Disempowering people through the Healthy Welfare Card
In the just-released Forrest Review, the authors say “If a cashless welfare system is effectively and smoothly introduced, it will render the cash system that preceded it an irresponsible social experiment.“.
I think they’re a little confused about where the irresponsible social experiment might be happening.
The authors recommend “That the Commonwealth Government implement immediately a Healthy Welfare Card scheme in conjunction with major financial institutions and retailers to support welfare recipients manage their income and expenses. ”
The intention is that the card would “enable the purchase of all goods and services, with the exception of alcohol, gambling products, illicit services and instruments that can be converted to cash (such as gift cards) and exclude activities discouraged by government, or illegal in some places, such as pornography.”
Never mind that many (if not most) welfare recipients are as competent to make financial decisions, and as capable of rationally choosing to get drunk, watch porn and act stupid, as the gainfully employed. Let’s ignore the disempowering nature of this initiative and assume that there is a defined group of people who cannot manage their welfare benefits and need to be protected from themselves. And that this is a reasonable thing to do and in no way paternalistic.
It still won’t work.
Because outside of isolated communities, it’s too hard and humans are far too good at finding new ways to act like idiots.
Let’s think about the exclusion of certain goods, services and ‘activities discouraged by government’. And let’s assume that people genuinely try to work within those exclusions. Unless you block access at a very coarse level (e.g. all bottle shop sales), the complexities are endless. Imagine some scenarios:
- Alcohol is blocked. Could you still go into a bottle shop and buy a soft drink? Could you order a meal and a glass of wine from room service in a hotel, or only a meal? What if you wanted to buy your friend a drink? What if you raided the minibar? Would you still be able to pay your hotel bill?
- Gambling is blocked. Could you still go to your local RSL for a cheap meal? What if the RSL is blocked and it’s the only restaurant in town? Could you buy a lotto ticket at the newsagent? Could you buy a raffle ticket to support your local school?
- Pornography is blocked. So if you went down to the local video rental, could you rent “Eyes Wide Shut” but not “Debbie Does Dallas”? Would you be allowed to buy a copy of “Fifty Shades of Gray” from the newsagent? What about “Lady Chatterley’s Lover”? If you geoblocked and got a Netflix account, would the adult movies be blocked? Or would this simply be an ‘activity discouraged by government’?
And what about ‘instruments that can be converted to cash’? News flash. If cash is around, anything that is valued by someone with cash can be converted to cash. The system will only fully work if you live in a prison or on an island surrounded by sharks. Here are a few obvious, possibly untraceable and sometimes even legal workarounds I thought up in just a few minutes:
- Tom and Jerry are neighbours. Tom is a welfare card holder. Jerry is not receiving welfare and has a legal job and access to cash. Tom and Jerry make a deal. Tom spends his welfare payment on things he is allowed to buy (including things Jerry wants). Tom trades the extra items with Jerry for cash or (if Tom is banned from the bottle shop or the RSL) for things that Tom can’t buy.
- Tom agrees with Jerry that he will shoplift in return for cash or kind.
- Tom panhandles for change to get cash.
- Tom uses his welfare payments to buy cheap things that are pawnable, like small electrical goods, and sells them to the pawnshop for a heavily discounted price.
- Tom steals from his friends, neighbours and random strangers to get cash.
You can just imagine the cost and difficulty of enforcing compliance in all these scenarios. How could a retailer ever know Tom is buying an extra packet of Tim Tams so Jerry will slip him a can of beer? How can a pawnshop refuse to accept an item if it has been legally purchased? The outcome in every case is that Tom still gets the things he is not allowed to have, he just pays more, takes more risks and leaves his family worse off.
The authors’ response to these complexities is to warn that “in the short-term, as lifestyles are adjusted, levels of petty crime may be temporarily elevated, before falling to levels lower than they were previously due to the elimination of drug and alcohol abuse”.
The theory seems to be that making it more difficult to get stuff will mean people will stop using stuff.
Right. We saw how well that worked with Prohibition.
Where do I sign up?