In a submission to the Forrest Review of Indigenous jobs and training, the Australian Bankers’ Association (ABA) rejects Andrew Forrest’s Healthy Welfare Card proposal.
The card was one of the review’s key recommendations and is meant to be cheaper and easier to administer than the government’s existing income management system. But according to the ABA, the proposal would require significant changes to current technology and cost time, money and resources.
Forrest’s idea is to provide welfare recipients with a card that doesn’t allow cash withdrawals and blocks access to alcohol, gambling and illicit services. The review argues that the new system would be cheaper and easier to administer than the government’s current income management arrangements because it would rely on the mainstream banking system and existing payments technology. However in a submission to the review, the ABA stated:
The ABA does not support using the banking and payment system for the implementation of the Healthy Welfare Card or an extension of the income management policy as a mandatory approach for all recipients of social security payments and assistance. There are a number of technological and practical considerations associated with the Healthy Welfare Card, which undermines the implementation of a workable, efficient and effective scheme.
In the current payments system, blocking access to cash and gift cards is relatively straightforward. But as the ABA points out, the system cannot automatically block purchases of prohibited goods like alcohol at merchants that sell alcohol alongside other goods such as groceries. The best it can do is block access to entire categories of merchant (eg pubs taverns and bars, package stores – beer, wine and liquor).
According to the ABA’s submission:
… currently there is no technology that would enable a card to block transactions or payments at individual purchases or allow some purchases and not others from a particular MCC 1. This change would require a substantial overhaul of the existing EFTPOS system in use by all Australian retailers to identify goods individually and if necessary preclude their purchase prior to check-out. It would require new EFTPOS devices and new transaction instructions (electronic messages and codes) to be introduced, which would potentially disrupt the efficiency of the payments system and increase the cost of point of sale transactions for all users (p5).
In the United States, proposals for cashless welfare systems have run into similar problems. In Massachusetts the government established a commission to see if it was feasible to move welfare payments to a cashless system. After receiving advice from consultants (the Ripples Group) the commission recommended against moving to a fully cashless system.
- Merchant Category Code[↩]
So from this I presume (not having read the linked documents) :) that when the Forrest Review argued their proposed scheme would be cheaper they actually had no idea and just assumed it would be. Pretty much made it up. Probably lots of hand waving involved. There would have to be some pretty substantial savings elsewhere in the system to offset a complete, nationwide overhaul of payment processing systems.
Why do the likes of Palmer and his ilk believe those who have the bad luck to seek welfare are not capable of budgeting, therefore need to be punished. Yes, they have bills and loans to meet like all others in society. Most should be congratulated for surviving on what most would regard as lousy money. If they spend it on grog/tobacco, they do not eat. Their responsibility not politicians. We had a Opposition leader who could not survive on his salary, taking out a huge refinance loans on his own.,
What about their children?
what about the tens of thousands of people on income support that don’t have children in their care?
Of course the Bankers are right,it would require a big and expensive rework of the current system…but so did decimalisation of the Australian dollar and the introduction of the GST. The question should be is this a fair system and should it be extended equally across all forms of welfare? It is true Nanny state thinking so the irony is that it is being put forward by what is probably the most radical Right wing government that Australia has ever had.
Looks pretty simple to me. Just take the selling of things you want to stop access to off grocery chains. If they want to sell products banned from welfare funding, just make the selling of such products require a stand alone business, with separate receipting.
Obviously the banks don’t want to put effort into helping, & the grocery chains just want the sales. Probably time to stop grog being sold in supermarkets anyway. I’m sure it helps no one but the companies.
Yes whats stopping someone buy for example a fridge for $1,000 credit on their basics card and then selling it second hand for $700 cash and using the $700 cash to buy banned things like Alcohol, Even if it did go ahead it would never have worked , theres too many ways for people to get around it and get their hands on cash
Remember years ago when charities gave out vouchera to spend on groceries in such places as Coles. Yes, one could get the weeks grocery, say $80; Long time ago. Down to the back of pub, sell for $60. Enough for betting, drink or two for rest of the day. regular occurrence. Also packet cigs.
Well LJS, I think you’re being a little unfair.
I mean if a billion dollars doesn’t buy you the right to determine facts, what does?
Let me see if I get this…Andrew Forrest, a billionaire, goes to the trouble to publish his ‘Review’, hire spruikers, etc, etc….
..but the people he’s hired to actually draft the thing don’t even do any due diligence on the feasibility of the key recommendations?
Its ‘Amateur Hour’ out West, folks!