A Labor-led inquiry into compulsory income management has recommended the government abolish the scheme after receiving a large amount of evidence showing the compulsory SmartCard increases hardship, makes it difficult for women to flee violent relationships, and is discriminatory towards First Nations people.
Labor’s SmartCard was introduced last year, and quarantines 50% of people’s income, preventing users from spending money on tobacco, pornography, alcohol or gambling. Some users remain on the BasicsCard and its income management restrictions.
In its recommendations, the committee called to make income management voluntary and “immediately establish more pathways” for people to exit the program, or apply for an exemption.
The committee heard from advocates and community leaders in the areas where the card operates, as well as academics who have studied its impact.
“Overwhelmingly the committee was told that the premise of compulsory income management is discriminatory and is based on historical notions that Aboriginal and Torres Strait Islander people cannot manage their own lives and finances,” it found.
It also found it had negative impacts on women and children including those fleeing domestic violence; exacerbated family tensions and made it harder to meet children’s needs; added pressures to share limited cash funds; and increased the cost of purchasing items by restricting people from the cash economy.
The committee was chaired by the Labor MP Josh Burns, who backed the key recommendation to abolish the card.
In last year’s mid-year financial outlook, however, the government said it would continue compulsory and voluntary income management through to June 2026.
When asked if the government would roll back the card, the minister for social services, Amanda Rishworth, said the government was committed to making the scheme voluntary for those who want it.
“Consultation on the future of income management is currently under way,” Rishworth said.
“We aren’t rushing it because we want to engage respectfully with First Nations communities, many of which are in remote parts of the NT.
“Any decisions about the future of income management will be based on genuine consultation with First Nations peoples, affected communities and state and territory governments.”
Edwina MacDonald, the acting Acoss CEO, welcomed the committee’s recommendation to abolish compulsory income management.
“There is no conclusive evidence that compulsory income management has achieved its objectives. On the contrary, there is evidence to show the policy has caused harm,” MacDonald said.
“It discriminates against First Nations people and women and is in breach of Australia’s human rights obligations.
“We urge the federal government to abolish compulsory income management as soon as possible so that this paternalistic scheme is no longer in our social security system.”
The anti-cashless card advocate Kathryn Wilkes said it unfairly targeted Indigenous communities.
“The RBA bank demands that we have 4.5% unemployment in order to keep our inflation down,” she said. “They need to thank those people living in below poverty for keeping the inflation down in this country instead of kicking most of them.
“It needs to be completely voluntary. It needs to be easier for people to be able to get off of it, if they want to get off of it. There shouldn’t be any barriers to people wanting to get off of it.”
• This article was amended on 5 September 2024 to clarify the BasicsCard is still used by some people.
