Cashless Debit Card having no impact on problem gambling, substance abuse, or poor nutrition: study

A new study by the University of South Australia and Monash University has found the Australian Cashless Debit Card (CDC) scheme, which restricts the spending of welfare recipients, is having nominal impact on the problem behaviours it was designed to target.

The CDC is a trial form of conditional welfare that prevents recipients from withdrawing cash from their welfare account or using their welfare payments to access gambling services and purchase alcohol.

The CDC has been trialled in four locations across Australian, with officially stated aims of promoting healthier eating habits, curbing problem gambling, and reducing alcohol abuse and illegal drug use.

The new study into the CDC, led by UniSA Business academics, Dr Luke Greenacre and Dr Skye Akbar, examined the change in targeted behaviours following the introduction of the scheme in a South Australian trial area, finding no statistically significant improvement in any behaviour.

“We used routine government data and store sales data to quantitively assess the targeted reductions over an extended period,” Dr Greenacre says.

“We found no substantive impact on measures of gambling, drug and alcohol abuse, crime or emergency department presentations.

“There was a small increase in the amount spent on healthy foods, but healthy foods actually decreased as a proportion of all foods purchased, suggesting CDC users were buying more food in total, but the larger increase among that was unhealthy food.”

The recent Federal Budget allocated funds to extend, and possibly expand, current CDC trials, and the lower house is expected to vote on a related bill before Christmas, with a report from the Senate Community Affairs Legislation Committee due on 17 November.

Despite these official plans, however, the new study from UniSA and Monash is the first independent, quantitative assessment of whether the scheme is meeting its stated objectives.

“We’re not being critical of attempts to address these social issues, because they are worthy of attention,” Dr Greenacre says. “But if there are plans to expand this scheme, we should be sure it’s meeting its objectives, and the data indicates it just isn’t doing that.”

While concerns have been raised in some quarters about unintended consequences of the CDC – such as the mental wellbeing impact of stigmatising welfare recipients – outside such suggestions, this new research raises doubts about direct outcomes of the scheme and the related costs.

“The cost of administering the scheme has been reported at around $10,000 per person, per year, which is additional to the cost of the individuals’ actual welfare payments,” explains Dr Akbar.

“That is a huge ongoing expense that could conceivably be used in a range of different ways, whether that’s providing community counsellors, addiction treatment services, employment training or any of a range of measures that address the fundamental social problems, not just the obvious symptoms.

“If the current system is both ineffective at curbing anti-social behaviour and expensive, from a purely economic perspective, it makes sense to consider alternative approaches.”

Given the impact the COVID-19 pandemic has had on Australia’s economy, and the very real prospect that 2021 will see an increase in the number of people on welfare, including in CDC trial areas, it is also possible the costs of the scheme could increase substantially in the near future.

“With the number of welfare recipients going up, we will see more people enrolled into the costly CDC program, again, without apparently delivering any substantial benefit for that cost,” Dr Greenacre says.

“So, it really appears that, whether you question the scheme from a left-leaning perspective about its broader social impact, or from a right-leaning perspective about its value as government expenditure, the CDC in its current form just doesn’t add up.”

Notes to editors:

/UniSA Release. The material in this public release comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.