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The poisonous legacy of robodebt

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Cartoon by Mark David/@mdavidcartoons

The $1.2 billion settlement of the Centrelink robodebt class action should have been seen as another stumble in a Government display marked by flailing and floundering. 

But Prime Minister Scott Morrison remains located in a polling stratosphere, certainly relative to his Labor counterpart, Anthony Albanese, who increasingly resembles a caretaker leader awaiting quick dispatch.

Of all the disasters, improprieties and lashings of corruption that might be attributable to the Morrison Government, robodebt remains most hideous and typical of government callousness. 

It took human agency out of the equation; it targeted the vulnerable using an income averaging system instead of reported fortnightly income designed to recover overpayments to social welfare recipients, starting in 2016 but casting its cold focus back to 2010. 

It was given a heavy dressing of euphemism, a measure to strengthen “the integrity of welfare payments”. And it was led by Scott Morrison, who was keen to stress the more mechanical, rather than humane elements, of welfare. 

The media release from May 12 2015 chills the blood, suggesting a deeply suspicious Minister keen to keep his hands on the government’s cash reserves while using the crude language of law enforcement. 

It read:

'We will put a strong welfare cop on the beat focusing on deterrence, detection, investigation and prosecution to track down suspected welfare fraud and non-compliance.' 

The new system would focus on:

'High-risk geographic hot spots, unexplained wealth, undeclared income, and undisclosed changes of customer circumstances, which can lead to ineligibility for payments.'

During the course of its brutal life, this welfare cop on the beat sent out, through Centrelink, some 470,000 notices to unsuspecting recipients, accusing them of receiving excess payments. The overpaid sums had to be returned promptly – a window of opportunity of 21 days was given.

This same generous scheme was assailed by both the courts and specialist opinion. Between April and September 2017, Professor Terry Carney of the Australian Appeals Tribunal found in five judgments against Centrelink, claiming that it could not recover a debt in an exercise exclusively using a person’s annual income to claim overpayment over a shorter period of time. 

In November 27, 2019, the Federal Court ruled in the Amato case that income averaging and penalty fines were unlawful.

A gruff Peter van Onselen, writing in The Australian, was unimpressed: 

'Rather than admit its mistake as soon as it came to light, the government fought tooth and nail to defend its missteps, settling only at the last minute before the court case was due to start.' 

The result: $1.2 billion in a class action settlement. Of that amount, refunds of $721 million will be made to 373,000 people, $112 million earmarked as compensation and $398 million in cancelled debts making up the rest.

The Government remains resolutely above responsibility in this regard. As a spokesman for Government Services, Minister Stuart Robert said dismissively:

'The Commonwealth’s agreement to settle the matter is not an admission of liability by the Commonwealth, and does not reflect any acceptance by the Commonwealth of the allegations that the Commonwealth, or any of its officers, had any knowledge of unlawfulness associated with the income compliance program.'  

Robert also prefers to term the final $112 million in the settlement 'interest payments' rather than 'compensation', as the law firm Gordon Legal describes it.

Labor’s Government Services spokesman, Bill Shorten, who has made campaigning against robodebt his undying mission, is astonished that “no one in this Government is taking real responsibility for this $1.2 billion scam". 

Shorten also found the stubbornness of the Government astonishing: 

“I wish they had done their homework. It shouldn’t have taken until the day of the court hearing for the Commonwealth to come good.”

Morrison, for his part, has no interest in any actual compensation measures. He coolly explained to The New Daily in an interview:  

'Income averaging has been found not to be a way of raising debt that can be relied upon. And the Government has changed its practice.'

This is all a tad rich coming from a man who was instrumental in formulating the scheme, then ensuring its application. Instead of admitting to fault and liability for a program that destroyed lives (the Prime Minister believes a basic apology for “hurt or harm” was sufficient), Morrison has busied himself with hectoring distractions, such as the removal of Christine Holgate from her position as Australia Post Chief. 

The sum involved in the attack on the CEO was somewhat smaller than $1.2 billion: the issue with Holgate had been her supposedly injudicious purchase of Cartier watches valued at $19,000 as executive bonuses for her staff. 

He thundered in Parliament with unconvincing moral outrage:

“We are the shareholders of Australia post on behalf of the Australian people. The chief executive … has been instructed to stand aside, and she doesn’t wish to do that, she can go.” 

Unfortunately for Australia, the wrong person went. And just to illustrate the point, Morrison is happy to keep Robert secure and in place. Government heads won’t be rolling any time soon.

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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