Imagine a debit card without the ability to withdraw cash. The card cannot be used to buy gambling products, alcohol, cigarettes or other drugs. At the same time, every purchase is tracked and collected by the government, to be stored and monitored at a later date. It sounds like a science fiction dystopian novel but it’s real and it’s in Australia.
Welcome to the current situation facing remote Indigenous Australians. The ‘Cashless Debit Card,’ introduced in 2015 under Prime Minister Malcolm Turnbull, was sold as a card that could restore social cohesion to Indigenous communities. It was a panacea to a host of social problems, from alcoholism to school attendance. The premise was simple. The card would restrict 80% of a person’s spending on alcohol, gambling and drugs, whilst monitoring their expenses over time. These expenses could then be evaluated by the government. At the time, the government claimed that this was not income management, but something else entirely.
Not only is the card income management but it is also an invasion of privacy, an invasion of personal liberties and a breach of several human rights laws. It is also extremely ineffective at tackling the problems it purports to solve.
If low health outcomes, unemployment and addiction are chronic problems within the Indigenous community, then the solution is surely more welfare spending, rather than restricting individual freedoms and liberties. Government evaluations have found that 49% of people on the cashless card say that they are worse off now, than before it was introduced. In several communities, Indigenous Australians are selling the card to gain access to cash, and the consequent privacy and autonomy cash provides. They are willing to give up their payments in order to regain their freedom.
And why shouldn’t they? There is something particularly degrading about controlling an adult’s spending habits. To do so to one race in particular, rather than any other, is racism. Pure and simple. It is the same racist thinking that dominated the South during the American slave trade, where African Americans were seen as intellectually inferior when it came to financial management of their own savings. The idea of paternal financial management of the state and/or the white man over other groups, has a long and troubling history in black communities.
Australia has long held a policy of ‘Closing the Gap’ between Indigenous and non-Indigenous communities in terms of life expectancy, unemployment and other health outcomes. To do so, however, requires bold new thinking that does not, of itself, breach human rights law. Rather than restricting freedoms to close the gap, we should be empowering Indigenous communities to assert their freedoms in order to gain independence and dignity.
One way to do this is in the form of a Universal Basic Income. Currently a hot-button political topic, a Universal Basic Income, or UBI for short, is the idea of giving money, without restriction, to every citizen in a country. The money is meant to be spent on basic needs and services. But it is up to the individual to decide what they spend the money on.
A Universal Basic Income currently exists in the U.S. state of Alaska. Introduced by a Republican governor in 1982. The Alaska Permanent Fund Dividend (PFD) gives out $1000 per year to every Alaskan in the state. The money comes from the tax proceeds on Alaska’s oil reserves, or “oil rents”.
For the sake of this article, it is interesting to consider the effects of the Alaskan basic income policy on the native peoples of Alaska. According to a recent study, the fund reduced poverty by 22% in the local native community between 2011 – 2015. The effect was particularly profound upon the elderly native community, who lack employment opportunities. According to Matthew Burman, the author of the study, “the PFD reduced poverty among rural Alaska Indigenous seniors by more than 40%, to rates that are now relatively low.” The effects of the PFD plateaued over time, but nevertheless were significant in their immediate impacts on poverty.
The question is whether a UBI could work in the same way for Indigenous Australians.
There is no reason to believe that the Canadian experience is unique. In fact, unrestricted payments in the form of a UBI have three distinct advantages over traditional welfare systems. UBI is paid to everyone. This makes it less stigmatised, and resistant to political volatility or changes of government. Alaska’s PFD was passed in a Republican state and has been kept in place by both sides of politics ever since. It is so popular that it is impossible to repeal. Even budget-cutting Republicans have kept it in place, due to its widespread popularity.
Secondly, a UBI, as opposed to a cashless card, does not infringe upon privacy rights, human rights, nor individual freedoms. By keeping personal freedoms in place, a UBI helps to maintain a person’s individual dignity, which is an essential trait for both job interviews and educational training, if not for life itself. Treating Indigenous Australians and their money as somehow different to other forms of money makes Indigenous people second class citizens in their own country. This is not only racist but it prevents community cohesion and empowerment.
Finally, in remote communities where there simply are no, or very few, formal jobs available, a UBI can serve as a stopgap during times of high unemployment, or help serve basic needs in a shortfall.
There are corollary benefits to a UBI too, such as allowing women to leave abusive relationships or young people to have a basic springboard into education and training. The benefits are numerous, even when the payment is only $1000 a year.
How Much Would a UBI Cost in Australia?
Any proposal for a UBI is met with the question of cost.
The cost, in this case, would depend upon the model of UBI adopted. Andrew Yang, a current contender for the Democratic presidential primary in the United States, has proposed a UBI of $1000 a month for every person over the age of 18 in the country. Transferring this policy to Australia would have a headline cost of roughly $211 billion a year. This is more than the entire social welfare budget of Australia at $191.8 billion, as of 2019-2020.
But what if the UBI was less universal?
What would the cost of a UBI be for just Aboriginal and Torres Strait Islanders in Australia?
In that case, the headline cost for adults would be roughly $5 billion a year. This would ensure $1000 a month to every Indigenous adult in the country. The important thing about this figure is that it would include all Indigenous Australians, not only those living in remote communities. As a result, it could double up as a form of reparations for the historical harms persecuted against the Indigenous community in the past. Injustices like the Stolen Generation, the Frontier Wars and ongoing discrimination could be addressed in a symbolic fashion in this way. Treating all Indigenous people alike would likewise overcome the gut reaction that any such proposal would be unfair or unequal to certain members of the community. Instead, this would be Australia’s chance to benefit the entire Indigenous population.
A UBI for Indigenous Australians would restore privacy, dignity and human rights to a group who has faced historic discrimination, segregation and poverty. It would help abolish the cashless card system which entrenches an economic segregation between whites and blacks. It would treat Indigenous money the same as everyone else’s. It would help “Close the Gap”. It would act as a form of reparations for past injustice. It would promote freedom in both urban and rural communities. It would restore faith in our government. And most importantly, it would create a brighter future for the country as a whole.
It is up to us, as a nation, to determine the future of our people. A UBI in Australia would help save the future from the collective crimes of our past.