Politics

Company running cashless debit card scheme in Australia claimed $2m in jobkeeper before rise in revenue | Welfare

The company contracted by the federal government to run the controversial cashless debit card claimed $2m in jobkeeper payments before increasing its revenues during the pandemic.

Payments firm Indue, which was handed a $26m, two-year extension to its contract to keep running the scheme late last year, received about $2.1m in jobkeeper wage subsidies in total. That comprised $632,700 in June 2020 and $1.49m between July and September 2020, according to its annual report.

The company’s revenue increased in 2019-20 and 2020-21, leading to profit of $2.1m and $2.5m, the report shows.

Under the jobkeeper program, businesses were required to estimate whether their turnover would decrease by 30-50% when compared to the previous year, depending on their size. There is no suggestion Indue did not qualify for the payments under the rules of the scheme.

Controversially, the government elected not to include a clawback provision to recoup money from those companies that outperformed expectations.

Labor’s assistant treasury spokesman, Andrew Leigh, who has called for greater accountability for firms that claimed the subsidy, said Indue should voluntarily pay the money back.

“Indue makes tens of millions of dollars running the cashless debit card for the Morrison government,” he said.

“Now it turns out they got $2m in jobkeeper, despite increasing their revenues during the pandemic.”

Parliamentary budget office analysis, first reported by the ABC on Tuesday, found the Morrison government paid out a total of $38bn in jobkeeper to businesses that did not suffer sustained downturns during the pandemic.

Several Australian companies have faced public pressure to pay back jobkeeper funds, and some have, but the government has resisted calls to compel them.

At the same time, the government has sought to claw back about $50m from 16,000 welfare recipients who were overpaid due to an overlap with jobkeeper payments.

A spokesperson for Indue said the company met the jobkeeper criteria by estimating their “GST turnover had fallen or would likely fall by 30% or more”.

The spokesperson said the company could “confirm that our actual GST turnover fell by more than 30%”.

The money was used to “preserve employment for Indue staff and allowed Indue to support hardship applications from our customers impacted by the pandemic”.

“Accordingly, we intend to retain the jobkeeper payments on the basis that Indue met the qualifying criteria, the payments were accessed for legitimate reasons and used by Indue for the purposes it was intended,” the spokesperson said.

The spokesperson said the company’s “modest profit” included its jobkeeper payments.

“As outlined in our latest annual report, the government measures supported consumer confidence which assisted payment volumes and revenue to progressively recover as lockdowns lifted,” the spokesperson said.

Leigh’s call for Indue to pay the wage subsidy back comes amid a political fight over the future of the cashless debit card.

The scheme aims to reduce social harm – such as gambling, alcohol and drug abuse – by quarantining 80% of a person’s payments onto a card that can’t withdraw cash or be used to buy items banned under the program.

Given 42% of participants are Indigenous, the government’s card scheme has been branded racist, and cardholders have told Guardian Australia it causes stigma, has led to missed rental payments, and limited their ability to access cheaper goods online or in the cash economy.

A Senate inquiry previously heard claims one mother could not buy a children’s book from a bookstore because the shop also sold books on distilling alcohol, while a nursing student is said to have been stopped from buying a stethoscope and university books from the Medshop. The Senate submission claimed that Indue staff said she could not buy those things as she may be trying to buy hand sanitisers to drink.

Labor MP Julian Hill told parliament last month one woman was “forced to beg Indue for permission to buy a bra that fitted her from a shop that wasn’t on the approved list” and “forced to send in photos”.

Hill has introduced a private members’ bill to scrap the scheme once it expires at the end of next year and is among a number of backbench Labor MPs claiming the government plans to place age pensioners onto the card.

Anne Ruston, the social services minister, has described the claim as a “lie”, and repeatedly ruled out plans to expand the card to age pensioners.

The two-dozen age pensioners currently on the card have volunteered or been placed on the scheme by Cape York’s Family Responsibilities Commission.

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While the Cape York site is overseen by the commission, the government runs the trials in Bundaberg and Hervey Bay in Queensland, the Goldfields and East Kimberley in Western Australia, and Ceduna in South Australia. The card also operates in the Northern Territory.

Labor argues the card is an example of the privatisation of the welfare system and it has been long opposed by the Greens, welfare groups and grassroots campaigners.

Indue’s total contract with the government, dating back to 2015, is worth $70m, including a $26m two-year extension when the government won a Senate vote in December to keep the scheme going.

One major study into the card’s effects in Ceduna found it had “no substantive impact” while a government commissioned independent report was mostly inconclusive on whether the card had led to a reduction in social harms.

Last month the government announced participants in the Northern Territory would be able to select from the Traditional Credit Union as well as Indue as their card issuer.

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