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The rise and fall of Robodebt

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A class action has commenced against Centrelink's Robodebt scheme (Image by Dan Jensen)

After many months of inflicting suffering on welfare recipients, Centrelink is now having to answer for its Robodebt scheme, writes Gavin Silbert QC.

THE DECISION of the Federal Court on 27 November declaring the Robodebt scheme to be invalid raises more questions than it answers.

Only as recently as March this year, Centrelink was threatening to charge daily compounding interest, garnishee wages and issue stop orders preventing people from leaving the country. What has happened to produce such a sudden volte-face?

It will be remembered that Centrelink sought to demand repayment from current and former welfare recipients, where one 26th of their annual income, as reported by the Australian Taxation Office (ATO), exceeded the income returned by recipients as far back as 2010 — based on their fortnightly returns. Such amounts assumed a consistent and regular income in the financial year in question and made no allowance for casual employment or, indeed, periods of non-employment. It will also be remembered that the algorithms used produced an absurdly inaccurate estimate of a recipient’s income.

Centrelink used such demands to effectively blackmail recipients into providing payslips and bank statements for the relevant period, which then enabled a human recalculation to occur — which always produced a lower figure than the algorithmic figure, often established that no money was owing and without which no human calculation was possible.

The Robodebt system has been subjected to intense criticism from numerous sources. The invalidity was clearly demonstrated by Professor Terry Carney AO in two journal articles, has been examined by two Senate committees and been the subject of two applications brought by Victoria Legal Aid claiming declarations of invalidity.

'Yet Centrelink and its minister, Stuart Robert, steadfastly continued to defend the indefensible, producing a tsunami of suffering and misery including suicides, depression and marriage breakdowns... '

In the first of those applications on behalf of Madeleine Masterton, Centrelink promptly cancelled the debt after the commencement of proceedings. The second of those actions, on behalf of Deanna Amato, resulted in the order invalidating Robodebt which was made without adjudication and with the consent of the Government.

Given that Robodebt was designed to threaten people into providing documents required to establish a debt, the process was clearly in breach of the Commonwealth’s obligations to act as a model litigant, which lies at the root of our democracy. Yet Centrelink and its Minister, Stuart Robert, steadfastly continued to defend the indefensible, producing a tsunami of suffering and misery including suicides, depression and marriage breakdowns without a skerrick of compassion and made worse where those affected were current welfare recipients.

The reasons for the backdown remain unknown, particularly when the criticism has been ongoing and undiminished for nearly three years. Centrelink is yet to issue an explanation and the Government has refused to produce its legal advice. The date of such advice may well demonstrate the fraudulent nature of the process over an extended period of time.

The returns to the revenue have been greatly outweighed by the costs of administration, and it seems unlikely that Centrelink is about to embark on a process of obtaining for itself the payslips and bank statements that it has tried to extract from recipients. The cost of such action would not be warranted by the relatively small amounts sought to be recovered.

There are tens of thousands of honest citizens in receipt of letters demanding that they repay amounts usually ranging from $1,500 to $10,000. Will Centrelink have the decency to advise them whether the demands have been withdrawn or are they expected to remain in limbo? Will Centrelink have the decency to offer an explanation for why a process which has caused so much heartache and misery has been pursued when the Government was aware of its illegality? Will those who have succumbed to Centrelink’s threats and paid money, which they were not legally obliged to pay, receive a refund?

The least that Centrelink can do is offer a full and public explanation for the position it has now adopted and perhaps an apology to those who have suffered might not be out of place. The Coalition Government, Minister for Government Services Stuart Robert and the public servants responsible for this public administration obscenity deserve the maximum possible condemnation.

Gavin Silbert is a Queen’s Counsel who has practised as a barrister for 40 years. Between 2008 and 2018 he was Chief Crown Prosecutor for Victoria.      

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The rise and fall of Robodebt

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