Australian government eyes cashless cards for welfare recipients

MELBOURNE (Reuters) - Australia's prime minister is eyeing plans for a cashless debit card for welfare recipients and defended a proposal to drug test some job seekers, setting the government on a collision course with opposition lawmakers and welfare groups when parliament returns on Monday.

In an interview with Nine newspapers published on Sunday, Prime Minister Scott Morrison flagged welfare reform would be a priority for his government and discussed the cashless welfare card - aimed at preventing welfare payments being spent on alcohol, drugs and gambling.

He also defended plans to trial drug testing for new job seekers.

Morrison has resisted calls to raise payments to welfare recipients, despite support for an increase from a coalition that includes welfare groups, business leaders, opposition lawmakers and some members of Morrison's own ruling coalition.

The return of parliament on Monday following a winter break could prove difficult for the ruling conservative party after gross domestic product (GDP) figures published during the week showed Australia's economy is slowing.

Economic data released on Wednesday showed GDP rose just 1.4% in the June quarter from a year earlier, matching the worst of the global financial crisis and well short of the 2.75% considered “trend”. [nL3N25U4E2]

On Thursday, ANZ Banking Group (ANZ.AX) said it saw Australia's benchmark cash rate at 0.25% by May next year from a record low of 1% now. [nL3N25W14D]

Morrison won a surprise election victory in May largely based on a pledge that growth would be stronger on his watch.

Finance Minister Mathias Cormann said on Sunday that despite a challenging global economic environment brought on by global trade tensions and domestic issues, Australia continued to grow.

“We have been dealing with the impact of a significant flood and drought in the domestic context and, all things considered, the fact that we continue to grow is an indication of the resilience of the Australian economy,” Cormann told the Australian Broadcasting Corp.