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New technologies allow Government to police welfare spending

2 Feb 2010

The Federal government is investigating a controversial barcode technology to monitor the spending habits of welfare recipients.

It is currently the responsibility of retailers to ensure that recipients of welfare benefits do not use government funds to purchase black-listed items such as alcohol and tobacco. Human Services Minister Chris Bowen has looked to reduce this onus, seeking a solution that would allow ‘product-level compliance’.

The initiative was kicked off late last year with the BasicsCard, an $11 million program currently being trialed in the Northern Territory and parts of Queensland until November 2013.

The government card, issued by payments provider Indue, ensures payments are spent for their intended purpose by limiting use to approved merchants, prohibiting cash-out functions and appying weekly spending limits.

“As part of the transaction approval process, data on the specific items could be transmitted and [purchases that fell outside the guidelines] could be declined”.

“We expect that systems could cater for changes as and when policy changes, and with enhanced reporting government would be able to identify any misuse either by a merchant or cardholder”, explained a spokesperson for Indue.

With Centrelink and Medicare operations now to be consolidated into a single welfare super system, announced by Mr Bowen late last year, there have been concerns surrounding the concerntration of information being held in a central database.

Mr Bower has responded to this backlash.

“We will not house an individual’s personal, sensitive information in one place, vesting all control with one body or card,” he said. “This is not an Australia Card.”

Mr Bowen emphasised the government’s commitment to ‘extensive work on privacy and authentication, as well as opportunities for public-private partnerships’ as part of the project.

Although the technology is just one of the many solicited in the Better Dealings with Government paper released in October last year, more than fifty companies and organizations have published their thoughts on the proposed electronic barcode compliance system.

CSC Australia argued its ‘detect and prevent’ methodology was inconsistent with other government policies; the National Welfare Rights Network suggested it evoked images ‘of Big Brother’ like surveillance. Others argued that the major financial challenged was not income management, but the inadequacy of payments.

Financial institutions, however, have sung the praise of the new directions, applauding the move away from cheques to more cost-effective electronic payments and chip-enabled cards or mobile services.

With the huge shift to consumer transactions over the internet, online finance giant Bpay’s long-anticipated Me At My Bank Online (Mambo) system is being pegged as another next generation solution that would ensure optimized government payment delivery.

Similar to the VisaDebit card system, Mambo offers a facility to enable online payment direct from customer accounts, similar to a credit card account but using their money instead of the bank’s.

To find our more about future technology solutions and services in the Retail industry, check out CeBIT’s Retail Tech exhibition.
 

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