Robo-debt final week: ‘It served them right, did it?’
In its last week of hearings, the robo-debt royal commission has found the moment when the scheme became an expression of unchecked political desire.
The crucial moment came in a radio interview. Scott Morrison was a month into his portfolio as minister for Social Services when he announced a crackdown on welfare. This set off a chain of events still being resolved today. From the outset, robo-debt was the expression of a political desire.
By 2pm that same day, January 22,
2015, Department of Human Services deputy secretary Malisa Golightly had emailed a link of the full interview to her boss, Kathryn Campbell.
In the witness box at the robo-debt royal commission this week, Campbell agreed Morrison’s statement was “significant” because it indicated the direction he intended to take the portfolio.
Ten days later, the then Human Services minister, Marise Payne, in a meeting with Campbell, made an entry in her notebook that indicated they had discussed this welfare crackdown. Her notes record a decisive observation: “What can we do w/o having to legislate?”
This, perhaps, is the original sin of the debt recovery program known as robo-debt. The desire to go after welfare recipients for “easy” budget savings was to be done without new laws and this absence of new laws would mean the fundamental welfare assessment changes in what would become robo-debt could never be legal.
The Department of Social Services was already aware of an automatic pay-as-yougo (PAYG) “clean-up” proposal that had risen from the bowels of DHS to the most senior people. It had already declared it, with internal legal advice, to be unlawful in late 2014. DSS advised as much in an executive minute that went to Morrison on February 12, 2015, which listed a range of
options. He circled “pursue”. And that was that. Everything that followed this moment can be seen through the light of the panic of highly paid and “responsive” public servants, morphed into political servants by their own considerable ambition, willing to ignore or actively cover-up a program that stalked and tricked vulnerable people by the hundreds of thousands into paying back debts they never owed. Campbell’s evidence is that her deputy, Golightly, and the then DSS deputy secretary, Serena Wilson, must have sorted it out and that she did not become aware of any problems until two years later when she was reassured by DSS legal advice concocted for the purpose of misleading the Commonwealth Ombudsman. It was a DSS program after all, she said, ignoring history. Commissioner Catherine Holmes, already well versed in disbelief at these hearings, expressed more of it. “These were your department’s customers,” she said. “Close to a million interventions were proposed. What was entailed was a retrospective change to the basis of entitlement. “How could you not worry about that? How could you not wonder how this was to be done and whether it would be done?” Campbell repeated a key line of hers, as if it were a prayer: “Commissioner, at that time, I relied on DSS to be responsible for the legislation with respect to the Social Security Act.” Campbell accepted that she knew by January 2017 – when robo-debt had spun up to its full volume of 20,000 letters a week – that income averaging could result in debts that were wrong totally or in part. She says she falsely believed it was being used as a “last resort”. She said people could avoid receiving fake debts if they just updated their information with Centrelink. Commissioner Holmes was blunt: “And if they didn’t contact, it was just – it served them right, did it?” On her third turn in the witness box, Campbell brought a noticeably darker mood and slow-motion delivery to the occasion. Over an agonising period of questioning, she repeatedly asked senior counsel assisting the commission Justin Greggery, KC, to break down the simple proposition he was putting to her: even though she mistakenly thought the scheme was legal
in 2017, she knew it was intrinsically unfair. Her own counsel, Patrick Flynn, SC, attempted to have the question rephrased but was dismissed and a minutes-long battle between Greggery and Campbell ensued. “We will be here a very long time if you don’t answer it,” Greggery said of his question. “And my question is, how did you reconcile that legal advice, that it was lawful to average, with what you knew to be the case in a practical sense, that averaging had the potential to raise debts which were not, in fact, owed?” Campbell offered variations of “I relied on the legal advice”. Greggery, unimpressed, continued. “I don’t doubt it,” he said, “but it doesn’t mean you have to implement a system where you actually know that it might lead to the recovery of money from people who don’t owe a debt.” Eventually, finally, Campbell said: “I didn’t turn my mind to it.” She professed not to recall crucial details and meetings, to being preoccupied with making sure customers “engaged” with the system and of trying to fix it when errors were apparent over that summer of 2016-2017. Her sentences became long and winding, for all the caveats they had to hold. “If, as you are putting to me, that the department sought to mislead, there would have been no – if that was case – and I have never been in a department that has sought to mislead the government, and nor have I ever been involved in an operation that seeks to mislead the government,” she said. “But if that was the case, there would have been no need to have put it in the briefing to Morrison in February.” In the brief that went to morrison, there was a reference to legal advice that said the policy would require legislative changes. By the time a new policy proposal was redrafted and taken to cabinet, however, every mention of the income averaging that would require this legal change was deleted entirely. Like the debts themselves, this administrative trick never existed outside the minds of the public servants who insisted on it. Nothing about the proposal had ever changed. Just the language used to describe it. .” The royal commission has heard of at least two cases where a robo-debt victim has killed themselves after receiving a letter or debt collection notice. There are more. Beyond the loss of life, significant in itself, it is impossible to quantify the harm perpetuated against
ordinary Australians on a massive scale. People lost jobs or family through the devastating spiral caused by financial wounds, their physical and mental health conditions worsened. Others were ground down to nothing while attempting to flee domestic violence. At no stage was it apparent that the people designing the scheme cared enough to imagine what its consequences might be. When, at the direction of either Alan Tudge or Kathryn Campbell, Pricewaterhousecoopers was brought in on a $1 million contract to figure out what was going wrong, the focus was on some $8 billion in budget savings that needed to be achieved. The report arising out of this contracted engagement, according to PWC partners and directors, was iced after a conversation between Kathryn Campbell and her acquaintance and PWC boss Terry Weber. Now, however, the public can see behind the veil. In PWC notes of one meeting, from April 2017, director Frank van Hagen notes that the “narrative” they were given by DHS is mostly around the budget savings and whether they were still doable. After taking into account filters that were then proposed to weed out especially vulnerable people, this did not look at all likely. “Applying these filters leaves only 1500 out of a total of 119,000 (!),” the update says. An exclamation mark clasped by parentheses, like a screaming face, is tremendous shorthand for the scheme. It handily connotes the realisation of what was done, what could not be done and the rising tide of bureaucratic alarm at how officials might keep a lid on the wrongdoing. Despite all of these personal harms committed against real people, there is an effect even harder to define: the loss of faith in institutions that were meant to intervene and did nothing, or that failed. As robo-debt victim Matthew Thompson told the inquiry, there is already little regard for the behaviour of this new breed of senior bureaucrats and the ministers they serve. “I really struggle with the way that politicians talk about people like me who access income support,” he told the commission on March 1. “I am made to feel like a welfare cheat. It makes me feel – I have very little faith in the system. Hearing what politicians say about the issue, it makes me sad and sick.” Robo-debt was a vortex into which many other agencies were pulled.
Losing the most face is the so-called independent Commonwealth Ombudsman. On Wednesday, former acting senior assistant ombudsman Louise Macleod gave evidence that a small investigative team of four people “couldn’t convince” then acting ombudsman Richard Glenn to use their full suite of powers and order significant questions about the legality of the scheme be settled. The inquiry has long heard that the Department of Social Services tried to mislead the ombudsman by withholding the crucial 2014 legal advice that declared the use of income averaging illegal, but it was eventually caught and forced to disclose this advice, alongside wishy-washy 2017 advice from the same lawyer that purported to endorse the practice. On February 24, 2017, one of the investigating team, Amie Meers, wrote to Macleod: “I could drive a truck through the holes in this advice.” Commissioner Holmes went a step further: “You could drive a convoy through that rationalisation, couldn’t you?” Macleod agreed. Greggery picked up the thread. “One reading of this email is that it’s an attempt by DSS officers to explain in a selfserving way why this program was kicked off,” he said to Macleod. “That is, implemented contrary to legal advice that a central element of it was unlawful and without any further legal advice being obtained to contradict it. Do you accept that?” Macleod said, with hindsight, perhaps she did. “As I’ve said in my statement, the team, we had concerns,” she said. “Ultimately, though, it was a decision for the acting ombudsman as to what was put in the report Macleod went so far as to seriously argue for using a cobwebbed provision under the Ombudsman Act that could force income averaging to be considered by the president of the Administrative Appeals Tribunal as was done in a now famous social security case in the late 1970s. She even called the AAT to figure out how it might be done, because the procedures manual at her agency didn’t even mention it. Ultimately, however, this was also not done. Again, the acting ombudsman Richard Glenn decided against it. On Thursday, Glenn said he was “mindful of where the report could be most impactful”, which was, in a very short time frame, trying to fix matters of administration rather than settle questions of law.
Their ministers demanded fealty and got it. They argued that poor people never did anything for the country and then sought to burnish their already fraudulent money management credentials off the misery of those same poor people.
Senior counsel assisting Angus Scott, KC, said starting a scheme like robo-debt against the advice it was unlawful amounted to “maladministration”.
“I think it’s poor practice, I don’t want to reflect on maladministration,” Glenn said. Commissioner Holmes intervened. “Surely it’s maladministration,” she said. “In the absence of other advice, like it was so here?”
Yes, he said. He rejected a claim that his investigation was compromised and not impartial, however.
Macleod, authorised to give evidence on behalf of the Commonwealth Ombudsman, was presented with contextual documents, the draft new policy proposal and departmental emails that were never sent by DHS, to the binding request for all documents in relation to what was called the online compliance intervention at the time.
Some of these she had never seen until shown on the stand.
“It would have been good to see that at the time,” she said when Scott showed her the request for the 2014 DSS legal advice, which confirmed it was essentially the same situation contemplated by the rushed 2017 advice used to hoodwink the ombudsman.
Showing her the document now, Scott asked: “Would you feel misled?”
“I suppose I do,” she said. “Again, it’s another piece of evidence we could have put to the acting ombudsman and said, ‘Here again is another piece of evidence of them not doing the right thing.’ ”
There were many occasions for suspicion, this commission has heard, but none that seemed to materialise into action.
Giving evidence on Monday, former prime minister Malcolm Turnbull said he thought Alan Tudge was getting bad advice on the program.
On January 20, 2017, Turnbull sent a Whatsapp message to Tudge following weeks of criticism – and after demanding Tudge return to Australia from leave to deal with it – that at least hinted at deception.
“Alan, we need a frank assessment of what the problems are and what is happening to fix them,” he said.
“Are you sure your Department is giving you the right advice on what is happening?” What did he mean by that, exactly? “Well, look. I had… Alan Tudge, I always regarded as a technocrat,” Turnbull said. “You know ... he was a management consultant. He had a lot of experience. I didn’t – I didn’t regard him as being a negligent or incompetent or careless minister. I guess I was pressing him, commissioner, to do his job.”
Tudge, who was Human Services minister at the time, told Turnbull something that could not have been true: income averaging was not being used.
“It is a bit surprising, though, that he had made that statement to you, that the averaging wasn’t happening, effectively, and it must have become apparent to you at some stage that it was, that you wouldn’t find that a bit unsettling,” Commissioner Holmes said.
Turnbull said he didn’t have a recollection of those events, beyond the documents.
“I don’t recall being unsettled by that, but I, you know, I may have been,” he said. “My concern was essentially accuracy and fairness. That was what we were trying – that was a concern from me and my office. We hadn’t, didn’t turn our mind to legality or, you know, lawfulness, because we had assumed that that was as it had been represented.”
Represented, he said, in “Scott Morrison’s cab sub” or cabinet submission.
About the same time Turnbull became spooked by the negative press, on January 6, 2017, there was someone else acting in Kathryn Campbell’s role as secretary of DHS while she was on annual leave.
The day Turnbull first messaged Tudge to ask when he would be back in Australia, acting DHS secretary Barry Jackson sent an email to Malisa Golightly: “Did we find out whether the averaging is in the lego [legislation] or the guidelines and, if so, where?”
Elaborating on this, Jackson told the inquiry: “It would probably be every meeting that I went to where the scheme itself was discussed, was words to the effect, ‘This is how we’ve done it always. It’s been done this way for 30 years.’
“And it sort of would come from the likes of Ms Golightly, Ms [Karen] Harfield, Craig Storen and others, who were the principal people involved in delivering the program.
“And I openly admit that when I hear the phrase, ‘We have always done it that way’, it’s normally a red flag to me to ask: Why?”
Jackson set in chain the commissioning of legal advice and the drafting of instructions to the Australian Government Solicitor to settle that exact question. But he was only the acting secretary and his substantive role, as a deputy, did not have carriage of robo-debt.
His stint in the shoes of Kathryn Campbell ended at midnight three days later, on January 9. There was a verbal handover the next day, when Campbell returned and where Jackson mentioned “that I had raised the question about the basis for the averaging”.
Both the draft legal advice and the instructions to seek the opinion of the Australian Government Solicitor were never sent. Who had the authority to pull those?
“To actually withdraw the request – that’s an interesting question,” Jackson said.
“I don’t think I could actually directly answer that. But I would be surprised anyone other than the secretary themselves could withdraw that request.”
Campbell, for her part, says she cannot remember any handover. She says these draft documents were never brought to her attention. Her chief counsel, Annette Musolino, says she also never saw the advice, despite it being emailed to her office.
“Okay,” Commissioner Holmes said, beginning one of her sharp summings-up. “One view of things is, going back to 2015, that in order to oblige the two ministers involved, DHS removed references to averaging and substituted the fiction that there had been no change in what was being done so that DSS then would no longer press for legislation.
You appreciate that that’s an available interpretation?”
Campbell said she appreciated it but didn’t agree.
In language Campbell might prefer, this customer has now been given an opportunity to respond to the discrepancy. This week was the final in the robo-debt hearings and the record has been updated.
It is difficult to attach a coda to a years-long abuse that will linger for decades in the minds of welfare recipients past and present. If this inquiry does nothing else, it has furnished the bones of the worst abuse of Australian citizens committed deliberately and with legal and personal impunity over five years.
There were multiple moments where documents were wilfully disappeared or left in the apparently inert state of “draft”; where ignorance was installed as a default operating system; where dozens of public servants from the middle ranks all the way to the top either knew or should have known, who, in their commitment to each other but not the people who suffered under their arrogance, sought to cover up an extraordinary act of cruelty.
Their ministers demanded fealty and got it. They argued that poor people never did anything for the country and then sought to burnish their already fraudulent money management credentials off the misery of those same poor people. What has been examined only slightly in this inquiry is an inconvenient fact: even if it were legal, robodebt would still have killed people. It would still have crushed people.
Robo-debt’s architects didn’t even have the faux-decency to try for legal justification: they had long since given up the moral argument.
Whatever Commissioner Holmes finds in her final report, due in June, the key witnesses will have been provided with more procedural fairness and due consideration of law than any of the 460,000 robo-debt customers were ever given.
Justice, like income, is also uneven.