The crimes of 'robodebt'

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Cartoon by Mark David/@mdavidcartoons.

The Government has refused to come to terms with the moral turpitude of its "robodebt" program, writes Dr Binoy Kampmark

“What we are talking about here is the illegal thieving of people’s money, which has ruined lives and in some cases cost lives.”


 Shadow Treasurer, Jim Chalmers

IT IS THE sort of thing that would find a home among a tribe of callous, financial vandals. It first began with the then treasurer and current Prime Minister, Scott Morrison, assisted by then minister for social services, Christian Porter

The robodebt system was meant to be ambitious, which, in government policies on welfare, usually entails abundant cruelty. 'Through smarter use of technology', noted Morrison and Porter in a joint statement, 'we can better manage our social welfare system to ensure that every dollar goes to those who need it most'

The undeserving would be sought out and punished.

The system that took root, with the assistance of the Digital Transformation Office, fulfilled its remit by targeting recipients of welfare with a system of resolute incompetence. Centrelink letters, some 470,000 of them, were sent informing recipients that they had been overpaid because of inaccurately reported income received from employers. 

In the spirit of true, bureaucratic generosity, they were given 21 days to file a response, or have an unfavourable assessment made against them with a 10 per cent recovery fee.

The seeds of angst and terror were sown. Money rolled into government coffers, with alleged overpayments stretching back for up to six years. 

As legal academic Terry Carney explains

'Rather than using the recipients’ actual income in the fortnights for which benefits had been paid, Centrelink calculated an average fortnightly income over a longer period which often included fortnights they were in paid employment and not receiving Centrelink benefits.'

For the duration of the scheme casualties and criticism grew. In September 2019, Labor’s shadow minister for government services, Bill Shorten, stood aside Gordon Legal senior partner, Peter Gordon, in announcing a class action against the Federal Government to recover money illegitimately obtained. 

As Shorten put it at the time

“This is a government building their … position based on this faulty, immoral and quite possibly illegal scheme, but they should suspend it and rule out extending it to anyone else, and in fact they should revisit their own files and perhaps sit down and work out why this is wrong, and stop it.”

For Shorten, robodebt carried within it a sickness requiring a cure. In November 2019, Deanna Amato attempted to give not so much a cure as a dagger to the whole scheme, challenging the Government’s raising of her $2,754 robodebt

As with the entire shoddy enterprise, the gremlin lay in the reporting and the assessment, with fortnightly reported income being substituted with averaged Australian Tax Office (ATO) income data. An imposed penalty fee and a seizure of her tax refund followed, despite Amato having no knowledge of the debt. 

Victoria Legal Aid, in taking Amato’s case, argued that a person’s entitlement to social security payments had to be based on actual fortnightly income. Using annual income information to generate averaged fortnightly earnings was both lawful and inaccurate. 

It also argued that making the accused demonstrate an absence of robodebt was an undue reversal of the onus of proof and attacked the validity of the 10 per cent penalty fee and seizure of the tax refund.  

With their case in tatters, the Australian Government conceded in a letter to the Federal Court that central elements of the robodebt scheme were unlawful including the averaging policy of ATO data, the penalty fee and the seizure of the tax refund. Orders by consent were duly handed down by Justice Davis to that effect.

This would have been, for any political steward, a disaster of epic proportion. Not for the Minister for Government Services, Stuart Robert, who preferred fiddling rather than any admission. While averaged income data from the ATO would cease being used as a calculating tool to raise debt against welfare recipients, all that was required was a tinkering “refinement”. 

In the carefully chosen words of a spokeswoman for Robert:

'The Department of Human Services is currently in the process of identifying the small cohort of people the refinement applies to, however, the group is limited to those who did not respond at all to requests for the clarification of discrepancies.'

Last Friday, the Government announced that it would refund $721 million in debts farmed under the program. As Peter van Onselen noted acidly in The Australian, the release late that afternoon 'was the nadir of political spin. A cold and ruthless calculation.' 

In taking out the trash that day, the hope was that interest in the whole calamity would be lost over the weekend. Despite being told to repay the debts, the Government chose to wait until a time of pandemic to release the news.

Van Onselen continued:

'It has therefore left vulnerable people feeling even more vulnerable during one of the most stressful times in their lives.'

With egg over their proverbial faces, government officials have been tiptoeing around the obvious point: illegality. Ministerially, it has closed ranks, refusing to issue an official apology. A flawed system, it might have been. An illegal system, probably not. Attorney-General Christian Porter insists on splitting the finest of legal hairs with the coldest of demeanours. It might be unlawful, but that does not make it criminal. He might apologise, but best not to given that there is ongoing litigation. 

As Porter explained in defiance on the ABC’s Insiders last Sunday: 

“There’s litigation ongoing and that litigation argues, among other things, negligence and we don’t concede that.” 

At best came an acknowledgement that: 

“Using average annualised ATO data, which many governments have done, Labor and Liberal, has as it transpired, been shown to be an insufficient basis for raising those debts.” 

This is rather poor fare for one of the greatest welfare scandals in Australian history, an event that took the human out of Human Services while emboldening sanctioned thieving.  We await the outcome of the class action which, according to Gordon Legal, 'is now well advanced and moving quickly towards resolution'.

Dr Binoy Kampmark was a Cambridge Scholar and is an Independent Australia columnist and lecturer at RMIT University. You can follow Dr Kampmark on Twitter @BKampmark.

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