The cashless wellness card is set to be terminated after a new report found the scheme failed to prove a reduction in social harm.
Social Services Minister Amanda Rishworth announced that the report, published by the Australian National Audit Office (ANAO), highlighted the “lack of evidence to demonstrate the effectiveness” of the card.
In a statement on Friday afternoon, Ms Rishworth said briefings had already started to discuss the termination of cashless welfare cards “confirming Labour’s electoral commitment”.
“The former coalition government spent over $170 million on the privatized cashless debit card – money that could have been spent on services that locals need,” Ms Rishworth said.
Auditor General Grant Hehir’s scathing report said the government had not ‘demonstrated that the cashless debit card program is achieving its objectives’.
The Department of Social Services has also failed to implement previous recommendations regarding evaluating the program and conducting a cost-benefit analysis.
Mr Hehir described the ministry’s oversight as “largely effective”, but criticized the former Morrison government’s lack of internal performance monitoring for the programme.
“The expansion and expansion of the cashless debit card program has not been informed by an effective second impact evaluation, cost-benefit analysis, or post-implementation review,” the report states.
The federal government launched a trial of the program in 2016, placing up to 80% of a welfare recipient’s payments on the card. They cannot withdraw money placed on the card to purchase alcohol, gambling or cash products.
The trial affected many of the largest indigenous populations in Ceduna, South Australia; the East Kimberley region of Western Australia; the Goldfields region in Western Australia; the Bundaberg, Hervey Bay and Cape York regions in Queensland; and the Northern Territory.
The card was launched by the previous coalition government as a solution to encourage socially responsible behavior by limiting the amount of money that can be spent on drugs and alcohol.
In response, the Department of Social Services accepted a recommendation to develop internal performance measures and targets to assess whether the program is effective.
But he rejected an external review of the second trial widening assessment because the department believed it would not give taxpayers value for money.
“An external review will not generate additional evidence or information and would only reiterate data availability and accessibility constraints,” the department’s response said.
The cost of the program in 2020-21 reached $36.5 million, with 16,685 people participating in February 2022.
A report by ANAO in 2018 found that the department’s monitoring and evaluation of the program was “inadequate”.
The Albanian government promised to scrap the card, but said it would first consult with communities where the program has been tested.