Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Families and Social Services (Senator Ruston) to a question without notice asked by Senator Kitching today relating to the Income Compliance Programme.

I just want to say at the outset that Senator Ruston said that we were on a unity ticket with this government in this space. That is not entirely correct. I suppose she is correct in that no working Australian, no taxpayer, wants anybody to be availing themselves of the welfare system incorrectly or inappropriately. But what has happened in this space is really instructive. There have been two Senate inquiries that have made recommendations in this space: one that Senator Siewert alluded to and one that Senator Kitching alluded to. But I am going to put on the record what the Commonwealth Ombudsman said. The Commonwealth Ombudsman said, 'In the first iteration of the income compliance program, deliberate emphasis was placed on customers providing information, not the department seeking information from employers.' So the system changed.

The system was quite simple. If there was an aberration in the figures, people would be asked to provide information. If they did not provide the information, their employer would be asked to provide the information, and that information would come back to the department. The department would look at the two sets of information, decide whether there was a debt to be raised or not, and, if there was, they would action it. What has happened, clearly, is that a new system has come into place.

The new system started with an interim rollout of a new compliance approach from 1 July 2015. DHS identified 100,000 discrepancy cases for manual assessment. However, this process differed from the previous process in several ways. The first is that it placed greater emphasis on the obligation of customers to provide DHS with current and accurate information about their circumstances, including changes to earnings, and DHS staff would no longer seek this information from employers for the purpose of calculating a debt. So it put all the emphasis on the customer.

I'm sure that there are people on Newstart or welfare payments who keep impeccable records, but I'm also very sure that there are some people in unfortunate circumstances and getting a Newstart payment or a welfare payment who have no records—who have no idea—and who, when confronted with a formal notice from a government department, go into panic mode. They have no idea what to do and, in a lot of cases, they do nothing at all, so the debt is then automatically generated.

This system has been challenged by two Senate committees, and the Commonwealth Ombudsman has made relevant and pertinent observations. Placing the onus on people right down the system, recipients of welfare payments, to prove they don't have a debt could well be not the legal way that this country should operate, and it may be that there are legal moves—outside the parliament, clearly—which have changed the minister's mind. The government will make no apology for it. It was driven off a desire to build their surplus from wherever they could. They just did a robodebt calculation and sent it out.

The intriguing thing for me is: if this robodebt system is so good, why don't they use it to collect superannuation from recalcitrant employers? Why don't they use it to prevent wage theft? The taxation department is getting its 32c, its 18c or its 47c. They know what wages should be paid or what isn't being paid. Why is this robodebt collection model designed to focus on the least able to pay and the most vulnerable people in our community? The answer is: it's what's they do. That's what makes that lot over there different from this lot over here.

We on this side don't set out to have a punitive regime, going down to the most vulnerable in the community, ticking over debt and sending them a notice, knowing full well that they'd have no records. There wouldn't be too many people who've been on Newstart or a welfare payment who would keep seven years of payroll records just on the off chance that Centrelink is going to ask them for a bit of evidence about how much they got. They rely on the system working. The ATO feeds the information to DHS. DHS saw an opportunity to up their revenue collection by—what was it?—two-point-something billion dollars. They are extremely harsh against people who are vulnerable. (Time expired)

Eric Abetz (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Let's be very clear: welfare payments are not payments by the government. These are payments by Australians from their taxes to their fellow Australians who are experiencing tough times. It is, if you like, an expression of those tax-paying Australians to those who are experiencing hard times that they are willing to assist and provide them support in their time of need. With the tax system, we do have situations where people seek to minimise their tax and take advantage. Therefore, we quite rightly pursue those who don't pay enough tax. Similarly, in the welfare system, regrettably, there are those people who seek to manipulate the system and gain moneys to which they are not entitled. There are others who simply make honest mistakes, as occurs with the tax system.

So, we have on the one hand the Australian Taxation Office, which genuinely seeks to recoup taxes that should have been paid, and, on the other hand, welfare agencies that seek to recoup moneys that should not have been paid. That is the motivation behind the so-called robodebts. Once that is understood, the sorts of ugly motives that the Labor Party seek to impute in relation to this are completely unacceptable, without foundation and without fact. This is just an attempt to besmirch the government and besmirch the agencies. Why? Because they don't have a positive agenda of their own to submit to the Australian people.

It makes good sense that we as a government, as the stewards of Australian taxpayers' money, seek to ensure that welfare recipients get that which they deserve and no more. Similarly, as good stewards we seek to ensure that people pay the tax that they are required to pay and no less. This is the balancing act of any good government that seeks to manage the economy for the wellbeing and welfare of all Australians, and so the Australian Labor Party, in coming into this debate as they have, show again how devoid they are of understanding of the way that our system works and seeks to support our fellow Australians.

Has the robodebt system had its faults? Yes, and I've been on the public record, in my home state of Tasmania, indicating some of those faults quite some time ago and assisting people who fell afoul of it. It would be fair to say that it was suboptimal. It could have been done better, but to impute the sorts of motives that the Australian Labor Party have tried to does them no credit and besmirches all those people that put the system together—with some faults. As those faults have come to light, the government quite rightly has reacted and responded to ensure that this system is as fine-tuned and good as possible and is fair to all concerned.

Within this debate you never hear the Australian Labor Party remind our fellow Australians that every single dollar of welfare payments doesn't just materialise out of the sky; it is actually taken by the Australian government out of the pockets of our fellow Australians. That is where the money comes from; therefore it is right and proper that as a government we seek to ensure that only those that are entitled receive welfare payments and that those that accidentally or deliberately are paid too much make the repayment not to the government but to their fellow Australians, because it is actually their money, not the government's money.

We then heard from Senator Gallacher about wage theft. There was a question by one Labor senator about closing down the companies that engage in wage theft. Wouldn't that be a good idea for the ABC, which accidentally underpaid over 2,000 of their workers? The reason I raise this is that people sometimes do make honest mistakes, and you have to take that into account but then ensure that the repayments are made. That is what this is all about, and I support the government's moves.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I put on the record, in response to the tonally very reasonable argument from Senator Abetz on behalf of the government, that he mischaracterises what happens when we get funding for times when we might be unemployed and need some support. There are people who have paid tax all their lives, like Debra, who gave evidence to the committee in Tasmania around very significant issues with the Newstart program. She has worked for 35 years. She has paid her taxes for 35 years. The company went bust. She and many others lost their jobs. Now, after expending all of her life savings, she's on Newstart, but she said that this government is making her feel that she is a burden to this country. A woman who has worked and paid taxes for 35 years is being made to feel, by this government, that she is a burden on society. A young man, Patrick, sitting next to her, said he feels that the Prime Minister has made him feel so unworthy that the only thing that's preventing him from taking desperate action is that he wants to continue for his eight-year-old son. That's the state we've got to in Australia because of this government and the kind of rhetoric that's embedded in this conversation.

What is robodebt? Hopefully, you don't know what it is, but the people who know what it is know what it is in a pretty bad way. It is exactly what Senator Gallacher said. About three years ago this government figured out that it could ramp up a whole lot more income into the coffers of the government if it started sending out notices to people based on information straight out of the ATO. Australians who have a period on Newstart have to fill in forms down to the level of each hour to account for the money they receive. They put in very specific documentation about how much they've worked and how much they're eligible for.

What this government decided to do was change the way things had been done, where reasonable claims like that could be judged against the evidence and information at the ATO and then a government employee, a public servant, would do due diligence. They would go and have a look at the ATO information, have a careful look at the information that was held at Centrelink, make an inquiry of an employer, make an inquiry of a bank and have a look at the whole thing and say: 'No, this person has done a pretty good job of keeping things square. They deserve every cent they've got to keep their family clothed, fed and sheltered, and that's an appropriate spend.' What those opposite said was: 'Oh, well we can get rid of that bit of the process. We can take the public servant out, and what we'll do is we'll make it robotic.' That's where the 'robo' comes from in 'robodebt'. So, if the ATO, which averages everything out, decides that the average doesn't fit with your very specific week-by-week figures—which can amount to two very different numbers—out go the letters.

For the last three years there have been three schemes that have been sending letters out to Australians without any of those checks and balances. It is a disgrace. It disgusts me. At estimates, in a room just up here in another part of the building, I asked, 'How many people have you helped get the records that they need to prove that they don't have this debt?' Because that's what happens now—you've got to prove there is no debt. They say: 'You're a 24-year-old. Get your figures and your paperwork from seven years ago and prove to me, prove to the Australian government, that you don't owe the debt.'

Since the middle of 2016, 600,000 people have got robodebt notices—900,000 for the whole scheme. How many people do you think the public servants have helped to get those documents? One thousand. One thousand Australians out of 900,000 Australians got a little bit of help from this government to get their paperwork together to prove that they didn't have a debt, and that's why we are outraged at this third iteration of this failed system in three years. The government need to be held to account for the shame that they have inflicted on people and the terror that they've put into people's livelihoods and people trying to manage their finances. They are just wrong and have failed. (Time expired)

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

I rise to take note of the answer given in question time. As I said in my first speech earlier this year, we are the party of good government. Of that, there can be no doubt. Good government means good governance. Good governance—

Senator O'Neill interjecting—

I know it's a rare thing for those on the other side, so please continue to have a laugh!

Senator O'Neill interjecting—

Please continue to have a laugh, Senator O'Neill! Just drink your water, please, Senator O'Neill—it would be better for you! Good government means good governance, and that means good stewardship of public moneys—something those on the other side know little about.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Taxpayers' money.

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

Yes, taxpayers' money, and taxpayers foot the bill for $111 billion in social security payments.

Senator O'Neill interjecting—

Is this a debating time, Madam Deputy President, or am I allowed to have the call?

Sue Lines (WA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Van has the right to be heard in silence. I would ask senators to respect that right. Please continue, Senator Van.

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

Thank you, Madam Deputy President. As I said, good stewardship of public moneys is the hallmark of good government, and, as was just raised, Australian taxpayers foot for the bill for around $111 billion in social security payments each year. The citizens of Australia, those taxpayers who contribute all that money, deserve nothing less than to have that money looked after in the best way that this government can. I remind those senators here and those listening that the social security component of the budget is the largest by an enormous amount. We spend more on that than anything else.

Just to correct something that was said opposite, welfare beneficiaries are not a burden to Australia. They are not a burden to Australia. When Australians need it, Australians deserve a hand up, as has been said many times by our Prime Minister. And that's what social security is for. It remains there for Australians who need it to get a hand up, to help them in times of need, to help them through those difficult periods that any Australian can have at some point in their life. We need to reflect on that and why it's there, why we collect so much in taxpayers' funds—to be there as a safety net, and that safety net is there to help them back onto their feet, to help them back into work or to help them get the rest and recuperation they need. It's there to help people. It's not a handout. It's not a wage replacement. So, when there are times—and there are—when there is a miscalculation, the government has a responsibility to collect back any of those overpayments. Compliance activity will continue for past and future welfare payment recipients where there is a reasonable belief—and I reiterate a 'reasonable belief'—that they have been overpaid.

Refinements have been made a number of times to the income compliance program, and the government has an ongoing commitment to refine the program. We remain responsive to community feedback and have listened to the concerns around the current system. That much has been made clear in question time many, many times. We will continue to use income averaging as part of the range of options to ask a welfare recipient to engage with DHS if there is a discrepancy. That's all we're asking them to do here—to engage with the department if there is a discrepancy. This is central to having community trust in the administration of the safety net. I think you will all agree that good government means that government must maintain a concerted focus on returning overpayment to taxpayers. We balance this with fairness and transparency in our compliance activities. People can ask the department to review decisions or to provide new information at any stage of the process, which the government ombudsman reflects as a reassessment process functioning as it should.

Malarndirri McCarthy (NT, Australian Labor Party) Share this | Link to this | Hansard source

The government's robodebt scheme has been an absolute disaster. For years they've been pretending there is nothing wrong with a scheme that has proven to be inaccurate, unfair and incredibly damaging to some of our most vulnerable citizens. The robodebt scheme is a perfect example of this government's heartless approach to governing. Known as 'online compliance intervention', the automated debt recovery system was anticipated to recover up to $4.5 million in welfare debt every single day. It sounds good when you put it that way, if what you're looking at is the budget bottom line. The trouble is, of course, that we're talking about a system that impacts on our most vulnerable citizens—a computer-generated system that delivers automated debt letters to welfare recipients without being checked first by an officer.

The human toll of this robodebt scheme has been enormous. It's a mess. There have been so many terrible stories of the mental and emotional toll the robodebt scheme is having on Australians. It is only after immense and sustained pressure from Labor that the minister has hit the emergency brakes on this scheme—too little, too late and with major questions still remaining. What happens to all those people who've already been victims of robodebt? And what happens to all that money improperly obtained by the government? What happens to that?

The Department of Human Services reportedly believes about 600,000 robodebts have been raised using income averaging and will need to be reassessed. The Northern Territory provides a case in point of the shortcomings of this heartless approach to recovering debt from the most vulnerable. In the Northern Territory, as of December 2018 there were 15,196 residents receiving Newstart payments, 2,255 receiving youth allowance and 9,557 on the age pension. The NT's population of 254,854 is geographically dispersed and has very low population density. Over 50,000 people in the Northern Territory live in remote areas outside of the main urban centres of Darwin, Alice Springs, Tennant Creek, Katherine and Nhulunbuy. There are over 600 homelands and 96 Aboriginal communities right across.

Aboriginal Territorians make up 33.3 per cent of the population, and 49 per cent of Aboriginal Territorians live in rural or remote areas, so the nature of our population in the Territory impacts Centrelink's compliance program as well as the delivery of the agency's services. Remoteness gives rise to challenges regarding access to services, internet, telecommunications and online banking and access to translators or services and resources in language. The reality of robodebt means that, if recipients are cut from payments, connecting back to the correct income support is not straightforward. Delays in accessing payments mean that women and children go without material basics. This means food, with kids going hungry. This means housing, as people are unable to pay their rent.

The government's own data shows that thousands of debts have been generated in error, with approximately one in five debts having been incorrect or waived. How many of these incorrect debts apply to vulnerable people in the Northern Territory? How many debts have simply been paid because people have been unable to provide all the supporting documentation and evidence that's required retrospectively by Centrelink?

The submission from Financial Counselling Australia to the Senate inquiry into Centrelink's compliance program highlights the fact that the government's failure to take extra care with vulnerability makes the debt collection process unsafe and unfair. The FCA recommends that all debt collection processes must be fair and must meet best practice standards, that binding standards are needed to ensure that Centrelink complies with best practice at all times and that there must be a reasonable basis for collecting the debt. It's astounding to consider that this hasn't necessarily been the case. (Time expired)

Question agreed to.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I take note of the answer by Senator Ruston to my question about robodebt and whether the government would now implement recommendation 1 of the 2017 Senate inquiry into the robodebt debacle, which basically said that robodebt should be put on hold until the procedural unfairness issues have been addressed. You would think, from listening to not only the answers from Senator Ruston but also some of the points made during take note, that there is nothing to look at here: 'Don't you worry about that. It was Labor's fault. They were doing something a while ago. But don't forget: there's a whole lot of money spent on welfare'—or what they say is welfare.

I'll just remind the chamber that, when the government talk about 'all of that money spent on welfare', they're talking about assistance to the aged—in other words, the age pension. They're talking about veterans and their dependents. They're talking about people with disabilities, and the NDIS. They're talking about the family tax benefit. The government imply that there are a whole lot of people cheating out there and we're spending a lot of money. But we are rightfully spending money on the people in our community that need it.

The government would have you think that there's no problem with robodebt. 'We've just made a slight change.' Well, they've actually fundamentally agreed now with recommendation 3 of the Senate inquiry, which specifically dealt with income averaging. Recommendation 3 said:

The committee recommends that all people who have had a debt amount determined through the use of income averaging should have their debt amounts re-assessed immediately …

Well, it's 2½ years later—2½ years of more and more Australians, thousands of Australians, who have had debts generated by income-averaging, because that, and reversing the onus of proof, is at the heart of robodebt. This system is fundamentally flawed. Would the government have told us, I wonder, and would Minister Robert have come out and done that short media conference last week, if there had not been leaked emails saying that the process had changed? Perhaps not. Perhaps we would not have found that out for some time. Fortunately, we did.

The government have a lot of unanswered questions. They said there are only a few affected. Well, that's nonsense. We know that income-averaging is at the heart of the robodebt fiasco. Instead of trying to change the name that we were using—that is, 'robodebt'—perhaps the government should have focused on making sure this system was fair and didn't hurt all those Australians who have been hurt. I have sat across the table from a large number of people who have been deeply distressed and traumatised. They felt stigmatised and humiliated that they had been accused of cheating. People were in tears because of the stress of robodebt. I have listened on the phone to people in tears because of the stress of robodebt. I have had innumerable phone calls into my office, because of robodebt, that my staff have handled.

But not only were the government not satisfied that for 2½ years they've been running this program when they must have known that its legality was questioned and that they were hurting people; they have continued to perpetrate this debacle on people. When I asked, 'Would the government apologise?' I did not get an answer. Will they apologise for the hurt and trauma that people are suffering? On top of their issuing of these hundreds of thousands of letters on robodebt, they have now started garnisheeing people's tax returns and family tax benefits for debts that people did not owe. The fact is that the government does not know how many people have been affected by income-averaging.

Will they compensate people for the trauma, distress and hurt they have caused? Will they repay all the money that people have already paid? How many supposed debts have people simply agreed to repay that they do not accept they owe but have just given up fighting with the government about, because Centrelink is so hard to deal with? They've managed to get the debt, perhaps, reduced a little bit, and they've just lost any ability to fight any further. This is a debacle, and it should stop.

Question agreed to.