Centrelink's "robo-debt' debacle raises questions about the land of the fair go

AUSTRALIA wasn’t even federated when two states – NSW and Victoria – introduced pension schemes for the aged in 1900.

Eight years later the Commonwealth Government took over with a means-tested aged pension and a new invalid pension. By 1912 Australia had its first maternity allowance. By the 1920s some states, including Queensland, were paying unemployment benefits.   

During World War II it was Robert Menzies who campaigned for election on behalf of Australia’s “forgotten people” – the lower middle class – but it was the Curtin Government that initiated a comprehensive social services package, including a national sickness and unemployment benefits scheme, widows’ pensions, and increased aged and disability pensions.

In a speech on September 2, 1946, Prime Minister Ben Chifley linked expansion of Australia’s social services to belief during the war that the nation would survive, and conquer its enemies.

“Despite the multiple cares of a Government involved in a war threatening the very existence of Australia as a nation, the Government never lost faith in ultimate victory,” Chifley said.

“The best evidence of this is furnished by the great extension of social services and health benefits since it took office.”

I read that speech after working my way through acting Commonwealth Ombudsman Richard Glenn’s 113-page report on Centrelink’s online compliance intervention (OCI) program, or what became known as “robo-debt”. That’s the controversial automated program where tens of thousands of Australians received notices of “debts” they were assessed to owe the Commonwealth, in some cases stretching back to benefits received in 2010.

The “debts” were identified after matching data held by the Human Services Department, which oversees Centrelink, against Australian Tax Office data.

It was introduced in July, 2016. By December complaints to politicians, Commonwealth oversight bodies like the Ombudsman, and the media were in the thousands.

If you have a few minutes this Easter long weekend I recommend you take the time to read the report, to see how far one of the country’s largest government departments strayed from basic principles like fairness and acting reasonably with people. After you’ve read the report then take another look at what Human Services Minister Alan Tudge has had to say throughout this mess of his department’s own making, and assess his performance as an elected servant of the people.

Richard Glenn provided a big picture description of what the “robo-debt” program is all about, which is worth bearing in mind. The online compliance intervention project “effectively shifted complex fact finding and data entry functions from the department to the individual, and its success relied on its usability”, he said.

It helps to understand how badly the department implemented “robo-debt” by considering some of the case studies in Glenn’s report.

There’s Mr S, who received a Centrelink letter in October, 2016, saying he owed $3777 from 2011 when he declared some income as a casual security guard, and received a Newstart allowance when there was no work. Mr S, like many people, was shocked and couldn’t understand the debt. He also, like many other people, did not realise a debt based on Australian Tax Office income data may be higher due to averaging across the period in question. Richard Glenn found most people would not understand the debt calculation process, “nor should they be expected to”. But the OCI system failed to acknowledge or explain that.

Mr S “accepted” the ATO data online, because it was the correct annual figure. When the “debt” remained he questioned Centrelink, which said he needed to provide copies of his payslips. From 2011. Mr S, unsurprisingly, did not have the payslips and his former employer was no longer in business. Centrelink told him it wouldn’t accept bank statements as evidence of weekly pay he received during the period.

The Commonwealth Ombudsman investigated. When Centrelink was obliged to act reasonably, Mr S was found to owe no money. He had correctly reported earnings in 2011. He just had trouble disentangling himself from Centrelink’s guilty unless you can prove yourself innocent system.

When Centrelink was obliged to act reasonably, Mr S was found to owe no money. He had correctly reported earnings in 2011. He just had trouble disentangling himself from Centrelink’s guilty unless you can prove yourself innocent system.

There are other such case studies in Richard Glenn’s report, such as Ms D whose debt was reduced from $2203.24 to $332.21, Mr S’s debt from $3777.43 to zero, Ms H’s debt from $5874.53 to zero, Ms G’s debt from $2914.20 to $610.07 and Ms B’s debt from $1441.64 to $267.51.

Glenn said the Department of Human Services should undertake a comprehensive evaluation of OCI in its current form before expanding it further, and consider how to mitigate the risk of over-recovery of debts. He also recommended the department review every case where a person was hit with a 10 per cent debt recovery fee as well as the “debt”, after finding serious flaws in the department’s methods.

It is almost shocking to read that the department has done no modelling on how many debts were likely to be over-calculated. In other words the department, on our behalf, can’t say how many people might have been ripped off by a system Glenn ultimately found was neither reasonable nor fair.

The “robo-debt” debacle has exposed a department where Joe Hockey’s “lifters and leaners” view of the world took hold, but it’s also exposed how strongly that view has been accepted in large sections of the community.

We fly the flag for Australia as the land of the fair go, but “robo-debt” raises serious questions about how far we’ve strayed from that famous ideal.

This story Land of (no) fair go first appeared on Newcastle Herald.