A campaign pledge to phase out the widely maligned cashless debit card is set to make its way into the House of Representatives today as a legislative amendment, with the Albanian government insisting it will incorporate income management rather than trying to impose it on unruly banks.
The effective abandonment of the politically engineered and functionally flawed financial services product puts an end to a decade of attempts to forcibly retrofit controls on payment instruments under the guise of protecting vulnerable communities by removing cash.
Officially, “income management” has held up in many areas where it has been used, with mixed results.
The policies of increasingly tight financial controls are having a polarizing impact on communities, which are often forced to choose between the nasty options of a paternalistic whitelist of approved goods and services deemed safe, or exploitative industries that thrive on dependency and addiction that historically thrive target marginalized and vulnerable communities.
In a sign of how seriously Labor views CDC as a dissenting solution, four ministers – Social Services Secretary Amanda Rishworth, Indigenous Australians Secretary Linda Burney, Government Services Secretary Bill Shorten and Deputy Social Services Secretary Justine Elliot – formed an orderly Line up to ring the scheme’s legislative death knell.
“Following extensive consultations at sites across the country, the government today announced a series of measures that will empower local communities and help end the cashless debit card program and ensure communities are better off,” the joint statement read Minister.
“The Government will end the cashless debit card scheme and make income administration voluntary in Ceduna, East Kimberley, Goldfields and Bundaberg-Hervey Bay.”
The Basics card, which runs on the EFTPOS network and has no consumer-facing internet payment functionality, is retained, with the government saying it will turn to its own technology stack for income and payments, which has its own significant issues. administrative functions.
That venture will come in the form of an “updated income management technology solution with an enhanced card linked to Services Australia,” the government says, although it’s unclear which card or payment platform will use the solution.
The government has traditionally used the Reserve Bank of Australia to funnel welfare payments into people’s bank accounts, with transactions now being processed through the New Payments Platform (NPP) following the huge transformation of welfare payments infrastructure.
Although around $2 billion was spent creating the new infrastructure platforms, there are few features for consumer payments as the systems are essentially back-end overhauls and not front-end systems, hence card schemes in the revenue were drawn management arena.
After the Reserve Bank gave up its stake in the NPP following last year’s controversial forced merger of BPAY, EFTPOS and the NPP, banks now have no real reason to allow the government access to or modify their infrastructure, unless , there are regulatory interventions.
Remarkably, it is a back-to-the-future approach to the solutions Labor is betting on to keep some form of income management going.
“The updated technology for people moving to income management will allow access to more merchants and facilitate BPAY and online shopping. Protection measures such as PIN technology and consumer-controlled product blocking are also being explored.”
Many of these features are already present on card payment rails, but have been shut down to restrict the transaction capability for CDC holders, so the card can only really be used at large merchants, such as large supermarkets, who were pushed into supporting the product by the previous government .
How BPAY will fit into the new equation is also unclear, given its deeply uncertain future following the forced merger of payment systems.
In this regard, the government insists it is now in charge, citing its own delivery capabilities rather than industry or banks.
“Crucially, as part of the changes, all income management will be provided by Services Australia. Individuals no longer need to deal with a private company for customer support functions,” the minister’s statement said.
“The measures will restore Services Australia’s role in income administration and provide greater choice.”
It remains to be seen what these decisions will consist of.