Retailers' warning on welfare card shop spies

EMPLOYEES across the country will be at risk of entrapment by government "spies", retailers have warned, under a Federal Government proposal to control fraudulent use of a new welfare debit card.

Cardholders will have about half their benefits quarantined under the scheme, in which money credited to the Eftpos-style card can only be spent at approved retailers on essential items such as food, clothing and petrol.

The scheme will be introduced into indigenous communities in the Northern Territory next month before being extended nationally.

The Australian Retailers Association has objected to the way the scheme will be monitored, describing as sinister and absurd the proposal by the Human Services Minister, Joe Ludwig, to use random audits and "secret shoppers" to ensure the cards are not being used fraudulently.

The association's executive director, Richard Evans, said although the retail sector had used secret or shadow shoppers for years, the practice was about improving customer service and not about spying on employees.

"They will be sending government spies in to create fraud," Mr Evans said, referring to Senator Ludwig's suggestion that Centrelink inspectors would pose as social security clients and attempt to buy excluded items such as alcohol and tobacco with the card.

Mr Evans said teenaged employees were particularly vulnerable, as they would not feel they had enough authority to tell someone much older or intimidating what they could or could not buy with their card.

"If they succumb, then the retailer and their employee will be penalised by the Government for applying its own program … it's just stupid."

But Senator Ludwig said the debit card was being introduced because "local businesses were crying out for a better system … they felt the existing system had left them out of the game".

The system would also allow recipients to choose from a wider range of shops than the current income management system operating in the Northern Territory under the previous government's intervention policy, where credit for welfare recipients was deposited directly to a limited number of shops.

Senator Ludwig said the Government was committed to compliance because the purpose of income management was to ensure welfare payments were spent in the interests of children.

"The Government is considering a range of practical ideas to help the system work effectively on the ground," he said. "No decision has been made on this issue."

The Australian Council of Social Service has already signalled its opposition to the card, saying the quarantining of benefits will keep disadvantaged families in a rut and not allow them to move out of their crisis.

The Opposition's spokesman for families, Tony Abbott, has said the card will become an administrative nightmare.

Related:

Budget to roll out new welfare card
Welfare plan: The new card will be initially rolled out in NT Indigenous communities. The Australian Council of Social Service (ACOSS) says the Rudd Government's proposed welfare debit card is not the best way to help struggling families.