The unlawful robodebt scheme was rushed into operation with “little interest” in its legal basis and then covered up with “dishonesty and collusion”, a landmark Royal Commission has found.
According to the report, Coalition ministers misrepresented information to support the scheme, misled the family of a man who committed suicide after receiving a debt notice, and could not have been “rationally satisfied” of the scheme’s legality.
Former Prime minister Scott Morrison presented “untrue” evidence to the commission.
Several unnamed individuals have been referred for civil action and criminal prosecution, in a secretive additional “sealed” chapter that the Albanese government may eventually release.
The final report also raises questions about the ongoing use of data matching and automated decision-making across the Australian Public Service, recommending the government seek legal advice on current practices.
Royal Commissioner Catherine Homes on Friday delivered the damning near-1000 page, three-volume report to the Governor General with 57 recommendations for government.
“It is remarkable how little interest there seems to have been in ensuring the scheme’s legality, how rushed its implementation was, how little thought was given to how it would affect welfare recipients and the lengths to which public servants were prepared to go to oblige ministers on a quest for savings,” Ms Holmes wrote in the final report.
Commissioner Homes extended the reporting deadline by a week so it was delivered this month after the establishment of the National Anti-Corruption Commission, which can take referrals for potential investigations.
Parts of the sealed chapter have also been submitted to Commonwealth agencies, including the National Anti-Corruption Commission, the Australian Public Service Commissioner, and the Federal Police.
Commissioner Holmes has requested the individuals not yet be publicly named to avoid prejudicing any future civil action or criminal investigations.
Robodebt was the Online Compliance Intervention system launched in 2016 by the Coalition government. It used an algorithm to average out a welfare recipient’s yearly income using data from the tax office and cross-matched this with income reported to Centrelink.
If the system found a discrepancy, a “please explain” notice was sent to the individual automatically, with the onus placed on them to prove that the debt didn’t exist. If they didn’t do this, a debt notice was then issued.
The system was found to regularly incorrectly match data and issue inaccurate or false debts. It was later described by a federal court judge as a “massive failure in public administration” and a “shameful chapter” in Australia’s social security history.
The Royal Commission’s final report is also unequivocal.
“Robodebt was a crude and cruel mechanism, neither fair nor legal, and it made many people feel like criminals. In essence, people were traumatised on the off-chance they might owe money. It was a costly failure of public administration, in both human and economic terms,” Commissioner Holmes said.
While put forward as a savings and fraud compliance measure, robodebt had a net economic cost to the Commonwealth of $565 million, according to the Royal Commission.
The Albanese government is now considering the final report’s recommendations for improved policy design, execution, governance, training, resourcing, transparency and oversight to guard against similar incidents.
Among the recommendations is a warning on the use of data matching and exchanges.
The report calls on the government to seek legal advice on whether the current practice among Services Australia and the Tax Office is lawful and to create a “consistent legal framework” for the automation of government services.
The Commission was highly critical of senior Coalition ministers responsible for the scheme over five years.
Former Prime Minister Scott Morrison gave evidence that as Minister for Social Services he was told by public servants that the use of income averaging was an established practice and the “foundational way” in which the department worked.
That claim was not supported by other evidence and deemed by the commission to be “untrue”.
Former Cabinet minister Alan Tudge was also found to have waged a media campaign to “deflect criticism of the scheme and quell negative public comment”. This included his decision that his office release the personal details of a woman who had written a critical opinion piece about her treatment by Centrelink.
“As a minister, Mr Tudge was invested with a significant amount of public power. Mr Tudge’s use of information about social security recipients in the media to distract from and discourage commentary about the scheme’s problems represented an abuse of that power,” the report said.
“It was all the more reprehensible in view of the power imbalance between the minister and the cohort of people upon whom it would reasonably be expected to have the most impact, many of whom were vulnerable and dependent on the department, and its minister, for their livelihood.”
Mr Tudge’s letter to the mother of Rhys Cauzzo, who committed suicide after having a Centrelink debt raised, was also misleading, the commission found.
Mr Cauzzo had a debt raised through a manual process, not the robodebt scheme. Following his death in 2017 and critical media coverage, Mr Tudge ordered his department to conduct an investigation into the circumstances of Mr Cauzzo’s case.
“Consistent with the intent behind Mr Tudge’s request, the investigation was conducted, and conclusions were drawn, on the basis of a superficial examination of procedural and operational compliance by DHS,” Commissioner Holmes found.
But Mr Tudge wrote to Mr Cauzzo’s mother, assuring her “both the department’s and its agent’s interactions with your son were handled appropriately, professionally and sensitively”.
“Those conclusions were wrong and the letter misleading,” the commission said. “The error was not minor, and Mr Cauzzo’s case was not handled appropriately or sensitively.”
The department’s investigation had failed to identify a “vulnerability indicator” ought to have been recorded on Mr Cauzzo’s Centrelink record given he suffered from anxiety and depression and had reported suicidal ideation.
“A vulnerability indicator would have triggered the additional responsibilities for dealing with Mr Cauzzo, including more caution in considering compliance action and taking into account his vulnerabilities in pursuing non-compliance.
Prime Minister Anthony Albanese laid blame for the scheme squarely on the former Coalition government.
“The robodebt scheme was a gross betrayal and a human tragedy,” he said Friday.
“It pursued debt recovery against Australians who in many cases had no debt to pay. It was wrong. It was illegal. It should never have happened, and it should never happen again.
“Under the former Liberal government, this scheme unlawfully raised $1.76 billion in alleged debts against some 526,000 Australians. This tragedy caused stress, anxiety, financial destitution, and sadly had a very real human toll.
“For more than four years, liberal ministers dismissed or ignored the significant concerns that were raised over and over again, including in the Parliament, but also by victims by public servants by community organisations, and, of course, legal experts.”
Mr Albanese said it would be his preference to release the details of individuals included in the sealed chapter for referral to further investigations once those matters had been finalised unless there are legal impediments to doing so.
Commissioner Holmes has also called on politicians to lead a change in social attitudes towards people receiving welfare.
“The evidence before the commission was that fraud in the welfare system was miniscule, but that is not the impression one would get from what ministers responsible for social security payments have said over the years,” she said.
Anti-welfare rhetoric is easy populism, useful for campaign purposes. It is not recent, nor is it confined to one side of politics, as some of the quoted material in this report demonstrates.”
