Who in the Morrison government will own the consequences of this wretched, possibly unlawful, scheme?
Bill Shorten rose in the House on Thursday, immediately after another bruising question time focused on the Angus Taylor imbroglio, and just before Pauline Hanson theatrically stiffed Scott Morrison on the union integrity bill, to ask a simple question – Who is responsible for this mistake?
Who will own the consequences of this botch-up seems a quaint sort of question to ask in politics these days. It implies that people in public life remain accountable for things, despite the steady erosion in standards, despite the tendency of some in politics to manufacture their own facts when the truth gets uncomfortable.
Shorten was speaking in this particular instance about robodebt, which in many respects is the most gobsmacking story of the political week. A quick recap in case these events flew under your radar.
The Morrison government on Wednesday settled a landmark challenge to its robodebt program, conceding a $2,500 debt raised against Deanna Amato,
a 34-year-old local government employee, was not lawful because it
relied on income averaging. As a prelude to the main event, the week
before the government suddenly abandoned sole reliance on income averaging to calculate debts, in the process dismantling a central plank of the robodebt program’s controversial automation which has seen tens of thousands of welfare recipients overcharged for their alleged debts.Who will own the consequences of this botch-up seems a quaint sort of question to ask in politics these days. It implies that people in public life remain accountable for things, despite the steady erosion in standards, despite the tendency of some in politics to manufacture their own facts when the truth gets uncomfortable.
Shorten was speaking in this particular instance about robodebt, which in many respects is the most gobsmacking story of the political week. A quick recap in case these events flew under your radar.
Just in case you’ve never grappled with robodebt before, if you’ve missed the litany of horror stories about systemic indignities visited on our fellow, often vulnerable, humans (and the case studies are truly horrible), at the simplest level the scheme works like this, in two parts: the government sends benefit recipients letters claiming there’s a discrepancy, which escalates to a debt; but a number of these alleged debts have been over-egged because of the income-averaging formula.
The Australian Council of Social Service is one of many advocacy groups that has been trying to tell the government for yonks there are two fundamental flaws in the scheme: the income averaging, which inflates debts; and reversing the onus of proof, meaning people hit with debt notices have to prove their innocence rather than the commonwealth proving that money is owing.
Just a bit more background about the system quickly before we move on (and this one is a mind-focusing statistic): Acoss says before robodebt commenced, the government would typically investigate and pursue around 20,000 overpayments each year, but once the semi-automated scheme took effect, debt collection increased to 20,000 overpayments each week.
Back to Shorten now. The former Labor leader has grabbed the robodebt cause with both hands since losing the election in March and taking the shadow portfolio of government services.
As I’ve flagged, concerns about the scheme aren’t new. There has been a persistent chorus of very respectable voices, including a former administrative appeals tribunal senior member, Terry Carney, pointing out for some time that robodebt is likely unlawful – that the commonwealth has been raising money that it is not entitled to raise. Shorten’s specific contribution to the mounting pressure was strapping some booster jets to those arguments, rustling up a class action by Gordon Legal challenging the legality of the scheme.
When he launched the class action, Shorten said it was time to test “the legal foundations of robodebt, because my own research in the last couple of months has led me to believe it is almost certainly illegal”. When he spoke to parliament on Thursday, Shorten pointed out that if the transgressor was a major bank, if the bank sent customers hundreds of thousands of letters demanding money unlawfully, the government in Canberra would be outraged. There would be calls for the chief executive, or the chairman, to go.
But if the government was actually the bank in this analogy, then things obviously become more complicated. If the government screws up, does it chastise itself? Does it become outraged by its own ineptitude and cruelty? Does it write a thunderous opinion column in the Daily Telegraph, flogging itself?
Well, no, it doesn’t.
Shorten then directed a bunch of practical questions to government MPs across the chamber. These would have been uncomfortable, in the event anyone was listening rather than wondering how quickly they escape to the airport after the final sitting day of the penultimate sitting week.
“What are you in the government going to tell people who have been served notices which may be unlawful; what are you going to tell them to do? Are you going to tell them to seek a refund? Are you going to tell them to join a class action, or are you going to tell them, go away, I’m not apologising for anything. These are the questions now arising out of this case.”
There are other questions too. The most obvious one to ask is how long have senior figures in the government known robodebt is a house of cards?
Given the voices critiquing the scheme were respectable, persistent, and loud enough to have registered, did anyone listen? Did anyone (minister, ministerial adviser, bureaucrat) think, bugger me, that Carney bloke from the AAT, that emeritus professor, might actually know something about social security law, perhaps we ought to check this out just to be prudent?
Is it actually possible nobody listened, or checked properly, until the legal actions started piling up? It blows my mind that this could have happened, because I have a deep respect for the institutions of government in this country. They give every appearance of being competent. But if no one listened or acted in this case, that’s negligent. What will be the costs to taxpayers of any wilful deafness in officialdom?
Astonishingly in the circumstances, rather than embarking on a defensive retreat, my colleague Luke Henriques-Gomes revealed in August the government was actually looking to push forward with this system, targeting thousands of pensioners and other “sensitive” welfare recipients under a proposed expansion of the wretched scheme – an expansion that was needed to chase $2.1bn in budget savings.
In contemplation was chasing people aged 65 and over, people living in remote areas, people who were homeless, and people with disabilities. According to the documents Henriques-Gomes obtained, the department was chasing the money. It needed to carry out an additional 1.6m income reviews over the next three years to reach the promised savings from the scheme, including 350,000 debt-recovery reviews among “sensitive” or vulnerable groups.
The minister currently responsible for this debacle, Stuart Robert, has been arguing, Black Knight style, that the setbacks of the past fortnight are just a flesh wound, that only a “small cohort” is affected by what is obviously a colossal botch-up.
But my colleague Paul Karp has reported that human services staff have been told that up to 600,000 of the 900,000 robodebts that have been issued used income averaging.
As a consequence, those cases will need to be reassessed, and more than 220,000 may require refunds or waivers. Given this, Shorten wondered on Thursday whether the government would have to rehire public servants bundled out during various efficiency rounds to review the suspect cases.
Let’s land this weekend by cutting to the chase. The first thing to say is it’s an entirely uncontroversial principle for a government to pursue debts in cases of overpayment. We all need Australia’s welfare system to be fair, transparent, targeted and fiscally sustainable.
But robodebt was hatched for a simple, clinical purpose: to return money to the budget at a time when the budget was firmly in the red. Viewed through the lens of the budget papers, robodebt was about supplying magic billions to the bottom line so the government wouldn’t have to cut spending or raise taxes in ways that might have cost it votes.
Brutal, but true. Better to go after people you like to characterise as spongers on the public purse than people who might get angry enough with you to vote for someone else.
With that heart-warming, life-affirming thought in mind, here’s my last observation.
It is possible that a scheme that was meant to be a hollow log in budgetary terms, a vacuum cleaner for hoovering cash into the commonwealth coffers, could actually end up being a drain on the budget.
Imagine that: a scheme hatched to be a money printing machine for the commonwealth winds up costing taxpayers.
It’s hard to know whether that is ironic, or just unconscionable.
I strongly suspect it’s the latter.
- Katharine Murphy is Guardian Australia’s political editor
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