Newstart, Indue, and Raising the Rate

I’ve been meaning for a while to write about the way our government (and to a lesser, but not sufficiently lesser, extent, the media) has been increasingly pushing the idea that people who are poor have miserable lives because they deserve them.  Apparently, our unemployed people are too busy taking drugs, protesting climate change, eating avocado toast, and refusing to move to the country where jobs are supposedly plentiful, to actually job hunt properly and that’s why they remain in poverty.  (Incidentally, if you were considering moving to the country for work, please read this article first.  It turns out that this is bad advice, because moving house can get you cut off from Newstart unless you are very lucky.)

(Incidentally, note how disabled people are sort of… missing from this picture entirely.  Much like the $4.6 billion that wasn’t spent on NDIS funding, so that our budget could be balanced this year.)

On the other hand, the government is full of (fully funded) empathy for the hardship endured by small business owners forced to pay penalty rates, and is indeed wondering whether superannuation ought to be optional for lower-paid workers, too.  I’m sure this won’t place more pressure on the Aged Care pension in the long run.  And speaking of pensions, the government which can’t afford to raise the rate of Newstart can apparently afford to spend $6 billion a year on franking credits, a frankly unsustainable rebate only available to people who have sufficient savings to invest in shares (and the figures attached to this article suggest that the overwhelming majority of these people have savings of $1 million or more).

There are many, MANY, things to write about when it comes to this government’s attitude to poverty.  Hell, I haven’t even started on Robodebt – that’s a whole other post.  But right now, there is a Bill under consideration to expand the Cashless Debit Card trial to cover the entire Northern Territory, Cape York and parts of South Australia, with the goal of eventually expanding the card to all unemployed people, and possibly people on other forms of social security.  There’s a pretty good summary of the situation and how the Bill will work here, or you can read the amendments in their entirety here (honestly not that useful, I found), and an explanatory memorandum here.  The latter goes into some detail regarding concerns about the human rights of people on the card:

The Parliamentary Joint Committee on Human Rights conducted a review of the Social Services Legislation Amendment (Cashless Debit Card) Bill 2017, which notes that the Cashless Debit Card engages and limits three human rights: the right to social security, the right to a private life and the right to equality and non-discrimination.

But concludes that it’s all fine and definitely non-discriminatory, even though  the areas in which the expansion is taking place are all areas with high indigenous populations (according to this article, more than 80% of those affected will be indigenous Australians).  Fascinating.  Especially as, for all the talk of community consultation, no Australian government in my lifetime has been particularly stellar when it comes to listening to Aboriginal communities. No colonialism going on here, clearly.

I’m going to cut to the chase – the government is accepting submissions regarding the expansion of the Cashless Debit Card up until October 18, and you can make a submission here.  There are some guidelines on how to do so here

Since I’m sure that many of you know far, far more about this than I do, and some of you will have personal stories that are relevant to the submission, I didn’t want to make you read through all my ramblings.  But if you want some numbers and stats and arguments for your submission, as well as a few more other ways to take action on Newstart, keep on reading.  I suspect some of these will form the basis of my own submission.

Let’s start with some numbers.

I just want to circle back to that poverty line number again for a moment, because that was the most appalling fact I found when researching this article.  Remember, current Newstart rates are $278 per week.  The many, many organisations campaigning to raise the Newstart rate are asking for a raise of $75 per week.  But the poverty line for a single person is $429 per week, not counting housing costs.  The “unfunded empathy” ruled out by Scott Morrison would still leave unemployed people more than $75 below the poverty line.  I am honestly beyond speech on this.  How *dare* he.

What is the Cashless Debit Card?

Essentially, the idea is that people receiving Newstart and some other payments (they keep changing their mind about which) would have 80% of their regular income and 100% of lump sum benefits such as Family Tax Benefits quarantined onto a debit card that cannot be used to withdraw cash, or buy alcohol, gambling products, or gift cards.  The remaining 20% of income would be deposited into the usual bank account and could be withdrawn.  The DSS has more information about this here.

The idea is that the card will help people make better lifestyle choices, because obviously if you are on Newstart and can’t pay your bills it must be because you are doing drugs, am I right, Anne Ruston? Or maybe it’s because you are eschewing your employment obligations to party up at Climate Rallies, eh Michaelia Cash?  And you don’t want to do that, because Peter Dutton would like to put protesters in jail as a matter of course.  (Free speech is apparently only intended to be for the wealthy.)

It couldn’t possibly be because Newstart is currently more than $150 per week below the poverty line.  (Ooh, I am livid about that.)

The government report tells us that early trials have been successful, but 49% of participants said that the card actually made their lives worse (I haven’t been able to find the source of this statistic, but since it is acknowledged even by articles supporting the continuation and expansion of the card, I am inclined to take it as accurate).

Also, for a program which is billed at addressing family violence, the trials of the Cashless Debit Card have been wildly unsuccessful, with reports of family violence actually rising in some areas.  And at least two survivors of domestic violence have pointed out that escaping their abusive situations would have been impossible had they been on the Cashless Debit Card.

Practical issues

The DSS page helpfully tells us that the quarantined money can be used to shop, pay bills or buy clothes, and the remaining 20% can be for things like school excursions, tuck shops and garage sales.  And it seems that this new Cashless Debit Card is superior to the Basics Card in that it will work with EFTPOS machines at all businesses that have not been blocked, rather than only at businesses that have been specifically approved, which is a definite improvement.


It turns out that despite the Indue website’s cheery claim that ‘All merchants that have existing point-of-sale terminal facilities and do not sell alcohol, gambling goods/services, or gift cards will automatically be able to accept the Cashless Debit Card as a payment method‘, and that even some places that do sell these items can apply to be on the list, the list of blocked venues is actually pretty long, and includes a number of supermarkets, service stations, whitegoods shops, hardware shops, caravan parks, and more. 

The Cashless Debit Card has largely been rolled out in regional areas, which leads to another problem: many businesses in remote and regional areas are relatively small businesses with tight margins, and they do not all have EFTPOS machines.  This further restricts the businesses that people on the card are able to use (and it has a negative impact on these businesses, too, as they lose customers and money).

Moreover, there are a lot of other essentials for which people still can’t use the card:

  • Rent.  Yes, if you are renting directly from the landlord, you can pay using your quarantined money.  But many people on Newstart sublet or share housing without being named on the lease (since landlords often don’t like renting to unemployed people), and pay their share of the rent to a lead tenant.  This will no longer be possible.
  • Bills.  Again, if you are in a share house with shared utility bills, you are going to need cash to pay the flatmate whose name is on the bill your share of the utilities.
  • Markets. Food, especially fruit and veg are often cheaper at markets or greengrocers (especially if you go after lunch on a Saturday when they are trying to get rid of their stock), and not all of these take EFTPOS. Also, there is often a minimum spend for EFTPOS, which you might not be able to reach at one small shop at a market.
  • Second hand items such as clothing, textbooks, appliances, etc.
  • Tradies who only take cash.  Or, more commonly, who will give you a cash discount.  It is surely perverse to bar our poorest Australians from access to discounted services.
  • School excursions and lunches.  While this is one of the things that the cash portion of the social security payment is supposed to cover, a common complaint is that excursions have now become things that parents can’t afford to send their children on.
  • Anything at all, if the internet goes down and the EFTPOS machines don’t work. And yes, this has happened, in a remote community, where it took three days to restore power. How good’s the NBN?

Putting 80% of people’s social security on a Cashless Debit Card actually makes it harder for people to manage their budgets, by barring them from doing many of the things that help them to live more cheaply.  This is not helpful.  There have also been reports that the card doesn’t function reliably and that it can be hard to access balances through the Centrelink site.

And that’s not even beginning to address the social implications of being on a Cashless Debit Card, such as the humiliation of not being able to shop where you need to (and sometimes finding this out at point of service), of being abused by tellers recognising your card, or of needing to go to a different teller to everyone else if you shop at an approved ‘mixed merchant’.

Also, please remember, most of the people on the current and proposed Cashless Debit Card trial will be indigenous Australians.  I don’t claim to be very knowledgeable about racism, but even I can see the really dodgy implications of making indigenous people have to go to a different counter to everyone else at the supermarket.  I’m sure they are separate but equal, though.

Seriously, my jaw dropped when I read that one. It’s not that I expect our government not to be racist, but I would have thought that the optics of this would at least have crossed someone’s mind, somewhere…

Why we should raise the rate of Newstart instead

I think the numbers above sort of speak for themselves.  Nobody should be living below the poverty line in a wealthy country like Australia.  But here are a few more things to consider.

  • The Cashless Debit Card apparently costs $10,000 per person per year to administer, though it’s not clear whether this cost will go down somewhat if and when the card becomes more fully established.  I have Googled this assiduously and the lowest cost I’ve seen quoted was $4,000 per person per year, or $77 per week… which begs the question of how we can afford this when we can’t afford to raise Newstart by $75 per week? (Google claims that this is because Indue is owned by major Liberal and National party donors, but I’ve not actually found any reliable information to back that up, so we can shelve that particular conspiracy theory for now.)
  • Giving people on low incomes more money is good for the economy.  And look, it’s not just bleeding-heart lefties like me who think so, it’s also the Reserve Bank of Australia and Deloittes. Why?  Because people who are living below the poverty line – or even just above it – are not buying the things that they need.  Give them enough money to live on, and they will spend it – not on drugs, but on food for breakfast, on new shoes, on car repairs, on paying down debt, on getting a new kettle that works – on all sorts of things.  And people buying things means more money for people selling things.  It’s good for the economy.  Conversely, cutting taxes for the wealthy doesn’t tend to have much of an impact on their spending, because they buy the things they need when they need them, and tend to squirrel away any extra savings rather than spending them, effectively taking this money out of circulation.
  • It benefits everyone.  People on welfare benefit, because they can give more of their attention to job hunting, or managing their health, or looking after their children, or studying, or living their lives, rather than spending time and mental energy trying balance a budget that can’t balance.  Small businesses benefit, because more people are able to spend money on goods and services.  The economy benefits, because there is more money circulating, and with more transactions taking place, more GST is captured.  There is a reasonable chance that employment levels will also rise, because with more people spending money, more businesses become healthy enough to expand.
  • It might make us less of an international embarrassment.  Seriously, between the UN’s Special Rapporteur on Extreme Poverty telling us off for our punitive attitude towards people in need and the National Council for Single Mothers and their Children bringing a complaint against the government to the UN for their treatment of single parents under ParentsNext, which apparently breaches Australia’s Human Rights obligations, things are getting a little icky over here.

Poverty, Welfare and Empathy

Last week, Scott Morrison made a point of saying that aid for farmers was ‘not welfare‘. This is, perhaps, the most explicit statement we have had of the government’s narrative that there are deserving poor (retirees, farmers, some disabled people and carers) and undeserving poor (students, single mums, millennials, unemployed people generally), but the idea itself has been pretty pervasive.

People on Newstart are stereotyped as young, lazy, without obligations, perepetual students, drug takers, protesters, and generally troublemakers who think that they are too good to work.  (Above all, they are stereotyped as young.  Why are young people inherently less virtuous than older people?  Presumably because you can say that they haven’t yet paid into the system and therefore don’t deserve anything out of it… and never mind that if we can help them get on their feet now, they will be the ones whose taxes support the rest of us when we are old.)

(And, as it happens, many unemployed people are in their fifties or sixties, worked most of their lives, lost a job, and couldn’t find a new one.  But that shouldn’t matter.)

This is, frankly, an awful way to frame poverty and social security.  It deliberately divides and alienates our community, and blames unfortunate people for misfortunes which in many cases they have no control over (and even if they did, are we really saying that they deserve to starve in the streets for their bad judgment?).

Above all, it allows us to think that it could never happen to us.

But it could.  Most Australian households are only a few pay cheques away from poverty.  40% of households live from pay to pay, with no money left at the end of the month.  25% of Australians have less than $1,000 in savings and 49% have less than $10,000.

One lost job, one accident, or pregnancy, or illness, and suddenly, our lives become precarious.  And then add in the fridge that stops working, the landlord who decides to move in and gives you four weeks’ notice to find a new place (moving house is *expensive*), the roof that leaks when you are out and destroys your computer and your wardrobe, the chemotherapy and diagnostic tests and treatments that are only partially covered by medicare, and suddenly, you’re in trouble.

While it’s certainly more comfortable to think that we are safe from all of this, that our jobs are secure and our savings sufficient, for most of us, that isn’t true.  Poverty isn’t about virtue, it’s about luck.

Social security is a reflection of that understanding.  Social security exists because we decided, not all that long ago, that when people have a run of bad luck, we shouldn’t just leave them to die.  We should have a safety net in place to help them get back on their feet.  And this is better for everyone.  Even if you are one of the lucky ones who is financially secure, we are all safer living in a society where nobody is being driven to desperation.

But this is a narrative our government is actively trying to undermine.  They are trying to create a them and us scenario, one where we resent having our taxes go to help those who are less fortunate, and instead look to the very wealthy as something to aspire to – after all, they have worked so hard to become rich, they obviously deserve their franking credits, and one day, we will be rich and deserve franking credits too.

The government wants us to believe that the unemployed are not like us.  That they deserve to be punished, not helped. The Cashless Debit Card is a reflection of this.  Robodebt is a reflection of this.  The hours-long waiting times to speak to Centrelink are a reflection of this.  They are designed to frighten and humiliate, and to alienate people.  They are designed to make people give up.

But, when it comes down to it, you can’t actually punish people into making jobs exist. You can’t punish people into being healthy and well. You can’t punish people into being lucky.

When Scott Morrison says that he will not engage in “unfunded empathy”, he is trying to position empathy as something that is unreasonable, expensive, a luxury.  A weakness of the bleeding-hearts on the left, not to be indulged by a stern, paternalistic government.

But in fact, empathy is essential to a functional society.  It gives us the capacity to really see the people around us; to imagine what it might like to be in their situation; to care about their wellbeing.

Empathy makes us stronger – it builds bonds between people, it gives us the courage to stand up for each other and to help each other.  It exercises our imagination, so that we can find solutions to the problems that beset us.  It is foundational.

We are all better off when the most vulnerable people in our society have what they need to survive and thrive.  This is, I think, the ultimate form of freedom – to know that no matter what happens, no matter how hard you fall, that the safety net will actually catch you, and not let you go crashing to the ground.  And knowing that, you can dare to take risks – dare to start that business or go back to university or have that baby or move to that country town or take that apprenticeship.  You can afford to be inventive, creative, even, dare I say it, entrepreneurial, because failure is not disastrous.

Morrison may not have funding for empathy, but I don’t think we can afford to do without it.


Things you can do

That got long, didn’t it?  And it wasn’t much fun to write, and is certainly even less fun to live.  So.  Here are a handful of things that you might want to consider doing.

Cashless Debit Card Expansion

Raise the Rate of Newstart, Youth Allowance, and related payments

  • Raise the Rate is an initiative started by the Australian Council of Social Services (ACOSS), and is very big on empowering people on Newstart and similar allowances by encouraging them to tell their stories, both on the website and directly to MPs.  This sounds daunting, but there is a lot of support – have a look and consider whether this is for you.  (It’s fine if it isn’t!)
  • You can also follow ACOSS on Facebook.
  • The Unemployed Workers Union has a petition to raise Newstart to the poverty line.
  • Share the Pie is also looking for stories from people on Newstart, and has a bunch of news and resources pages.
  • Talk to your MPACOSS and St Vinnies have some useful talking points.


I haven’t touched on this here, but it’s a related issue, and I’m feeling a bit bad because so many of the actions above are ‘hey, people on Newstart, please do some more work in order to show people why you deserve better’, which is unfortunately the way the world tends to work, but still sucks. So here are some resources for people who have received a Robodebt letter.

  • Not My Debt has a list of tools and templates for what to do if you get hit by a Robodebt.
  • Victorian Legal Aid also has a page specifically for Robodebt recipients.
  • GetUp has a page called FraudStop to help you compile a request for review and send it to Centrelink, request assistance from your MP, and submit an FOI request for your Centrelink file.
  • The Unemployed Workers Union has a whole page full of online resources, and also encourages you to keep a record and Join the Fight (they are very uniony!).
  • Gordon Legal has launched a Class Action against the government on behalf of Robodebt recipients, and invites people to register their interest in being included on the case.

Some handy charities

To support, or to turn to if needed.

  • The Smith Family – this is a national independent children’s charity that focuses on making sure kids living in poverty have access to a good education.
  • Share the Dignity – provides period supplies for homeless women and victims of domestic violence.
  • Foodbank Australia – does what it says on the box.
  • RuralAid – provides material aid and mental health support to struggling Australians in regional Australia.
  • Ask Izzy – not a charity, but a database of where you can find material aid (food, blankets, shelter), help with pets, legal help, somewhere to charge your phone, help escaping domestic violence, and a really broad range of things that someone might need urgent and free help with.  I only just found it, entirely by accident, and it’s pretty amazing.  I also like that it has a ‘Quick Exit’ button that takes you to an innocuous page, so that if you are in danger, or just embarrassed, you can get them off your screen super fast.

6 thoughts on “Newstart, Indue, and Raising the Rate

  1. I agree with your expose on the CDC rollout. This card is owned by Indue P/L. This company was I understand, started by Doug Anthony, former Nat. MP and his son, also a former Nat. MP.
    This company receives up tp $10,000 + per card for administrative costs but Is also understand there is a UserPays surcharge every time the card is used to pay for purcheses.

    • Thanks for that. I couldn’t find a reliable source for the link between Indue and the Coalition, presumably because I didn’t quite know what I was looking for. Now that I’ve got a name, I have indeed found an article on the subject for anyone else who wants to check this out.
      Regarding the cost, my understanding was that the $10,000 per year, while currently true, might well reduce once the trial period was over and numbers of people on the card increased. (I try to keep my claims as modest and well-supported as possible to make them harder to argue with, hence the range I provided above). I haven’t been able to find anything about a global surcharge, but of course, some businesses certainly do charge a fee for using Eftpos rather than cash, further disadvantaging people who are already on a low income.

  2. I very strongly disagree with the prohibition already poor people on buying gift cards – one of the methods we use to make ends meet is using the 5% discount available to various members (Australian Breastfeeding Association for us, but there’s others) to buy gift cards which we then use to buy food, essentially reducing our food bills by 5%. When you’re trying to stretch every dollar as far as it can go, all methods should be open to you, especially being able to pay cash, coupons, discounts and shop secondhand! My whole family is clothed in secondhand items, including hubby’s hi-vis work gear.
    I live in an area that was involved in the cashless card trials. It is very stark how all the politicians here chorus that it’s a huge success, and all the frontline workers who help impoverished people (doctors, psychs, police, teachers, etc) say it’s putting unmanageable pressure on people who are just trying to do their best in already difficult situations.
    I loathe Centrelink. It’s been 15 years since I was on Newstart, but I still get anxious and teary any time I have to contact them, or go into the office (which hereabouts houses Medicare as well). I think there should be an automatic additional payment to cover professional councelling and antidepressants that you’re going to need once you develop Centrelink-induced trauma!

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