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Senate committee calls for royal commission into robodebt scandal

By Luke Henriques-Gomes Social affairs and inequality editor
Nathan Kearney received two robodebt notices, which forced him to move back in with his parents for two years. A Senate inquiry has called for a royal commission into the scheme.
Nathan Kearney received two robodebt notices, which forced him to move back in with his parents for two years. A Senate inquiry has called for a royal commission into the scheme. Photograph: David Kelly/The Guardian

A Senate committee has called for a royal commission into the robodebt scandal, accusing the government and its departments of the “deliberate withholding” of information about the botched scheme.

The Labor-Greens majority committee, chaired by the Greens’ Janet Rice, found the Centrelink debt recovery program it said was announced by Scott Morrison in 2015 had “indiscriminately targeted some of Australia’s most vulnerable people”.

“It caused significant and widespread harm to their psychological and financial wellbeing,” the inquiry report said, adding that at least two suicides had occurred among people caught up in what is officially known as the income compliance program.

The call was rejected by Coalition senators on the committee who claim a royal commission would “only promote anxiety and undermine trust in Government services”.

In March 2020, Guardian Australia broke the news that the government had privately conceded the mammoth, years-long welfare crackdown was unlawful and it would need to pay back hundreds of millions of dollars.

Two months later the government publicly announced the backdown, before settling in court a year later for $1.8bn, which included the owed interest on the debts unlawfully issued to 443,000 people.

The move came only after court challenges were filed by Victoria Legal Aid and then Gordon Legal in a class action created with the support of Labor’s Bill Shorten that was mocked by the government at the time.

Welfare recipients, advocates and grassroots campaigners, such as the NotMyDebt group, raised the alarm about the scheme as early as 2016. Despite the settlement, those groups, as well as Labor, the Greens and other crossbenchers have long maintained there has been no transparency about how the scheme came to be developed, nor what the government knew about its legality. No ministers or public servants lost their job after the scandal.

Rice, who took over from Greens’ Rachel Siewert as the chair of the committee, said the report showed how “devastating the robodebt scheme was for hundreds of thousands of people”.

“This tremendous hurt and trauma could have been avoided,” she said in a statement.

Some victims reported experiencing depression and anxiety as they dealt with the stress of suddenly owing the government thousands of dollars in debts later found to be unlawful, with some pursued incessantly by private debt collectors until they paid up or having had their tax returns garnisheed without warning. One victim, Nathan Kearney, told Guardian Australia he moved back with his parents to country Victoria and worked 50 hours a week in a job he didn’t like to repay $6,500.

Rice claimed Morrison was the “architect of this horrific program”. “He drew up the blueprints when he was the Minister for Social Services, oversaw its expansion as the treasurer and continued it as prime minister until the courts found it unlawful,” he said.

“Scott Morrison and his ministers still haven’t explained when they first learned robodebt was illegal, and why they continued until the courts stopped them, despite the clear evidence of the harm they were inflicting.”

Morrison has never explained his role in the creation of the scheme, but apologised on behalf of the government for “any hurt or harm” caused by the scheme in comments to parliament in June 2020.

Asked about a Labor promise for a royal commission re-announced during the campaign, Morrison said last month he believed the matter had already been “addressed”.

“There have been numerous inquiries into this and there’s been court matters which we’ve fully cooperated in, and almost $750m in response to that,” he said.

“And the changes in the scheme have been in place.”

But the Senate committee said its attempts to enquire into the scheme’s origins and development had been blocked by Morrison government.

“The committee met with entrenched resistance and opacity to its request for information from government ministers and departments, severely hindering its ability to produce this report for the Senate,” it said.

The committee said it had requested documents including briefings provided to the government during the scheme’s operation, any legal advice, the legal costs attributed to the program and a February 2015 executive minute to the then social services minister, Scott Morrison, that proposed a “new online approach to compliance”.

The government has blocked those requests, saying the documents were cabinet-in-confidence or subject to legal professional privilege and that their release would be contrary to the public interest.

In a dissenting report, Coalition senators Wendy Askew and Hollie Hughes said there was no need for an royal commission because the issue had “subject to extensive scrutiny including from the Commonwealth Ombudsman, through parliamentary inquiries and has also been subject to decisions of the federal court”.

They also claimed “another review on the Income Compliance Program will only promote anxiety and undermine trust in government services on the basis of issues that have been acknowledged and comprehensively addressed”.

“To date, over 99% of refunds have been made and approximately 429,000 people have received a refund or had their debts reduced to zero,” they said.

Those on Centrelink payments are required to report their income on a fortnightly basis so their benefits are paid at the correct rate. The robodebt scheme sent debt letters to past and present welfare recipients, mostly students and jobseekers, accusing them of underreporting their income.

It used a process known as “income averaging”, which used annual tax office data to estimate a person’s fortnightly income.

While the calculations were often wildly inaccurate, victims were then required to provide old payslips or bank statements dating back up to seven years to demonstrate they had not been overpaid.

The government is said to have ignored at least 76 administrative appeals tribunal decisions questioning the scheme’s legality, starting in January 2017.

The Senate inquiry report, titled Accountability and justice: Why we need a Royal Commission into Robodebt, includes testimony from victims who gave evidence to the inquiry.

“I really lost my trust in the government,” said witness Belinda Cole. “This is you, as an individual, fighting the commonwealth of Australia.”

Another victim, who give evidence without being named, said they felt “dejected, beaten, stomped on” and “dehumanised”.

“I just paid the full amount to get it over and done with,” they said. “I was done with fighting because I knew I was dealing with Centrelink.”

Another said: “I was literally crushed. I was in shock. I walked around my house trying to deny the reality of what had happened. I was confused as to how I owed this amount of money. Within weeks I began receiving calls, texts and letters from a debt collection agency. I was told that Centrelink had the power to garnish my wages and keep my tax return. I was so ashamed at the time that I didn’t know who to talk to about this.”

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Dive Deeper:
Calls for royal commission into robodebt
A Senate committee has recommended a royal commission into the government's controversial robodebt scheme.
A failure as shameful as robodebt leaves questions only a royal commission can examine
Without an understanding of how this unlawful scheme occurred, what’s to stop something similar happening again?
The Hunger Games created by NDIS algorithms
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