It appears the Robodebt scandal is being used for gutter political point-scoring. But what’s new about that? Every side in politics plays ‘tear down the other side’ games!

What the Royal Commission into Robodebt exposes and should be the focus of our attention. In this case, it is the extent to which the public administration of government in Australia has descended into a morass of dubious behaviour. Robodebt is surely a window into a bigger problem…

Can Australia’s political system fix the problem? Depressingly, probably not.

(Note: Page-numbered hyperlinks below are to direct extracts from the relevant pages of the Royal Commission Report. A marked-up version of the full Report of the Commission is available here.)

The Royal Commission into the Robodebt Scheme Report is over 1,000 pages long. It is forensic. It describes and analyses the policies and behaviours that led to the government’s social welfare administrators alleging and seeking recovery of debts against tens of thousands of social welfare recipients where no debts actually existed.

The Commission Report details systemic unscrupulous behaviour (Page 34) layered over the top of incompetence, bad management, maladministration, and a failure to follow the letter of the law (Page 32) at the most senior levels of the public service and politics.

The Report states, ‘Robodebt was a crude and cruel mechanism, neither fair nor legal … a costly failure of public administration, in both human and economic terms.’ (Page 35)

It goes on to describe how, even at its conceptual stage, at least one key Cabinet committee was mislead. (Page 128)

The situation is not something confined to one side of Australian politics. It extends across the board. Think of Victoria with its refusal to investigate for breaches of the work safety laws over the Covid quarantine mess. The same approach drove the illegal live cattle export ban in 2011. There are many other instances that form a pattern.

What we are seeing are mindsets within government that become fixated on a perceived issue or ‘problem’ that has political currency. This proceeds to a determination to ‘do’ or ‘not do’ something, depending on a political risk/benefit analysis.

This is pursued with a bloody-mindedness that contorts and/or ignores truth and facts, despoils principles and practices of contract and justice, that then becomes enmeshed in extremely bad behaviour by government entities. This is the story of Robodebt.

How has Australia descended to this? Simple, is the answer. We have allowed government to not be held accountable to the same levels of transparency, honesty, and accountability that are expected of the rest of the community by government itself.

The Royal Commission Report details how the government of the day decided that there must by wide-ranging social security fraud. It claimed the fraud to be in the order of well over $1 billion per year, but there were insufficient facts to back that claim. Nonetheless, it was pushed as a political priority and the public service was charged with delivering the policy.

The days when the Australian public service was supposed to give ‘frank and fearless advice’ to government seem to have been dumped. Instead, the public service, in this instance at least, bunkered down to deliver on the outcome demanded. The Report refers to: ‘The failure to confront fundamental flaws … being a product of the culture within DHS at the time.’ (Page 164)

The orchestrated ‘scam’ that the government imposed on 866,857 Australians was pretty simple in its design as was its inbuilt flaw. This should have been glaringly obvious at even the conceptual phase, both to the top bureaucrats and the Ministers responsible.

The scheme involved the Australian Taxation Office (ATO) providing the Department of Human Services (DHS) with income records of welfare recipients over short periods of time, usually a fortnight. The DHS then assumed that the income for the short period applied over longer periods, say a year. This was referred to as ‘averaging’. (Page 30) But no such assumption could be made. The Report states ‘that was an extraordinary assumption’. (Page 32)

Welfare recipients, in particular, can and do have widely varying income flows. They may pick up income one week but have no income the next week. They have limited income consistency. This is well known to the DHS. The very assumption driving Robodebt was clearly stupid.

But the DHS forged ahead.

Based on this incomplete and flawed assumption, the DHS then alleged that welfare recipients had more income than they had declared, and that overpayment of welfare had occurred as a result on a massive scale. (Page 30)

Income data-matching had been used previously, but only as a trigger to seek more information from welfare recipients and employers about the truth of incomes. This checking was stopped. In fact, Centrelink officers were prohibited from contacting welfare recipients to enquire about the true state of incomes. (Page 30)

Instead, welfare recipients were required to respond to the income and debt allegations entirely online. If a person did not respond online, it was further assumed that the alleged income was fact and a debt was raised. There were no manual checks by Centrelink. And it is widely understood that large numbers of welfare recipients have haphazard access to the Internet and/or poor online skills. MyGov and other government portals can be confusing to negotiate even for people not on welfare.

Further, when the DHS alleged an income and raised a subsequent debt, the onus of proof about income shifted to the welfare recipient. (Page 30) That is, the welfare recipient had to obtain knowledge of what and from where their alleged income had come, information that the DHS did not necessarily supply, and then disprove the alleged income. And they had to do this entirely online, a huge task for anyone. In addition, proof of income going back up to five years could be required, even though such long-term proof of income was not part of previous welfare requirements. (Page 32)

When the welfare recipient could not disprove the income allegation, a 10 per cent penalty was automatically applied against them. (Page 30) The DHS then proceeded to undertake recovery action for the assumed/alleged debt. (Page 376) This included garnisheeing. This is a process where government can issue an order to forcibly withdraw money from someone’s bank account, their pay, future welfare payments, even the settlement on the sale of a house.

The DHS also outsourced debt recovery to private-sector debt recovery firms who aggressively chased welfare recipients and were paid a percentage of the money they raised. (Page 30)

The Robodebt scheme was initiated in mid-2015. By early 2017 it was in trouble where ‘…the chorus of criticism was deafening.’ (Page 195) But the Department and the Minister/s dug in and continued. The extent of ‘digging in’ was demonstrated when ‘…a long-time Centrelink worker who was working in income reviews and eligibility assessments’ had spoken to a journalist about ‘problems with the income compliance system’. (Page 209) The response of the Department and the Minister was to dismiss the whistleblower as being incorrect.

The whistleblower’s assessment of Robodebt’s problems was accurate, citing:

‘(a) doubling up of income due to errors in the correct identification of employers or income types, (b) the inclusion of non-assessable income which should be excluded from the assessment, (c) incorrect calculation of the amount of payments made to recipients, (d) the application of a recovery fee in circumstances where it should not be applied, and (e) directions to compliance officers which had the effect of inhibiting their ability to correct errors.’ (Page 201)

Even the occurrence of several suicides directly attributable to Robodebt, ‘… did not galvanise either the DHS or DSS into a substantive or systemic review of the problem of illegal, inaccurate or unfair debt-raising.’ (Page 221) Instead, the DHS ramped up its efforts to protect Robodebt to the extent that it engaged in what many consider to be unacceptable behaviour.

In relation to the Ombudsman’s investigations of 2017, the Royal Commission Report states: ‘DSS attempted to and did conceal critical information from the Ombudsman and represented that the Scheme was lawful.’ (Page 260) ‘The DSS explanation was dishonest.’ (Page 259) The Report refers to ‘… concerning behaviour by certain DHS staff, who demonstrated an alarming readiness to mislead the Ombudsman and conceal information…’ (Page 264). It refers to the Minister who ‘knew that the scheme was issuing inaccurate debt notices’. (Page 265)

Providing bad and inaccurate information to the Ombudsman was just one of several reprehensible activities undertaken by the Department, including towards the Office of Legal Services Coordination, the Office of the Australian Information Commissioner, and the Administrative Appeals Tribunal.

Each of the Royal Commission’s conclusions is backed by detailed and forensic analysis of events and the behaviour of the people involved.

Come late 2020, Robodebt had finally fallen over. The government closed the scheme down. ‘This involved reimbursement of $746 million to some 381,000 affected individuals and writing off debts amounting in total to $1.751 billion…’ (Page 35) as well as the settling of a class action.

The Robodebt scheme should not be seen as a one-off gross abuse of power by an Australian government. The abuse could almost be viewed as ‘normal’. Accountability laws do not apply to government in the same way they do to the rest of the community. This sets the circumstances for abuse of Australians by their government.

Take one example. In 2016 Unfair Contract law became available to protect small business people. These have been ‘beefed up’ with these stronger laws to take effect in November this year. Yet government departments are not subject to the laws. That is, government can engage in unfair contracts whereas the private sector cannot.

Then there is the Australian Taxation Office. The ATO’s powers make it a law unto itself. In my opinion, the ATO’s accountability obligations are essentially public relations ‘spin’ rather than legal requirements.

In 2018 the ABC Four Corners program aired Mongrel Bunch of Bastards. This allegedly exposed what some claim was gross and systemic abuse of small business people by the Australian Taxation Office utilising Robodebt-style methods and systems. The ATO have always denied the claims in the ABC piece. The difference between the ATO and the DHS is that the tax administration laws are written to make lawful ATO Robodebt-style behaviour.

Look at these examples. It appears to me that the ATO can lawfully raise an allegation of a tax debt such that that ‘allegation’ is at law a fact. The taxpayer is required to disprove the ATO ‘debt’ with the onus of proof on the taxpayer. The ATO is under no legal obligation to provide all the information it relies on to make its assessment. Once a debt is raised, the ATO can garnishee a person’s income, bank account/s and so on. Income and debt allegations can go back longer than than a person is required at law to keep tax records. ATO whistleblowers, in my opinion, have been treated the same and worse than the Robodebt whistleblower.

The similarities between the unconstrained powers of the ATO and the behaviours adopted by the DHS under Robodebt are stark. The questionable legality of this is highlighted by the Robodebt Royal Commission’s concern about the behaviour of the ATO. The Commission says ‘… the Commission considers that there is a serious question as to whether information was lawfully disclosed by the ATO to DHS for the purpose of data matching under the scheme.’ (Page 504)

Surely, if the ATO had properly attended to the lawfulness of the information transfer, Robodebt may not have occurred?

In 2019 the Federal Parliamentary Tax and Revenue Committee recommended major reform of the ATO but nothing has been done. The Chair of the Committee stated, ‘Australians need to be protected against what has become a very powerful tax office.’

The issue is not one of seeking to neuter the operations of government. Rather it’s about effective, inbuilt checks and balances against the awesome and overriding power of government. Robodebt has demonstrated that the existing systems of check and balances are slow, expensive, and cumbersome. While these systems grind on, huge harm can and is done to individual Australians.

The Parliamentary Tax Committee recommended the ATO adopt a US system of checks that applies to the Internal Revenue Service. In the USA, the IRS has an internal, independent Taxpayer Advocate whose legislative instruction is to ensure taxpayer rights. The Advocate has automatic and unrestricted access to all IRS records and processes and can and does take action when the IRS violates taxpayers’ rights. It’s fast and effective and kills abuse at its source.

If Australia is to move to a more lawful, uncorrupted system of government administration, such models as the USA Taxpayer Advocate should be adopted here.

If the DHS had had a legislated, internal Welfare Recipient Advocate similar to a Taxpayer Advocate, maybe Robodebt could have been nipped in the bud. Certainly, relying on internal government department policies to stop such government misbehaviour is not enough. Parliament needs to take charge of the bureaucracy.

Ken Phillips is Executive Director of Self Employed Australia and is on Substack

Get 10 issues for just $10

Subscribe to The Spectator Australia today for the next 10 magazine issues, plus full online access, for just $10.

SUBSCRIBE 10 issues for $10 REGISTER 3 articles a month

Already a subscriber? Log in