The government will consider new welfare card technology where income management is appropriate, Prime Minister Tony Abbott says.

Prime Minister Tony Abbott is prepared to consider the idea of a welfare card to determine how recipients spend their money.

However, the government has ruled out quarantining income for everyone who receives welfare payments.

Mining magnate Andrew Forrest on Friday will propose a welfare card for a host of government payments, which would introduce income management to 2.5 million people.

Mr Forrest believes technology exists that would make it possible to ban the purchase of certain products, including alcohol and cigarettes, with quarantined welfare payments added to bank-controlled cards.

Most welfare recipients would be covered by the scheme – included in a review he led on indigenous welfare and employment – with age pensioners and veterans exempt.

Welfare management already applies in the Northern Territory, and is being trialled in parts of NSW, Western Australia, Queensland and South Australia.

Mr Abbott said the existing system, which quarantines 50 per cent of payments, was “quite administratively cumbersome”.

However, he is happy to consider new technology where income management was appropriate.

“Let’s try to make it work as smoothly and as efficiently as possible,” he told Fairfax Radio on Thursday.

A lot of people already opt-in for income management because they believed it would help them budget better, Mr Abbott said.

The parliamentary secretary guiding the Forrest review, Alan Tudge, said the government would closely examine the welfare card proposal but it had concerns over the breadth of its application.

“We are not exploring income quarantining across the board,” he told AAP.

The Australian Greens called on the government to reject Mr Forrest’s recommendations, saying it was “deeply alarming”.

Speaking to reporters later on Thursday Mr Abbott distanced the government from the Forrest report, which he described as “bold, ambitious and brave”.

“I suspect that some of the things in the report will be testing for public opinion,” he said.

“Some of the things in the report will run well ahead of any plans that the government currently has.”