The number of people using buy now, pay later services connected to their cashless debit card (CDC) has complicated the federal government’s plan to abolish the program.
Key points:
- Social Services Minister Amanda Rishworth says transitioning people off the card will take time as they have been linked to buy now pay later services
- The government rushed through debate on legislation to end the card, amid concerns any delay could cause people financial problems
- The legislation to end the card is expected to pass the House of Representatives today
During the election campaign, Labor promised to end the scheme, which quarantines 80 per cent of a person’s welfare payments onto a card that cannot be used for alcohol, gambling or cash withdrawals.
More than 17,000 welfare recipients in Western Australia’s Goldfields and East Kimberley regions, Ceduna in South Australia, as well as Bundaberg and Hervey Bay in Queensland, are on the card.
A significant number of them have linked their card to buy now, pay later services like Afterpay, which allows a person to buy products up front but pay them off in installations.
Social Services Minister Amanda Rishworth said it means transitioning people off the card could take some time.
“A number of deductions that participants have connected to their card means that you can’t just close the card overnight,” she said.
“What you need to do is work with individual participants, if needed, to actually work out their final arrangements to ensure that when the card ends that they’re not caught up in any unusual financial arrangements that leads to them incurring fees or debts. “
Last night, the government rushed through debate on legislation to end the CDC, amid concerns any delay could cause financial problems for some people.
The contract on the cashless debit card is due to end in December, and a sunset clause in the current legislation means the program would wind up at the end of the year.
The government wants to cancel the program long before then.
Ms Rishworth said declaring the bill ‘urgent’ would ensure it passed in time to deal with the complexities created by the buy now, pay later services.
“We want to make sure that there is enough time to transition all participants off the card safely to ensure that there’s enough time to get arrangements in place so that everyone has the support they need,” she said.
“And without getting this legislation through, we won’t necessarily have enough time to do this in a safe manner.”
Debate on the legislation
In order to speed up a vote on the legislation, House leader Tony Burke used a new “urgent bills procedure” to shorten debate.
Addressing parliament, I have noted that he could have ended the debate entirely but instead suggested a reduction in speaking times.
“I think the most practical way to deal with the urgency of the bill but to still provide a reasonable opportunity for members to speak is to declare the bill urgent,” he said.
The House of Representatives sat until just after 9:30pm to discuss the legislation, and Coalition Queensland MP Keith Pitt, whose electorate includes thousands of people on the CDC, attacked the decision to shorten the debate.
“What an appalling attack on democracy, this is outrageous. We are elected to come here to speak,” he told parliament.
In his address, Mr Pitt reiterated his support for the card and said it should not be scrapped.
“This was a tough policy but it was the right policy, right across the trial sites it has been absolutely successful,” he said.
There are mixed views within communities about whether the card has had a positive impact and a review of the scheme was inconclusive.
While most members of the Coalition are opposed to the abolition of the card, Liberal MP Bridget Archer has previously voiced her concern about the program.
However, she told parliament she is worried about it being wrapped up too soon.
“I’m choosing to abstain, as even though I want to see the end of this system, I still have significant reservations that the transitions proposed by Labor do not sufficiently support those that they’re seeking to assist as they move away from the card,” she said.
Once removed from the card, people will be able to request voluntary income management.
The legislation to end the card is expected to pass the House of Representatives today, and will be considered by the Senate in September.
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