Labor has introduced the new Indue SmartCard, despite an election promise to end compulsory income management for welfare recipients. 

The new, supposedly voluntary card scheme allows the social security minister to extend income management restrictions to new categories.

Labor had campaigned against the privately-run Cashless Debit Card (CDC) scheme run by its predecessors, scrapping the Indue CDC late last year. 

However, the same bill retained a BasicsCard in some communities, where it will be administered by the Department of Social Services and Services Australia. There are still about 24,000 Australians on the Howard-era Basics Card, which can only be used at stores that the government has approved and severely limits online purchases.

The new SmartCard can only be used at outlets approved by the Department of Human Services.

The new Social Security (Administration) Amendment 6 (Income Management Reform) Act 2023, which passed the House of Representatives on March 28, retains this compulsory income management as part of the social security system.

The new SmartCard allows some communities to choose whether to impose income management, but individuals in these areas are not given the ability to opt-out. In this way, the card can be seen as compulsory for individual welfare recipients. 

The legislation allows people to be put on the SmartCard if their children have an “unsatisfactory” school attendance record, are categorised as “disengaged youth” or “long-term welfare payment recipients”. 

Additionally, a state or Territory official of a recognised authority, can decide that a person should be on the card. 

“The only differences between Labor’s SmartCard & the CDC are its name and colour,” Greens social services spokesperson Senator Janet Rice said on Twitter.

“It’s an insidious bill that hugely expands the Minister’s power to roll out compulsory income management in new areas and allows the SmartCard to apply nationally, despite Labor’s campaign against CDC in opposition.”

She noted that people can “‘voluntarily’ go onto the new Indue SmartCard, but are under compulsory income management either way. It’s a very loose use of the term ‘voluntary’ - choose which compulsory card you want to go on.”

The Parliamentary Joint Committee on Human Rights has released a report questioning  why the new scheme “[extends] compulsory participation in the enhanced income management regime”.

Experts say income management programs echo “the overtly paternalistic motivations of earlier government efforts to control the incomes of Aboriginal people” and “compound disadvantage and vulnerability”.

A 2018 report by the Australian National Audit Office found no evidence the CDC was working after its first five years, despite a cost to administer it of $170 million.