The Government has admitted to yet another loophole in its $50 million cashless debit card which allows participants to purchase alcohol as it continues to foreshadow a national rollout of the card.

The cashless debit card prohibits the purchase of certain items or services such as alcohol or gambling from declared outlets based on what is known as their merchant category code.

For example, Duty Free Stores and Gambling Transactions and Betting merchants are unable to process transactions by patrons using the cashless debit card.

Last night, Labor senators discovered a merchant code 5812: Eating Places and Restaurants which is currently not on the list of declared merchants.

When asked by Senator Malarndirri McCarthy, does that mean that I could use my Cashless Debit Card at the restaurant with the Merchant Category Code 5812 to buy alcohol?, a Department of Social Services official answered, yes.

This is the latest loophole in a series which has exposed the defectiveness of the Governments multimillion dollar ideological boondoggle.

In October, following intense scrutiny from Senator McCarthy, it was discovered that participants could use a credit card to purchase alcoholic items or gambling services, and then use the cashless debit card to pay off the credit.

The Senate Community Affairs Committee also heard about the rapidly increasing cost of the card.

In the 2015/16 financial year, the Government spent $10.982 million on the card.

In 2016/17 - $8.076 million.

In 2017/18 - $15.132 million.

And in 2018/19 - $16.176 million for a grand total of $50.4 million or $4,333 per participant.

And now the Government wants to expand its defective card nationally.

International evidence shows that mandatory income management does not work.

What was clear from estimates last night is that the Government is unprepared for the expansion of the cashless debit card.

At a time when the community is calling for an increase to Newstart to pre-empt the economic uncertainty ahead of the coronavirus pandemic, the Government is more obsessed with its multi-million dollar boondoggle.

FRIDAY, 6 MARCH 2020