Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Human Services, Senator Ludwig. I note that the community’s confidence in the welfare payment system is based on the community’s belief that the system is fair and that people only receive what they are entitled to. Can the minister please update the Senate on fraud and compliance activities undertaken by Centrelink? Have these activities resulted in any savings?

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank Senator Polley for the excellent question. The Rudd Labor government is committed to giving a helping hand to those people in the community who need it, but we will always be vigilant and stop people ripping off the welfare system. It is clear that the vast majority of Centrelink customers are honest, forthright and helpful and are entitled to the payments they receive. However, the Rudd government will not tolerate people who undermine the Australian welfare system. It is there for those people in genuine need and not for those who just want to help themselves.

During the 2007-08 financial year, Centrelink completed 4.4 million reviews of eligibility and entitlement. The review activity resulted in savings to future outlays totalling $107.2 million a fortnight, with over 700,000 payment corrections, which amounts to $2.8 billion for the year. Centrelink also conducted 9,816 individual cash economy investigations; during the 2007-08 year, that included 190 cash economy operations. This activity resulted in $26.8 million in saving and debts. There were also 43,000 datamatching program reviews undertaken during 2007-08. That resulted in $105.9 million in savings and debts.

From public tip-offs received in 2007-08, Centrelink conducted 60,000-odd reviews of customer entitlements. The review activity resulted in 12,311 reduced payments and identified $148.7 million in savings and debts. In 2007-08, the Commonwealth Director of Public Prosecutions also prosecuted 2,658 Centrelink cases for fraud, with a success rate of 98.7 per cent. Prosecutions send a clear message to the community that the system is fair but will pursue those who try to take advantage of it. These figures clearly demonstrate to potential welfare cheats that they will be caught and will face serious consequences for their actions.

The Rudd Labor government is working hard in this area to ensure not only that people get the right payment and the right amount on time but that there is a compliance program coupled with the payment. This was given a huge boost in the 2008 budget, with an additional $138 million provided to Centrelink for detecting and investigating suspicious claims. These efforts are expected to produce savings of $728 million over the next four years, which is a net dividend of almost $600 million in four years. The budget announcement will mean that Centrelink can carry out extra reviews when it detects discrepancies through data-matching with the Australian Taxation Office. It also means that the government can build on a data exchange pilot between Centrelink and the Commonwealth Bank.

These initiatives send a clear message that the government is serious about making sure the system operates fairly. Centrelink’s success in detecting welfare fraud should also send a clear message to those people who are considering ripping off the system that the community’s support for the welfare system is vital. Successful compliance activities enhance the community’s belief in the integrity of the system. That is why we are serious about combating welfare fraud.