial reduced social harm.
18 Jul 2018 - 5:27 PM  UPDATED 18 Jul 2018 - 5:27 PM

Labor is calling on the Turnbull government to abandon further roll-outs of its cashless welfare card scheme, on the back of a report critical of the program's trial phase. 

In December 2014, the government agreed to trial the card system to test whether social harm caused by alcohol, gambling and drug misuse could be reduced by placing 80 per cent of a participant's income support payment onto a card. The card cannot be used to buy alcohol or gambling products or to withdraw cash.

The initial $18.3 million trial in Ceduna, South Australia, and in the East Kimberley, Western Australia, which has since been extended, would also inform the development of a lower-cost welfare quarantining program.

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The card has been highly criticised for targeting Indigenous Australians, as 78 per cent of those who are on the card are from an Aboriginal or Torres Strait Islander background.

A report released on Tuesday by the Australian National Audit Office (ANAO) questioned whether the scheme reduced social harm or was value for money for taxpayers.

It found the Department of Social Services' monitoring and evaluation of the trial was "inadequate".

"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," the report says.

Opposition spokesperson for Human Services Linda Burney said the government "failed this fundamental policy test" and that "significantly more work" was needed to evaluate the current trials.

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Ms Burney said Labor supported an extension of trials in Ceduna and East Kimberley until June 30, 2019, but rejected planned extensions to the Bundaberg and Hervey Bay region in Queensland. 

"The government has spent $18 million on just two trial sites, but haven’t ensured this expenditure was properly evaluated," Ms Burney said in a statement. 

"Labor does not support the extension of the cashless debit card beyond the two initial trial sites, or a national roll-out."

The audit also found the department did not document a “value for money” assessment for the card provider's IT build tender.

The department said in its response it accepted the audit's recommendations in relation to risk management, contract management arrangements and better using data to measure performance.

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Despite the findings, Social Services Minister Dan Tehan is standing by the scheme.

"The cashless debit card is making a real difference in the communities where it operates," he said in a statement.

"[It] is an important element of the Government's work to reduce welfare-funded social harm, and to help Australians escape welfare dependency.”

Mr Tehan claimed, an "Independent evaluation by Orima Research found gambling, alcohol and drug consumption were reduced in Ceduna and East Kimberley."

-With AAP