Bass Liberal MHR Bridget Archer says she will refuse to support any attempt to expand the cashless welfare card into Bass, and that it "will never be accepted" by the electorate.
Ms Archer spoke against the expansion of the scheme in Parliament on Wednesday evening, but will vote in favour of the government's plans in the hope that alternative structures could be developed instead.
The expansion involves making the card permanent in the East Kimberley, Ceduna, Goldfields and Bundaberg, while transitioning the entire Northern Territory and Cape York into the scheme.
Ms Archer said she believed the government had plans to continue expanding the card into other areas, but she would fight to stop it from occurring in Bass.
"This type of program will never be accepted in my community, and I want to make it unequivocally clear today that any proposed future expansion of this scheme will not have my support," she said.
In her speech to the House of Representatives, Ms Archer said "so much damage has been done" due to stigma, and that the card should be a temporary tool, rather than applied generally.
She spoke of the card as an overly "punitive" measure which "casts a wide net" and punished people as a collective.
"If we truly want to move the dial on intergenerational disadvantage we need to address complex issues like trauma and put in place a range of effective evidence-based programs that work to address the issues that keep our communities in poverty," Ms Archer said.
"I find it extremely disappointing and frustrating that we would look to support income management systems while not addressing the reprehensible practices of payday lenders."
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Having been a recipient of government welfare in the past, Ms Archer said she understood the impact the scheme could have.
"I can understand the distress that so many on forced on this card would feel - this system of income-management strips away autonomy and a sense of pride no matter how well intentioned," she said.
Her vote in favour was because there "are not alternative payment structures in place so to just stop it in its tracks will cause further disadvantage."
Lalor Labor MHR Joanne Ryan spoke after Ms Archer and described her speech as "incredibly measured, considered and informed".
But Tasmanian Labor members were critical of Ms Archer for refusing to cross the floor and vote against the card's expansion.
She had earlier spoken against any plans to reduce JobSeeker to pre-COVID levels, but remained supportive of the government's current plans.
Tasmanian Labor senator Helen Polley said she should have used her parliamentary vote to "stand up for her community".
Tasmanian Liberal senator Wendy Askew had chaired the committee which examined the card, and provided a report recommended its expansion.
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