Labor promises public inquiry into ‘Robodebt’ failings if it wins Australian election

By on 04/05/2022 | Updated on 05/05/2022
Australia's shadow minister for government services Bill Shorten speaks on stage at a rally wearing a blue shirt
Bill Shorten has described Robodebt as "the government going to war with its own people". Photo by Matt Hrkac via Flickr

Australia’s opposition Labor Party has said it will call a royal commission to investigate the failings of a debt-calculation system that resulted in more than 400,000 people being chased for inflated or non-existent debts, if it wins the federal election later this month.

The system, dubbed ‘Robodebt’, was used by Centrelink – the agency responsible for making social security payments – to identify people who had been overpaid benefits between 2016 and 2020, when it was scrapped by current prime minister Scott Morrison.

The flawed system calculated people’s income over short periods and assumed that their earnings remained steady throughout the year, leading government to unlawfully demand that claimants pay back non-existent debts or more than was owed.

The scheme has been the subject of considerable controversy with critics saying it exacerbated mental health illnesses in some of the country’s most vulnerable people and may have led to suicides. It has been the subject of an investigation by the Commonwealth Ombudsman, two Senate committee inquiries, and several legal challenges but this is the first time a royal commission has been mooted.

Read more: Australian government was aware ‘Robodebt’ programme unlawful, emails reveal

Labor has said the inquiry would examine who was responsible for the failings and what advice the Malcolm Turnbull-led Coalition government – which was in power at the time the system was designed and implemented – had received during its development.

“Terrible harm was done,” Bill Shorten, shadow minister for government services, said at the weekend. “I have spoken to families who absolutely believe that the pressure of the unfair debt notices raised against loved family members, contributed to them taking their own life.

“I’ve spoken to people in the court action, the class action which Labor helped organise, where people weren’t able to get jobs, where they had the stigma of debts.

“The Robodebt campaign over four years was the government going to war with its own people, and it didn’t have the legal authority.”

He added that Labor had put together the terms of reference for a royal commission and that it would consult on them with a view to “having them in place before Christmas of this year, if we are to be elected”.

Government’s reluctance to admit wrongdoing

The federal government conceded in a landmark court case in 2019 that the system’s failings had led to it raising false debt notices. Prior to that case, it did not acknowledge any wrongdoing and was criticised for downplaying the extent of the problem.

Then government services minister Stuart Robert said a week before the court case that Centrelink would no longer calculate welfare recipients’ debts based solely on averaged income data and that bank statements and pay slips would be used to reconcile welfare recipients’ fortnightly income declared to Centrelink and annual income reported to the Tax Office.

Read more: Australian government to refund 470,000 unlawful welfare debts

He said Centrelink would “reach out” to the “small cohort” of Australians who had received debt notices based only on income averaging, described the change to the system as a “refinement”, and did not admit that mistakes had been made. He said the government made “no apologies for fulfilling our legal obligations to collect debts with income compliance”.

The following year it was revealed in a Senate hearing that civil servants implementing the debt recovery system had received advice that their operations were unlawful. The government agreed during a class action trial in November 2020 to a AUS$1.2bn (US$857m) settlement for Robodebt victims.

Parallels can be drawn between the Robodebt saga and the British Post Office scandal in which more than 700 Post Office employees were wrongly accused of theft, false accounting and fraud between 2000 and 2014 as a result of the failings of the £1bn (US$1.24bn) Horizon computer system.

Accusations against the victims led to criminal convictions, false confessions, imprisonment, defamation, loss of livelihood, bankruptcy, divorce, and suicide. The cases constitute the most widespread miscarriage of justice in British legal history.

MyGov review on the cards

The Labor Party has also said that if elected, it would conduct a user audit of the MyGov website to explore how the online government service portal could be improved in light of problems experienced by citizens during the surge in demand for welfare support during the COVID-19 pandemic.  

The Australian federal election will be held on 21 May. Scott Morrison’s Liberal Party is currently trailing Labor – led by Anthony Albanese – in the polls.

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About Mia Hunt

Mia is a journalist and editor with a background in covering commercial property, having been market reports and supplements editor at trade title Property Week and deputy editor of Shopping Centre magazine, now known as Retail Destination. She has also undertaken freelance work for several publications including the preview magazine of international trade show, MAPIC, and TES Global (formerly the Times Educational Supplement) and has produced a white paper on energy efficiency in business for E.ON. Between 2014 and 2016, she was a member of the Revo Customer Experience Committee and an ACE Awards judge. Mia graduated from Kingston University with a first-class degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.

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