ABC Darwin interview With Adam Steer
E&OE.
ADAM STEER:
Good morning to you Minister.
ALAN TUDGE:
Good morning Adam.
ADAM STEER:
The Basics Card in the Northern Territory quarantines around 50 per cent of a person’s payment. Why is your new system upping that to 80 per cent?
ALAN TUDGE:
This card is quite different to the Basics Card. If I could explain two or three differences; firstly, what we are trying to do with this new cashless welfare card is essentially deal with just one central problem and that is welfare fuelled alcohol abuse, which as you know is so prevalent in many communities.
This card will be like an ordinary Visa debit card. It will work anywhere to purchase anything, but you simply won’t be able to use it to purchase alcohol, won’t be able to use it to gamble with and you won’t be able to get cash from it.
Consequently, we hope that in doing that, it will still give great freedom for people to spend their money on what they like, but they won’t be able to spend all their welfare payments on alcohol or drugs or gambling.
ADAM STEER:
The Basics Card that operates in the Northern Territory already inhibits people from buying alcohol, it inhibits them from buying cigarettes. Why don’t you just roll that system, which already exists, out into further regional towns and communities?
ALAN TUDGE:
I would never have designed the Basics Card as it is. I think the central flaw to it is that it’s not connected to the mainstream payments platform. Now what that means is for a retailer to accept that card, it has to sign up to it.
Whereas this cashless Visa debit card that we are talking about will work everywhere there is an EFTPOS system in existence, which is pretty much every store in Australia these days.
It will work automatically everywhere and it will just be excluding the liquor stores and the gambling houses and being able to take cash from it. That is the most important thing.
Secondly, the other key difference is that this card is not income management. Under the Basics Card in the Northern Territory, you have to set up individual accounts to set aside money for this, money for that, money for other things.
This does not require any of that, although we obviously encourage people to budget, but gives complete discretion over how you spend your welfare payments. Except for things being spend at the bottle shop, at the gambling houses or obviously on illicit substances.
ADAM STEER:
So can you buy tobacco under your scheme?
ALAN TUDGE:
You will still be able to buy tobacco from it. That has been a debate which we have had. Our main objective is to address the social harm which is caused by welfare abuse, if you like, then we are limiting it to alcohol drugs and gambling because they are the three main things that cause so much harm – not just to the individual, but to the broader community.
Whereas, smoking, well of course we don’t want people to spend their welfare dollars on cigarettes, but when you smoke a packet of cigarettes a day, ultimately you will kill yourself. You shouldn’t be doing that. But you don’t seem to become violent as a result of that and harm other people as a consequence.
ADAM STEER:
One of the reasons the Coalition used when they introduced the Basics Card in the first place was to look after children. To make sure that children were being fed, because the allegations were the adults were spending the money on grog and gambling and tobacco.
Why isn’t that rationale still being used with your new card?
ALAN TUDGE:
In some respects, the rationale is still there, the main reasons for child neglect, as the Northern Territory Child Commissioner has said, is alcohol abuse. The Basics Card, as you pointed out, quarantines 50 per cent of the welfare payment.
In some instances, if you have got a couple of kids for example, the amount of welfare payment you receive is such that even if it is quarantined you would still be able to buy a slab of beer a day with the remaining 50 per cent.
Hence, we wanted to have a higher proportion on the restricted card, but at the same time giving a bit more freedom of where you actually spend that 80 per cent on whatever you like – other than those restricted products.
ADAM STEER:
So does that mean that the Basics Card program is failing?
ALAN TUDGE:
The Basics Card has had an impact. Undoubtedly, the evaluations show that that is the case. Certainly, it is the case that more food is on the table. The qualitative evidence is that less grog has been consumed.
But it perhaps has not worked as effectively in dealing with the alcohol abuse as what we would have liked. I think in part because there still is so much cash around in the community.
This is trialling a slightly different approach of a higher level which is quarantined, a card which is a Visa debit card which is connected to your mainstream payments platform, but without the income management as such, so that you have complete freedom, otherwise, over how you spend your welfare payments.
ADAM STEER:
As you said, the basics card, retailers have to sign in so that they can accept the basics card. That must be quite costly for the Government to have to run. The administration costs must be…
ALAN TUDGE:
That is absolutely right. And on the other side of the basics card, it is an expensive card. The whole income management system is expensive, signing retailers up is expensive, the associated compliance of retailers is expensive. This new card will be a much cheaper card.
ADAM STEER:
So if the basics card is proving too costly to run and too cumbersome to run, why not cancel it all together and just introduce your new system into the Northern Territory as well?
ALAN TUDGE:
We are taking this one step at a time Adam. This new card that we have is a new approach and we want to trial it in a couple of locations first.
Should those trials be proven to be successful in addressing some of that long term fuelled alcohol, drug and gambling abuse; then we will obviously be open to rolling it out elsewhere.
In Western Australia, for example, there are a number of community leaders who have approached me and said “we would like to explore introducing this card into our community” to try to address some of these issues.
It would seem like a logical next step to start to roll it out to those communities that request it. Clearly we would have a look at the basics card as well, in terms of whether or not one card is better than the other for the Northern Territory.
ADAM STEER:
The two trial sites, Ceduna in South Australia and Kununurra in WA, most of the people affected will be indigenous, won’t they?
ALAN TUDGE:
In the two trial sites, that is the case. We have been working very closely with the community leaders in each of those two trial sites. In fact, not just working closely with them, they have co-designed the design of the card and the associated services that will be introduced with the card.
It is very much a joint project in each of those two trial sites. It is not exclusively indigenous. It is basically everybody who is on income support payments in those areas would capture indigenous or non-indigenous.
I am also looking at a third trial site and one of the ones under consideration is a larger regional town and in that instance, 70 per cent of the people would be non-indigenous.
ADAM STEER:
A text, Minister, says: ‘Go Woolies, get two packets of smokes. Go pub, sell two packets of smokes for $40 cash. Get slab of beer. Cheers, Aaron.’
That could happen couldn’t it? You could buy a packet of cigarettes and just sell them at the pub.
ALAN TUDGE:
Inevitably, some people will try to get around the system. We will have some measures in place to try to prevent that, but I think the outcome will be is similar to when alcohol restrictions are introduced into communities. That is, you get a very significant reduction in the amount of harm overnight- typically, half the amount of violence, even though you will get some grog runners trying to introduce grog at the same time.
We are not going to stop every single problem, but I still think it will have an absolutely demonstrable impact in terms of reducing the social harm which is caused by alcohol, drug and gambling abuse.
ADAM STEER:
The liquor industry is a pretty powerful lobby group, particularly in the Northern Territory. They donate quite a bit of cash to both political parties. Is that one of the reasons, Minister, why you’re resistant to introducing this scheme into the Northern Territory, because it would reduce the profits of the hoteliers?
ALAN TUDGE:
No, that is not a consideration. We are trialling in a couple of locations where community leaders have wanted us to trial it. We are doing that in one location in East Kimberley, one location in Ceduna, in South Australia and both trials we hope will be successful.
If they are proven to be successful, then obviously we will be making decisions about where we roll it out further.
ADAM STEER:
There is a stigma attached to some areas of the Northern Territory – the green basics card. It has a bit of a stigma attached to it. Will the new card be easily identifiable as a welfare card?
ALAN TUDGE:
It won’t be. In fact it has already been designed. It is literally a silver Visa card. If I held that up, you wouldn’t be able to distinguish that card from any other Visa card. that is has been specifically designed for that purpose.
We have understood and learnt from the lessons of the basics card and tried to address them and one of those has been the stigma associated with the basics card is some of the feedback we have received.
This card will look like an ordinary Visa card. It will work at absolutely every shop in the country. But it won’t work at any bottle shop in the country and it won’t work at any gambling house in the country.
Through that, we just hope it will significantly reduce the amount of alcohol that is consumed in some of these communities. In a place like Ceduna where we are trialling it, the hospitalisation rates from assaults is 68 times the national average- 68 times the national average.
Nearly all of that is due to alcohol consumption paid for by the welfare dollar. We think we have a mechanism here which can still give people as much freedom as they like over their welfare dollar to spend on it as they deem fit. But they simply can’t spend all of their welfare dollars on alcohol or on gambling or on illicit substances.
ADAM STEER:
Minister, thanks so much for your time today.
ALAN TUDGE:
Thanks so much Adam.