Ministerial staffers failed to consider a report which found Robodebt was so "deeply flawed" it should have been "stopped", a royal commission into the illegal scheme has heard.
The royal commission is holding a final block of hearings in Brisbane into the Robodebt scheme, which used income averaging and tax and Centrelink data to calculate social security debts.
During the period Andrew Asten was working as chief of staff to former human services minister Alan Tudge in 2017, media reports had begun to surface about Robodebt.
Mr Asten was grilled on Monday about why he did not ask questions about the lawfulness of the scheme, despite critical reports in the media and reviews being ordered.
He told the Robodebt royal commission he had confidence in "senior public servants" and it was the responsibility of the department to deal with the development of Robodebt.
Mr Asten said the minister's office had responsibility for the "implementation", not the legality in relation to income averaging.
Counsel assisting the royal commission Justin Greggery KC asked: "Did you ever ask yourself: 'How do I reconcile what is being told to the minister by these people with the criticisms which appear in the media such as this'?"
Commissioner Catherine Holmes AC SC later added:
"The implementation had only started a couple of months earlier in full, in September 2016, and it evidently was creating havoc … you had the question of averaging's lawfulness being raised. It seems a pretty fundamental question, 'What permits this to occur?' … and it wasn't asked by you?"
Income averaging 'long-standing'
Mr Asten told the inquiry questions had been raised about income averaging but the department had "clear and full answers" to the question.
He said he was told the concept of income averaging was a "long-standing" practice of the department and it had occurred in "both colours" of governments.
"Well, as I said to another witness, burglary is a longstanding practice, too," Ms Holmes responded.
The inquiry heard reviews of Robodebt had been sought from several organisations to see how its implementation could be improved, including advice firm PricewaterhouseCoopers (PwC) and CSIRO's Data61.
When asked by Mr Greggery, Mr Asten said did not follow up in relation to the final report from PwC.
The inquiry later heard that report had identified "serious flaws in the compliance program".
Mr Greggery suggested the failure to ask for the report indicated Mr Asten did not want to know the scheme was flawed.
"You see, Mr Asten, one view is that you were well aware that the report would describe deep flaws in the scheme implementation as you might characterise them, which really indicated the scheme should be stopped because it was so deeply flawed and you did not want to see it," he said.
Mr Asten rejected this assertion.
Later, former senior policy advisor to then-minister Alan Tudge, Mark Wood, gave evidence he had assisted to brief then-minister Christian Porter ahead of an interview on ABC's 7.30, which was expected to centre around Robodebt.
The inquiry heard Mr Porter was in January 2017 acting as social services minister while Mr Tudge was on holiday.
During that holiday period there was "increased media attention" about the scheme, the inquiry heard.
'I hadn't turned my mind to asking'
Mr Wood told the royal commission he did not ask questions about the legality of the scheme despite being advised by ABC's 7.30 program ahead of the program that the legal question would be raised by Victoria Legal Aid during the interview.
"I hadn't turned my mind into asking that specific question," he said.
Mr Wood told the inquiry with the "benefit of hindsight I probably would have been more specific with getting more depth in answers" when considering whether Robodebt was legal.
"It was made clear to me it was a long-standing practice and rightly or wrongly I did not dig any further," he said.
He said he took advice from the department about the lawfulness of the scheme "in good faith".
Mr Greggery asked Mr Wood: "Was there any point you gained the impression … that the minister was considering pausing the scheme to address the fundamental concerns about legality that had been raised by a number of people?"
"Not that I recall, no".
Mr Wood said he also had not seen a copy of the PwC report.
"Do you recall asking for it?" Mr Greggery said.
Mr Wood said he had "zero recollection" of the report or following up on it "at all".
"I do not remember specifically following it up or asking where it was," he said.
'Lame and unconvincing'
Earlier in the day, Commissioner Homes described legal counsel on Robodebt from government solicitors as: "As lame as an advice could get."
Lisa Carmody, former general counsel at the Department of Human Services' (DHS) commercial law branch, was asked about her work in January 2017, where she and other lawyers prepared "draft legal advice" about the illegal scheme.
The inquiry heard lawyers had been asked to prepare some "dot points" on the issue of Robodebt as negative stories about the scheme were "hitting the media".
Ms Holmes noted the legal advice given made no mention of social security legislation, despite identifying issues with the scheme's legality.
"Look, to put it bluntly, this is about as lame as an advice you could get … isn't it? Do you agree with that as a legal advice it's really unconvincing?" Ms Holmes asked.
Ms Carmody replied: "I agree it's unconvincing. I think it was a note prepared as a wrap-up of some thoughts at the time".
She later conceded she did not remember the purpose of the document and later described it not as "draft legal advice" but a "summary" of conversations from the week in January that she acted in a more senior role at DHS.
Earlier, an email penned by another lawyer involved in the initial advice about Robodebt, Mark Gladman, was shown to the inquiry.
'Weak' argument for scheme's legality
The email included the dot-point document and described the arguments being made to support the legality of the then-Coalition government's large-scale budget-saving measure as "weak".
In his evidence, Mr Gladman said when he was working on the draft legal advice in 2017, he could not find a way to justify the use of income averaging — the central calculation used by the Robodebt scheme to raise debts.
He said he had received the initial draft of the legal advice from another lawyer, who the commission heard has since retired.
Mr Gladman told the inquiry he considered this legal advice before concluding there were some issues with it.
"We had limited detail on what Robodebt involved," he said.
"… the more I looked at our arguments the more I started to question whether that was really an accurate description of what the department was trying to achieve in whatever processes it was doing."
Mr Gladman told the royal commission he had suggested external legal advice be sought from the Australian Government Solicitor (AGS).
He said it was his view external legal advice would be more "objective" and allow people with better expertise to consider the legality of the program.
"I felt the arguments didn't support there was a reasonable basis, based on the material before me ... I didn't feel I could reach the conclusion that there were reasonable arguments to support income averaging but I also felt there were several matters I need to explore," Mr Gladman said earlier.
He also said he believed if a matter would be determined by a court, "they would more likely than not find that the department could not income average".
'I can't recall'
When his superior, Ms Carmody, took the stand, she told the inquiry she had contacted AGS about receiving further legal advice, but she did not explicitly discuss seeking that advice or her thoughts the arguments supporting averaging were "weak" when reporting the issue to former DHS general manager Sue Kruse.
"I believe I would have been keeping Ms Kruse broadly informed, but I can't recall a specific discussion like that," Ms Carmody said.
Counsel assisting the royal commission Angus Scott KC asked Ms Carmody: "Do you think you made it clear to Sue Kruse the extent of the risk to the DHS if external legal advice from AGS was not obtained?"
"I don't recall anything as specific as that … it was reasonably early [in the Robodebt proposal] and it was a small period of time and we were working on the premise we were preparing the draft instructions and had contacted AGS so I think it would have been clear but whether I made it clear, I can't recall," Ms Carmody replied.
The royal commission continues.
