Many of the federal government’s recent efforts to glean savings from the welfare budget were ineffective and failed to fully achieve their goals, an audit has found.
The auditor general, Grant Hehir, looked at seven compliance or fraud prevention initiatives, announced in budgets between 2012-13 and 2015–16.
The measures were designed to save $2.1bn from the budget bottom line, the Australian National Audit Office said.
Four of the measures did not achieve their savings targets, Hehir found in a report released on Tuesday.
Hehir also found the oversight and administration of the initiatives was flawed, and that the Department of Human Services was not effectively monitoring or reporting on the level of debt being recovered.
“[In] the Department of Human Services’ advice to its minister on implementation progress, the department used a methodology that did not provide reliable advice on the ... savings achieved from the measures,” Hehir found.
“The Department of Human Services also does not have the systems or processes in place to provide advice on the underlying cash savings realised, including debts recovered from the majority of the compliance measures – a key outcome expected from the measures.”
The federal government disputed the report’s central finding that its budget measures had failed to achieve the target savings. It said it had saved $1.44bn against a target of $1.07bn.
The human services minister, Alan Tudge, issued a statement agreeing to the auditor general’s recommendations. He said the ANAO’s finding that the initiatives did not meet their savings targets were due to its use of “a different accounting methodology”.
“Across all fraud and compliance activities, the commonwealth realised $3.9bn in savings since 2012, with the 10 measures delivering savings of $1.44bn against a target of $1.07bn, exceeding the target by 35%,” Tudge said.
“However, in its audit, the ANAO used a different accounting methodology which resulted in savings being allocated to different categories compared to DHS’s approach. On the basis of its accounting methodology, the ANAO concluded that some of the seven audited compliance activities did not meet all their targets,” he said.
One of the measures audited was a 2015-16 budget initiative, titled “strengthening the integrity of welfare payments”. That initiative increased the automation of employment income data-matching, and began examining discrepancies from as far back as 2010.
This was extended significantly in the 2016-17 budget, creating the “robo debt” system that is now under serious and sustained criticism for unfairly lumping vulnerable Australians with debts.
Hehir found that the 2015-16 measure had achieved its target savings and was effective. It did not look at measures announced in the 2016-17 budget.
The shadow human services minister, Linda Burney, said the report showed the department was a “complete mess”, but said it did not examine the current debt recovery system.
Burney said the audit found flawed management agreements between the Department of Social Services and Department of Human Services meant “the right hand has no idea what the left is doing”.
“The dysfunction in the department comes as the minister continues to face criticism for his error-prone robo-debt system and his decision to leak confidential information about those citizens who speak out against him,” she said.
“These are the compliance measures which haven’t even faced the most public criticism – what will an audit of the robo-debt scheme find?”
