Robo-debt victims still missing an apology from Canberra

June 01, 2020

The federal government has faced further scrutiny for its Centrelink robo-debt disaster, with the opposition demanding that Prime Minister Scott Morrison and his cabinet apologise for the hardship and distress caused from incorrectly demanding money off those on welfare.

The government on Friday admitted it got around 470,000 “debts” issued under Centrelink’s Online Compliance Intervention (OCI) initiative wrong, and expects to refund an estimated AU$721 million back to Australians who paid the government money that they didn’t owe.

Minister for Government Services Stuart Robert did not apologise for the error when he made the announcement late Friday afternoon, with former opposition leader Bill Shorten saying, “for Stuart Robert, sorry seems to be the hardest word”.

Robert said the government has always taken its responsibility for income compliance and the welfare system “sensibly and appropriately and seriously”.

“It’s important the government provides the right amount of money to the right people at the right time,” Robert said. “And that’s the purpose of the government’s income compliance program.”

He said the government moved quickly to pause the program once it became aware that raising a debt wholly or partly on the basis of ATO average income was not sufficient under law. The government paused the automated data-matching element of robo-debt in November, nearly two years after testimony from individuals that the OCI system caused them feelings of anxiety, fear, and humiliation, and reportedly even resulted in suicide.

“This is money that the government was never entitled to take,” Shorten said over the weekend. “At the heart of this broad budget scheme, the government unlawfully enriched itself. It illegally took money off some of their most vulnerable people, about half a million of them, it sat on it for years. It has said, ‘Not our problem, we’re entitled to the money’.”

In 2016, the department kicked off the data-matching program of work that saw the automatic issuing of debt notices to those in receipt of welfare payments through the Centrelink scheme. The OCI program automatically compared the income declared to the Australian Taxation Office (ATO) against income declared to Centrelink, which resulted in debt notices, along with a 10% recovery fee, being issued whenever a disparity in government data was detected.

One large error in the system was that it incorrectly calculated a recipient’s income, basing fortnightly pay on their annual salary rather than taking a cumulative 26-week snapshot of what an individual was paid.

Centrelink’s OCI program from 1 July 2016 through 31 August 2019 saw 1,159,662 assessments be initiated using the automated data-matching technique.

Prior to taking up his post as Australia’s Attorney-General, Christian Porter was the Social Services minister. Morrison was Treasurer when robo-debt was launched.

In early 2017, Porter said robo-debt was “actually working incredibly well“.

Speaking over the weekend, Porter changed his tune but repeated Robert’s spin — that the government zeroed the debts once it had become clear the basis upon which the debts were being raised was insufficient.

“We received advice, at the time that the program was put together, that it was lawful and many governments have used ATO averaging data over many, many years — Labor and Liberal. It had always been the case that we had proceeded on the basis of advice that it was lawful,” Porter claimed.

He also said the error wasn’t made due to a lack of human oversight, but rather, attributed it to the insufficiency of the data Human Services relied upon from the ATO.

With the refund to be issued only to debts from the official start of robo-debt, Porter said there’s a statute of limitation on pre-2015 debts.

“That system was also not a sufficient basis for raising debts, even before the automation,” he said.

“Well, we’re refunding everyone who has been part of the compliance system using income averaging, whether the debt was wholly raised or partly raised, even for those people who acknowledged the debt — we’re refunding — so it’s a clear and simple solution to a problem but we’re not going back that far.”

The government spent AU$129.5 million on labour hire arrangements collecting debts.

With a class action trial just weeks away, Robert and his departments have for months claimed legal professional privilege in providing testimony on robo-debt to Parliament.

Shorten is convinced the government had facing court in mind when it admitted fault.

“When the ministers have to appear in court — that’s what’s motivating them to start putting checks and fold like a deck of cards. There’s been a lot of harm done here and the class action isn’t over,” he said.

“The government’s trying to run it to legal action by press release and they can’t avoid going to court and explaining their actions. That’s what happens when you start legal action. It should never have got to a legal action. But now it’s there the government still got to turn up to court and explain to the judge what they have and haven’t done.”

The shadow minister for Government Services said there’s legitimate debate about the pain and the hardship which was caused by this illegal scheme to be heard.

“We’re all a bit jaded and cynical about politics, but let’s just stop and pause and think for a minute what happened here. The government pretended it had the power to take money, issue debt notices, send the debt collectors against half a million Australians,” he said.

“It was illegal.

“The government has for years been illegally taking people’s money, and has been putting ordinary Australians through pain, trauma — people have lost jobs, people have lost relationships, people have suffered psychological injury, people were not allowed to go overseas, all on the basis of illegal government debt notices.”

Shorten also speculates the bill could be revised from AU$721 million to potentially passing AU$1 billion, based on estimations from the legal community, he said.

In addition to not apologising to the victims of the scheme, Morrison and his ministers have been accused of “taking out the trash” with its refund announcement appearing so late on a Friday, merely minutes after the prime minister made a national address to discuss the COVID-19 pandemic, when he made no mention of the blunder his government was about to reveal.