A subclass of millions of Australians will be created if the government goes ahead with a "demeaning" proposal to restrict how welfare recipients spend their benefits, community sector and indigenous organisations say.
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More than 35 groups, led by the Australian Council of Social Service, have signed a joint statement to the Abbott government, demanding that it does not roll out the "Healthy Welfare Card" recommended by businessman Andrew Forrest in his review of indigenous employment and training.
The groups, which include the St Vincent de Paul Society, Relationships Australia, Mission Australia, the National Congress of Australia's First Peoples and National Aboriginal and Torres Strait Islander Legal Services, say the card would be "demeaning, invasive, unworkable" and create "an entire subclass of millions of people in the Australian community".
In his review, released in August, Mr Forrest called on the government to issue a debit card to all welfare recipients to ensure they do not spend the funds on things like alcohol and gambling. He argued this would direct "spending to purchases that sustain and support a healthy lifestyle ... and to savings for larger expenses".
The card would be fully redeemable at any Australian shop that accepts Visa and MasterCard with electronic and EFTPOS payment facilities.
While the government has since said that it would only consider rolling out the measure to "vulnerable" and "at-risk" people, it has confirmed it is "actively" looking at the proposal and is in talks with banks about implementation.
In their statement, the community and indigenous groups argue that income management schemes have previously failed to create long term changes. They say welfare management had also created practical problems for people when they did not have cash and it will make life "more difficult" for people who are placed on the card.
"It would send a message that income support recipients cannot be trusted with cash."
The government has been consulting the community about the Forrest report and is to due to respond to it along with the McClure welfare review. The late-running final McClure report has not yet been delivered to Social Services Minister Kevin Andrews, who says it will be his "Christmas reading".
Mr Andrews told Fairfax Media the government will probably release the long-awaited report in early 2015, but has not settled on a fixed date.
More than 20,000 Australians have their incomes managed voluntarily or compulsorily by the federal government. Some welfare recipients have their incomes managed to deal with issues around child protection, financial hardship and drug and alcohol dependency. Other people have their incomes managed simply because they have been on a particular benefit - such as Youth Allowance - for three of the previous six months.
The current schemes, which were introduced by Coalition and Labor governments, quarantine at least half of a person's payment for necessary items and prevent spending on things such as alcohol, cigarettes, home brew kits and pornography. At this stage, the various schemes are due to end in mid 2015 and mid 2016 and the government is considering its next move in the area.
