ECON111 Microeconomics: Ethics Behind Cashless Debit Card Policy

This essay delves into the ethical considerations surrounding the use of cashless debit cards for welfare payments in Australia, particularly in the context of the ECON111 Microeconomics course. It examines the economic justification for welfare payments and contrasts payments in kind with cash pay...Read More

Running head: ETHICS BEHIND CASHLESS DEBIT CARD
Ethics behind Cashless Debit Card
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1ETHICS BEHIND CASHLESS DEBIT CARD
Table of Contents
Answer 1....................................................................................................................................2
a. Economic Justification for welfare payments.................................................................2
b. Payment in kind is inferior in welfare terms to payment in cash....................................2
Answer 2....................................................................................................................................3
a. Ethical framework...........................................................................................................3
b. People using the cashless debit card were worse off......................................................3
Answer 3....................................................................................................................................4
Arguments against the programme........................................................................................4
Answer 4....................................................................................................................................4
Arguments for and against the programme............................................................................4
Answer 5....................................................................................................................................5
a. Economic and ethical argument of income management...............................................5
b. Cashless debit card to recipients of government payments............................................6
Reference....................................................................................................................................7

2ETHICS BEHIND CASHLESS DEBIT CARD
Answer 1
a. Economic Justification for welfare payments
The government of Australia provides welfare payments to its citizen with the aim to
improve the quality of life of the needy citizens. The welfare payments are made to purchase
daily necessary goods, but it is seen that there are instances where beneficiaries use the
welfare payments for consumption of goods and services like alcohol, pornography and
gambling, thereby, hampering the purpose of welfare payments. This demands the need of
restricting the purchase of goods and services that are discouraged under the concept of
welfare payments. Hence, distribution of welfare payments via cashless debit card enables the
government to control the purchase of the beneficiaries that is payments related to purchase
of necessary living requirement can only be made through the card (Bielefeld 2018). The card
companies program cards in such a way that it would not work during any payments related
to discouraged items. Hence, it is justified that welfare payments via cashless debit card does
have a positive side.
b. Payment in kind is inferior in welfare terms to payment in cash
The widely known economic argument, welfare effect is higher in payment in kind
than payment in cash. The argument states that if a gift of $100 in kind is made to a poor
family then it may happen that the bundle does not satisfy the needs of the family. In the
other hand, if the family is provided with gift of $100 in cash then the poor family can
purchase the bundle it really needs and therefore welfare will be higher in this case. However,
the case described in the paper is different. The concept of welfare payment distribution via
cashless debit card does not choose any fixed bundle for the beneficiary by itself, it only
restricts purchase of some harmful product that are not meant to be purchased with the
welfare payment (Greenacre and Akbar). It is allowed to make any payment associated with

3ETHICS BEHIND CASHLESS DEBIT CARD
purchase of necessary goods. Hence, the case of distribution of welfare payment via cashless
debit card is not consistent with the concerned argument.
Answer 2
a. Ethical framework
The concept of cashless debit card is based on the ethical framework of Duty and
Rule Based Ethics. This ethical framework argues whether an action taken is moral or not. If
a person is taking some decision for its own benefit without considering its effect on others
then the decision cannot be considered as ethical. Considering the case of purchasing alcohol,
pornography and gambling with the money received as welfare payment to explain and relate
the notion of the concerned ethical framework with distribution of welfare payment via
cashless debit card. The objective of welfare payment is to help the poor with daily
necessities, but there are cases where individuals use the money to purchase discouraged
products like alcohol, as a result, the family of the individual might be deprived of the daily
necessities due to shortage of money. Thus, violating the ethical framework concerned with
this case by worsening others condition.
b. People using the cashless debit card were worse off
Welfare payment distribution via cashless debit card is mode of kind gift. Therefore,
beneficiaries would be worse off compared to the welfare payment via cash as per popular
economic argument because the beneficiaries are not getting the opportunity to select their
own set of bundle. However, it does not matter in this case because there is no fixed bundle
here, only discouraged products such as alcohol, pornography, gambling and luxury products
are not allowed to include in the bundle to fulfil the objective of the welfare payment. The

4ETHICS BEHIND CASHLESS DEBIT CARD
cashless debit card programme introduced in 2016 in Australia modified the welfare payment
by the paying the beneficiary with cash and kind both in the ratio of 80% as cashless debit
card and 20% as direct account transfer. Thus, enabling the people to spend at their will to
some extent. The objective of the scheme is to decrease social welfare and encourage
spending in healthcare, education and child welfare. Therefore, the schemes does not worse
of the beneficiary.
Answer 3
Arguments against the programme
There are several arguments against the ethical framework Duty and Rule Based
Ethics and the cashless debit card is based on the said framework, thus it should also face the
similar kind of negative arguments. It can be argued that the allocation of the welfare
payment in 80:20 via cashless debit card allows the beneficiary to spend some of the money
in discouraged products. The programme disregards the need of the individual beneficiary
separately and does not consider the people who do not indulge in discouraged products. This
prohibit the beneficiaries from making necessary expenditures actually required for their
family as need of different families are different (Bielefeld 2018). Thus, making individuals
immoral, as they cannot serve for the interest of their family. Apart from this discouraging
market of any product and thereby forcing the product manufacturers to shutdown is also
against ethics, thus causing severe ethical failure. Therefore, the programme is not perfect
and in some way worsening off others apart from beneficiaries indirectly.
Answer 4
Arguments for and against the programme
The cashless debit card has it impact on the targets of social welfare. The impact of
the card is either in the individual’s life or within the society by decreasing the alcohol, drug

5ETHICS BEHIND CASHLESS DEBIT CARD
and farms that are in association of these special products. This influences the individuals to
reduce their drinking and removes the problems created by the addiction of alcohol (Hunt
2018).
In the interaction with other policies individuals of the community faces the combined
impact of the cashless debit card and the other policy. The argument is that the welfare
recipients are targeted aimlessly or not in a systematic way from various angles with the
policy rules and the limitation and difficulties associated with the cashless debit card.
Stakeholders raise the point that the influence of the cashless debit card cannot be properly
judged with policy changes like removing restriction from alcohol.
Answer 5
a. Economic and ethical argument of income management
The cashless Debit Card Trial creates important ethical issues because of the
restrictions on the freedom of choice and controls to the individuals. Moreover, the rights of
individuals and the responsibility of parents, government and citizens must be balanced.
There are some limitation in which cases implication of income management can be justified.
Income management may be fruitful where few individuals wish to have the choice of
income management which is helpful with the problems related to the purchasing of specific
goods like gambling or drug addiction or in case of controlling of demand for money from
the family members with the existing problems (Klein and Razi 2018). In some cases,
organizations come in front of the row to support the inclusion of income management as a
measure of disadvantage in the society or in the community. In this cases, income
management may be proved appropriate in the society. Inclusion of income management to
represent the drawbacks in a society can be proved suitable in that society where it
incorporates the principle of subsidiarity. Income management can also help the individuals

6ETHICS BEHIND CASHLESS DEBIT CARD
to be stabilized in the circumstances where they are provided help to manage the problems
associated with the drug or alcohol addiction. In these situations, income management can be
proved appropriate.
b. Cashless debit card to recipients of government payments
Some ethical thoughts state passionately about rights of people in choices and control
about the nature and pattern of spending their income support payment. If, the cashless debit
card policy is applied on the recipients of government payments, there may arise an offence
against the policy that it is trying to put everyone in the same category because it seems the
individuals in the receipt of government payment is seemed to be dealt as indicating the
issues related to the alcohol, drug addiction and inability of child care. This also creates a
feeling of injustice that the individuals using the card while receiving government payment,
though they are not doing anything wrong (Bielefeld and Beaupert 2019). There are some
issues regarding social identity that is hurt by these. Some individuals of a community do not
accept the card as it presents them as moving backwards due to policies like rations.

7ETHICS BEHIND CASHLESS DEBIT CARD
Reference
Ahluwalia, Zeenia Singh, and Rajinder Kaur. "Demonetisation and Electronic Modes of
Payment." International Journal of Innovative Knowledge Concepts 7, no. 1 (2019): 81-85.
Bielefeld, Shelley, and Fleur Beaupert. "The Cashless Debit Card and rights of persons with
disabilities." Alternative Law Journal (2019): 1037969X19831768.
Bielefeld, Shelley. "Cashless Welfare Transfers for ‘Vulnerable’Welfare Recipients: Law,
Ethics and Vulnerability." Feminist Legal Studies 26, no. 1 (2018): 1-23.
Greenacre, Luke, and Skye Akbar. "The impact of payment method on shopping behaviour
among low income consumers." Journal of Retailing and Consumer Services 47 (2019): 87-
93.
Hunt, Janet. "The Cashless Debit Card Trial Evaluation: A Short Review." (2018).
Juntiwasarakij, Suwan, and Jirapon Sunkpho. "Toward Social Economic Antecedents to
Cashless Society." In Proceedings of the World Congress on Engineering and Computer
Science, vol. 1. 2018.
Klein, Elise, and Sarouche Razi. "Contemporary tools of dispossession: The cashless debit
card trial in the East Kimberley." Journal of Australian Political Economy, The 82 (2018):
84.
Klein, Elise, and Sarouche Razi. The cashless debit card trial in the East Kimberley. The
Australian National University, 2018.
Lim, Tai Wei. "Case Study 5: Cashless Convenience in China—A Survey of Its Development
and a Case Study of the Political Economics Behind the Mechanism." In Industrial
Revolution 4.0, Tech Giants, and Digitized Societies, pp. 137-144. Palgrave Macmillan,
Singapore, 2019.

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Sood, Atul, and Baruah Ashapurna. "The new moral economy." Note-Bandi: Demonetisation
and India's Elusive Chase for Black Money (2018).