FEDERAL senators examining the cashless welfare card (CDC) used to restrict spending in remote Indigenous communities, have heard the card can be used to pay for sex services.
The card, currently being trialled, puts part of a Newstart recipient’s payments onto a debit card that can’t be used to buy alcohol, gamble or withdraw cash.
After being questioned by Labor Senator Malarndirri McCarthy, the Department of Social Services confirmed that the card can be used in brothels.
The questioning came during a Senate estimates hearing into plans to extend the cashless debit card to the Northern Territory from April next year.
The aim of the CDC trial is to see whether reducing the amount of cash available for welfare recipients will reduce welfare-fuelled alcohol, gambling and drug misuse.
However the Senate inquiry has also heard that people on the CDC can use a loophole in the system so they can gamble and buy alcohol, drugs, cigarettes and pornography.
The loophole allows them to use credit cards without detection while they are on income management.
Government officials have admitted it is unable to track the use of credit cards, and people who have credit cards can still use them to buy restricted items and use their CDC income to pay off the debts.
“People on this card can transfer money to other people on the card so it just has too many faults and flaws,” Senator McCarthy told 3AW radio.
The claim adds to the tale of woes about the Basics card – an equally controversial version of the cashless welfare card – in use on many Indigenous communities in the Northern Territory.
A remote-area nurse working in Top End communities told The Catholic Leader she was regularly treating Indigenous patients who had been badly beaten because they would not hand over their cards to other community members so funds could be transferred.
In the Northern Territory, CDC is designed to replace the Basics card that has been in place for 12 years, after then-Prime Minister John Howard declared an intervention, saying it was necessary to restrict items such as alcohol and pornography to protect children in communities who were allegedly vulnerable to sexual exploitation.
Aboriginal people are not allowed to use their Basics card at places that sell alcohol, cigarettes and pornography.
If the Federal Government initiative to extend the CDC system goes ahead, 21,000 people living on Northern Territory communities would automatically be transferred from using the Basics card to CDC.
Senator McCarthy says the capacity of cardholders to buy illicit material on the cashless debit card undermines a significant reason which prompted the Northern Territory intervention.
“I asked the (Senate) inquiry, ‘Don’t you think it’s peculiar that you are now enabling the purchase of pornography through the cashless debit card, when that was one of the reasons why, under John Howard, that the Federal Government intervened into the Northern Territory?’” Senator McCarthy told ABC Radio.
“Moving people from Basics to cashless credit card, I just ask the question ‘why’. Why focus on a card when we should be focusing on jobs?”