Queensland welfare recipients forced to use a card that restricts how they spend their money are happy and singing its praises, the federal government says.
Social Services Minister Anne Ruston has travelled to Bundaberg and Hervey Bay, where the cashless welfare card is being trialled.
The card ensures 80 per cent of Newstart payments can't be spent on alcohol or gambling, or for cash withdrawals.
Senator Ruston says she's very encouraged by data suggesting the card could be driving down welfare dependency and youth unemployment in the two communities.
And she says under 35s forced to go on the card are fans, and Labor is wrong to claim it's a punitive system.
"They are actually very positive about the results and the benefits it's been providing to them and their families," she told 4BC on Thursday.
"And as people are getting used to it and realise the benefits, they're actually out there, the ones singing its praises."
The minister has pointed to data showing an almost nine per cent drop in people on welfare in Bundaberg and a 10 per cent fall in Hervey Bay since the trial began in January.
Youth unemployment in the Wide Bay region, which takes in the two communities, is also down, 19.8 per cent to 18.5 per cent, according to ABS figures.
Senator Ruston said there was evidence to suggest Newstart recipients were getting jobs but she was waiting on more data that would indicate what role the card may have played in that.
Labor has been fighting any national rollout of the card, which is also being trialled at Ceduna in South Australia, and the East Kimberley and Goldfields region in Western Australia.
It says the card should not be imposed on communities that don't want it.
The Greens have also railed against the system, accusing the government of cherry picking data, and citing unemployment data from a region much broader than the trial site.
"It's like saying that unemployment has dropped in Canberra using the figures for the whole of NSW, it's ridiculous," Greens community services spokeswoman Senator Rachel Siewert said.
"Unemployment figures in the Wide Bay area dropped quite a bit before the trial started and have changed slightly since the card's introduction and are clearly subject to seasonal variation."
Australian Associated Press
Sign up for our newsletter to stay up to date.