Making Logan the largest site of a Commonwealth drug-testing trial for welfare recipients is about making the Queensland city better, not stigmatising it, according to the federal government.
Social Services Minister Christian Porter and Human Services Minister Alan Tudge announced on Wednesday the two-year trial will start in Logan from January.
Under the trial, 5000 new recipients of Newstart Allowance and Youth Allowance will be tested for illicit substances across three locations in the country - with Bankstown in NSW already revealed as one of the other locations.
It's estimated half of those tested will come from Logan.
Logan City Mayor Luke Smith is furious he wasn't consulted and fears the trial will stigmatise the city.
"Drugs are a nationwide problem, so why isn't there a nationwide trial? Don't single out one city in Queensland," Mr Smith told AAP.
As part of the trial, those who return a positive test will have 80 per cent of their benefit payment put onto a Basics Card which limits the amount of money people can withdraw as cash, with remaining funds reserved for essentials such as rent, child care, food and household needs.
After a second positive test, the person will have to see a doctor at the government's expense and undergo any treatment proposed in order to continue receiving benefits.
Mr Porter says it's clear there is an issue with drug abuse in Logan and it would be folly to avoid that reality.
"This is a great community that we're hoping to make better," Mr Porter said.
"The problem is quite elevated consumption of highly addictive and dangerous drugs like ice.
"Recognising a problem is not to stigmatise a community, it's to try and take the first step to offering practical solutions to a problem we all know exists."
Opposition frontbencher Jim Chalmers, whose electorate includes Logan, said the trial was about "bagging the community" and headline-chasing rather than getting people jobs.
"This program has been tried elsewhere and it's failed dismally," Mr Chalmers said.
AMA President Michael Gannon also said the trial wouldn't work.
"It's simply unfair and it already picks on an impaired and marginalised group. It's not evidence-based. It's not fair," he told the National Press Club.
Mr Porter defended the scheme, saying it had taken lessons from similar programs overseas and was a completely new model to those of the past.
He added Logan's large catchment area for people coming into unemployment benefits had been a large part in deciding why it had been selected for the trial.
"There's about a 570 per cent higher number of people coming into the Newstart system here in Logan," he said.