Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

I seek leave to move the following motion:

That this House:

(1)acknowledges that Centrelink has, since late 2016, been sending out numerous incorrect notices relating to debt recovery – by its estimation, at least 4,000 of the 20,000 debt notices sent each week are incorrect;

(2)notes the severe financial and emotional toll that the debt recovery system has had on thousands of people, including some of the most vulnerable, with some going so far as to talk of suicide;

(3)notes the many well-documented problems with the system, including:

(a)incorrect debts being raised by a crude data-matching of a person's annual income as reported by the Australian Taxation Office with their fortnightly income reported to Centrelink;

(b)alleged debts having been referred to debt collection agencies in a short amount of time, often when the person has not even been made aware of the alleged debt because they have not received adequate notice from Centrelink;

(c)people being asked for payslips and other proof of income from periods or in circumstances where they could not reasonably be expected to provide such documentation; and

(d)the Department of Human Services often refusing to explain how an alleged debt has been calculated, and in some cases recalculating the alleged debt seemingly at random;

(4)notes that while the Minister for Human Services has indicated that some minor changes will be made, the program remains deeply flawed and must be shut down immediately;

(5)condemns the Minister for not only refusing to admit that there is a problem with the system, but also for insisting that the system will continue to operate despite it incorrectly targeting thousands of innocent Australians and its failure to treat people fairly and humanely; and

(6)calls on the Minister to:

(a)ensure that all Centrelink debt recovery activities are timely and accurate, and are conducted in a fair and humane manner; and

(b)convene, as a matter of urgency, an expert stakeholder roundtable to design a fair and humane system of debt detection and recovery.

Tony Smith (Speaker) Share this | Link to this | Hansard source

Is leave granted?

Christopher Pyne (Sturt, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

Leave is not granted.

Tony Smith (Speaker) Share this | Link to this | Hansard source

Leave is not granted.

Andrew Wilkie (Denison, Independent) Share this | Link to this | Hansard source

I move:

That so much of the standing orders be suspended as would prevent the Member for Denison from moving the following motion immediately—That this House:

(1)acknowledges that Centrelink has, since late 2016, been sending out numerous incorrect notices relating to debt recovery – by its estimation, at least 4,000 of the 20,000 debt notices sent each week are incorrect;

(2)notes the severe financial and emotional toll that the debt recovery system has had on thousands of people, including some of the most vulnerable, with some going so far as to talk of suicide;

(3)notes the many well-documented problems with the system, including:

(a)incorrect debts being raised by a crude data-matching of a person's annual income as reported by the Australian Taxation Office with their fortnightly income reported to Centrelink;

(b)alleged debts having been referred to debt collection agencies in a short amount of time, often when the person has not even been made aware of the alleged debt because they have not received adequate notice from Centrelink;

(c)people being asked for payslips and other proof of income from periods or in circumstances where they could not reasonably be expected to provide such documentation; and

(d)the Department of Human Services often refusing to explain how an alleged debt has been calculated, and in some cases recalculating the alleged debt seemingly at random;

(4)notes that while the Minister for Human Services has indicated that some minor changes will be made, the program remains deeply flawed and must be shut down immediately;

(5)condemns the Minister for not only refusing to admit that there is a problem with the system, but also for insisting that the system will continue to operate despite it incorrectly targeting thousands of innocent Australians and its failure to treat people fairly and humanely; and

(6)calls on the Minister to:

(a)ensure that all Centrelink debt recovery activities are timely and accurate, and are conducted in a fair and humane manner; and

(b)convene, as a matter of urgency, an expert stakeholder roundtable to design a fair and humane system of debt detection and recovery.

I regret that the government chose not to grant me leave to progress this matter immediately, but I hope that the government and the opposition would see the sense in at least, now, suspending standing and sessional orders to allow this matter to be dealt with. I would hope that everyone in this place would understand and would agree that we have a very important duty to look after the most disadvantaged and vulnerable members of our community.

It is not acceptable that we have a debt recovery program now in place and running its course, where by the government's and by Centrelink's own admission, some 20 per cent of the debt notices that are being distributed are wrong. That is simply not acceptable. Something like 20,000 debt notices are being issued by Centrelink each week right now. That means that in the order of 4,000 debt notices are going out each week from Centrelink, and they are wrong. We know they are wrong, and so far the government has nothing to rectify it. There is no way that can be defended—4,000 incorrect debt notices each and every week. And, although this has now been running for a few months, there is no reason to think that it is about to get any better any time soon. This is an ongoing program. In fact, we have good reason to be concerned not only that things are not going to improve but also that they are about to get a whole lot worse, because we know that the program is soon to be expanded to include recipients of the age pension and the disability support pension.

It is not good enough for the government not to allow this matter to be dealt with now. This is a very serious matter and it needs to be dealt with urgently. We cannot wait for the normal processes of this parliament to run their course. This cannot be dealt with next week, next month or next year; it must be dealt with today. In fact, the government today needs to make the decision to axe the program and design a new program that will be timely, accurate and fair. To put a human face to this and to help explain why we must suspend standing orders and deal with this matter right now and not some time down the track it should be noted that real people are being affected by this and being desperately hurt by this as we speak.

Today, as I am standing here now, people are opening their mail and they are seeing that they might owe money to Centrelink. It might be only a few hundred dollars or it might be many tens of thousands of dollars. But it does not matter how much it is, because for some people a few hundred dollars is an enormous amount of money. So I do not want to just focus on some of the outrageous figures that are being contained in some letters. I heard of one women, I think from Queensland, who before Christmas was told that she owed $69,000. For a lot of people in my community and communities right around Australia to get a letter saying that they owe few hundred dollars is a big deal. That is enough to send some people into a complete spin. Numerous people who have contacted my office have talked of self-harm. I know of one particular member of the community who has attempted self-harm as a direct result of receiving a letter from Centrelink alleging that he owed a considerable sum of money which he is quite sure that he does not owe.

This is a flawed system. It is a flawed system that, among other things, is matching two completely unrelated data sets. But the government knows this. In fact, the government says that it expected there to be something like a 20 per cent error rate. The government figures that that is okay and that it would be quite acceptable for those 20 per cent to simply make the case that they do not owe the money. The problem is that, if they cannot make the case that they do not owe the money, they are assumed to be guilty and are forced to repay the money. What on earth happened to the principle of innocent until proven guilty? With this policy, people are guilty until proven innocent. A lot of people cannot prove that they are innocent. I stood with a woman and her two young children at a press conference a few weeks ago. Since 2010, she has held five jobs. Because she received a Centrelink debt notice recently, she is now required to substantiate her income back to 2010. She has had five jobs in that time. One of her former employers is not even business now. She cannot possibly come up with the documentation to prove her innocence, and, because she cannot, she has started to repay the debt—guilty until proven innocent.

This is why we need to deal with this now. I am not waving my arms around and screaming and carrying on; I am trying to make a sensible and reasoned argument here to urge the government and the minister to intervene. It is not good enough to roll out some Centrelink manager; this is a job for the government. The relevant minister should stand up here now and explain himself and explain the government's position. And it will not be good enough to simply say that some minor changes have been made around the margins, because none of the changes that have been made around the margins so far deal with the fundamental problem that some 4,000 incorrect debt notices are being sent out by Centrelink each and every week. And not only will that continue; it will increase as Centrelink turns its attention to age care and the disability pension.

I am grateful that the government has allowed me to at least have this say. I hope that the government will now support the suspension of standing orders so that we can have a decent debate about this and so that we collectively, as representatives of the Australian people, can start the process of getting rid of this flawed system and putting in place an accurate, timely and fair system that recoups the legitimate debts that need to be recouped. Yes, let's go after that money, but let's go after it in a timely manner, in an accurate manner, in a fair manner and in a manner that stops scaring so many good Australians. (Time expired)

Tony Smith (Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

I second the motion. This government are hurting people and this parliament needs to stop them. Over the summer, when most of us were relaxing and spending time with family and friends and winding down, this government were spending time attacking the poorest of the poor and putting them under so much stress that many people were even talking about taking the ultimate step and taking their own life. This is a classic example of when standing orders should be suspended because over the summer it has become apparent that this government, in an attempt to raise revenue, is prepared to oversee a system that tells people to pay money they do not owe and forces people who have very limited resources and who are by definition the ones in our society most in need of a helping hand to prove that they are innocent just because the government has deemed them guilty.

My office has been approached by dozens and dozens of constituents. I know that many other members of this place will have been approached as well by people across the country who ring up in enormous distress, saying, 'I've just received this notice; what do I do?' For many of them, the first time they hear that there is an alleged problem with their Centrelink payments is when they get a call from what is effectively a debt collection agent. The Victorian Council of Social Service has made the point that this is like a debt collection agency ringing you up and saying: 'We've got a note from a video store that back in 2009 you borrowed Flying High. You've got several thousands of dollars in overdue fines owing on it. Unless you can prove that you didn't borrow that video we're going to make you pay and we're going to start taking money away from you.'

This is happening not to people like us here in parliament who might have the wherewithal to defend ourselves. This is happening to people who are trying to get by on all of a few hundred dollars a week. Why is it happening? It is happening because the government has said, 'In order to do things like fund a $50 billion tax cut to the top end of town and to make sure that the likes of Gina Rinehart can buy cheap and subsidised petrol by giving them a tax break, we are prepared to go after those who don't tend to have a spare $10 million or $26 million lying around to run an ad campaign or to donate to political parties. We're going to go after them to balance the books.' It takes courage to stand up to the top end of town and say, 'You have to pay your fair share to help balance the books.' But it is absolute cowardice to turn the machinery of government onto those who are unable to defend themselves. That is what this government has done.

I have heard from an artist who has been repeatedly given misinformation about appropriate ways to report to Centrelink, which has resulted in the issuing of significant debts. In other words, they were told the wrong thing about how to report to Centrelink about their income and all of a sudden they do not get a letter saying, 'Can you please do the right thing?' but they get told, 'You've got to pay a debt.' I have heard from students who have complied with Centrelink and advised of travel periods overseas, only to be issued with debt notices and due dates whilst overseas without any appropriate forums to make contact with Centrelink. I have heard from distressed single parents, some of whom have been issued with debt notices of $45,000. These are people who are already struggling under inadequate Centrelink payments.

The government has a choice about to who to get money from to balance the books and the government has a choice about how to deal with those in our society who are most needing our help. The figure of 20 per cent of incorrect notices going out, I suspect, is an understatement. I suspect we are going to see a lot more than that. When the Senate turns its attention to this in coming days we are going to see in a lot more detail just how bad this system is and just how brutal the government's approach has been. Everyone in this place would accept that if someone is not entitled to something then they should not be paid it under the law. The question is: when there is a grey area, what do you do about it? Do you go headstrong and charge at the most vulnerable in our society and say, 'You have to pay tens of thousands of dollars even though you might not owe it'? Or do you take a more sophisticated approach? We need to do this now because it is hurting people. (Time expired)

Alan Tudge (Aston, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

We will not be supporting this suspension motion. I would like to speak on it and address the points that the member for Denison has raised. The way I will do that will be by stepping back and explaining to the member for Denison and to this House exactly how this process works. It is a process, by the way, which has been around for a very long time.

As has been the practice since 1990, when Labor introduced the Data-matching Program (Assistance and Tax) Act, we check the self-reported income to Centrelink with the income data held at the Australian Taxation Officer. Where there is a discrepancy between those two sets of data an inquiry is made of the recipient as to why there might be a discrepancy. That is not a debt notice, as the member for Denison suggested. The first letter which goes out is stating that a discrepancy has arisen and asks them to please explain why that discrepancy might exist. At all times a person can speak to a Centrelink official in relation to that letter or in relation to any issue which they may raise.

Sometimes people can explain why there is a discrepancy between the two sets of data. It could be, for example, that an employer has incorrectly written the dates of employment in his or her report to the ATO. That enables the recipient to be able to correct that record, and that can be the end of the matter. That occurs, to date, in about 20 per cent of occasions. In about 20 per cent of occasions a person receives the correspondence from Centrelink pointing out a discrepancy and is able to validly explain why there is that discrepancy, and that is the end of the matter. In the other 80 per cent of the cases, there has not been a response or there has not been a valid explanation as to why there might be a discrepancy. In that instance, a debt notice may be given.

I point out, as I said at the get-go, that this has been a practice going back to 1990, when Graham Richardson introduced the data-matching act. It was then actually refined in 2011 when some automation was introduced by none other than Bill Shorten, who is now the Leader of the Opposition, and the person who is now the Deputy Leader of the Opposition. Of course, in our 2015-16 budget we decided to further expand this amount of work to cover more people, and my department has been implementing that initiative since. But at all times the basic methodology of the data checking has been exactly the same.

Why do we have to do this data checking? That is the important question here: why do we have to do this?

Unfortunately, amongst the five million people who at any time might be on income support payments, the vast majority do exactly the right thing, but there are some who deliberately defraud the system and there are others who inadvertently do not update their income details correctly and consequently may have received an overpayment. I would like to give some examples of such people. One such person, in a very stark example, was a Queensland gentleman who was receiving Newstart for all of financial years 2011-12 and 2012-13 and, during the two full years that this man was on Centrelink payments, he had declared less than $5,000 of employment income to Centrelink. However, the Australian Taxation Office data showed that he had in fact earned $100,000 during that time, so consequently the person was given the opportunity to explain, but a debt has been raised against that individual. That was an individual, by the way, who was not picked up by the Labor Party when they were in government, but we have picked it up now, and I think it is quite right that we ask that individual to be able to explain why there is such a stark discrepancy and why they reported $5,000 for those two years but the Australian Taxation Office reported $100,000 for those two years. Another example is another Victorian male who was on Newstart for all of financial years 2010, 2011 and 2012. During that time they declared less than $11,000 of employment income. However, the Australian Taxation Office showed that they had earned more than $65,000 during that time. Again, that had not been picked up in the past, but it has been picked up in this particular example. There are countless examples like this.

I point out that even in the single example, I think, that the member for Denison raised publicly in the media, in a doorstop which he did with a particular individual, we looked at her file—as the member would know, the Social Security Act allows us to correct the record if there has been misinformation—and this person was on a Centrelink payment for the duration of full financial years and during that time declared only a very small amount of income, but the Australian Taxation Office records showed that, in fact, she earned quite a considerable amount of income and consequently a debt has been raised with that individual.

I should point out, by the way, that between Mr Wilkie and the Labor Party there have been some 52 cases put up to the media. Of the 52 cases that have been highlighted in the media, a third were not even related to the system that we are referring to, including, by the way, the example which the member for Denison referred to. This is Department of Human Services information that they have provided to me. The majority of the cases that were part of this system, which has been operational since last July, have also had examination. In fact, in the majority of cases the evidence to date shows that those people also owe money back to the Commonwealth. These are the ones that have been highlighted in the media, let alone the ones that have not been highlighted in the media.

No-one likes to receive a debt notice—no-one likes it; of course they do not—but we have to be fair and reasonable. We have to be reasonable to the recipients of welfare, but we also have to be fair and reasonable to the taxpayers who are working very hard to pay for the welfare system and they expect us to do this checking work to ensure there are not overpayments, which some people have clearly received. How can we be reasonable to recipients? We can do so by not giving them a debt notice straightaway but asking them to validate the information or clarify, and that is exactly what we do. The member for Denison knows we have already put in place some additional refinements to the system and will constantly put in place additional refinements to the system. That includes making the 1800 number more accessible and more easily identified by people so that they can find it. To the member for Melbourne's point, there is always that 1800 number which people can get through quite expediently to talk with an official and be able to address their particular issues.

I should point out also to the member for Denison who has moved this motion that, if people receive a request for information and indeed even if a debt notice is subsequently given to them, having updated some information, they still have multiple opportunities to go back and update their information should they choose to. I am sure the member for Denison would have informed his constituents of that. They can get a reassessment, they can have a review and they can appeal on top of that, so they have additional options available, which I am sure the member for Denison would have informed his constituents about if they felt aggrieved in relation to their particular debt notice.

I stress this point in the last minute which I have available to speak on this particular matter: the system has to be reasonable to the welfare recipient, but it also has to be fair and reasonable to the taxpayer. Today there are workers across the country who are busting their guts and paying their taxes and a significant part of their taxes goes towards supporting the welfare system. I think they are happy to support the people in need, but they want to be sure that the payments are right, that there is not a payment which is an overpayment and that there is not an underpayment. That is exactly what this system is designed to do. Data checking has always been a feature of successive governments going back to 1990. If there is a discrepancy, the individual is asked to explain why there is a discrepancy and if they cannot they are asked to pay back any debt which they may owe. I think that is fair for the taxpayer and I think what we are putting in place is reasonable to the recipient also.

Tony Smith (Speaker) Share this | Link to this | Hansard source

The time allotted for this debate has concluded. The question is that the motion to suspend standing orders be agreed to. I think the noes have it. In accordance with standing order 133, the division is deferred until after the discussion of the matter of public importance. The debate on this item has adjourned. The division will be revisited at 3.30.