Wednesday, 27 November 2019
Matters of Public Importance
Pensions and Benefits
I rise to speak on the matter of public importance put forward today. The MPI today says:
The need for the Morrison Government to explain what happens to all those who have been victims of robodebt and what happens to the money obtained improperly by the Commonwealth.
I think that is a very, very important question. The fact is that this government's robodebt scheme has been an absolute failure; in fact, is has been a disaster. It has seen tens of thousands of recipients being overcharged or being alleged to have a debt to the Commonwealth government. This is from a government who has no plans and no vision for the country going forward.
The government has pretended that there is nothing wrong with the scheme, but we know that it has been inaccurate, it's been unfair and it's been so damaging to some of the most vulnerable people in our community. We would all expect that, if there were a genuine debt owed to the Commonwealth, people would repay that debt. But this scheme has been unfair and the system it has used has been dodgy—the effect of which has led to some serious health outcomes; in fact, mental health issues.
We have to consider that, for many Australians who have had to rely on the Commonwealth for some funds, there may have been circumstances where they have become homeless and no longer have their records. And the majority of people in these circumstances wouldn't be keeping their payslips and evidence for seven years. As I said, if there is a genuine debt then we would expect those Australians to repay that. The former Administrative Appeals Tribunal senior member Mr Terry Carney has warned that the alleged debts are in fact unlawful and that income averaging is not a proper basis on which to claim a debt. But does the Commonwealth listen to an expert? Obviously they haven't. And we've seen that displayed by this government through their arrogance on so many occasions.
Remember when we found out that nearly 200 Australians who had passed away had been pursued by this government under the robodebt scheme—and yes, those opposite are willing to go beyond the grave to try to get the money back from those individuals. Senator Kitching—who is in the chair at this moment—asked why the government were applying robodebt to the dead, and the minister, Senator Ruston, answered:
This can occur for a range of reasons, for example, where the department was not aware that the person was deceased, a delay in processing, a manual staff error or a combination of all these matters.
The government has said its standard practice is not to knowingly start an income compliance process on dead people—that's good to know—but it admits that it chased estates and representatives of the deceased customers 515 times, ultimately wiping the debt in 442 of the cases. There have been over 234,000 people attacked by robodebt. That is the number of times since 2016 that the government's alleged robodebts have been wiped or reduced because they were wrong. Chasing people down in this very ad hoc manner has led to undue stress on people and their finances. And we still don't know what the Commonwealth is going to do for those people who have paid a debt that they in fact didn't owe.
I would really like to see this government go back to the drawing board, and perhaps, in hindsight, they might want to ensure that their processes are more transparent—in fact, more accurate—and do whatever is possible to ensure that they're not chasing dead people for money they may or may not owe. As a government, our responsibility is, obviously, to chase down debt that is genuinely owed but also to treat people with some dignity and to remember that we're talking about human beings. As we know, this government have a history of terrorising fellow Australians, particularly Australian workers—as we see in the bill that's before the Senate at the moment. They're also terrorising unions because unions dare to represent working-class people, and we know that the government terrorise people on Newstart by expecting them to live on something that is not even achievable, no matter how good a manager a person might be. If this government were really genuine, they would actually put a stop to these robodebts and they would get their processes right. That's what this government should be doing. It is a matter of priority for the government to re-evaluate the incompetent, unfair and inaccurate process that they are currently using.
Beginning on July 1 this year, Centrelink and the ATO will automatically match data on a daily basis as a way of cross-checking former welfare recipients who have a debt with the Commonwealth.
This is Labor's robodebt scheme.
But let me also remind the chamber that once upon a time Labor and the coalition were on a unity ticket, because where there is debt to the Commonwealth that is debt to taxpayers, and we were on a unity ticket in acknowledging the responsibility of people to repay their debts. The government make absolutely no apology for recovering overpayments in our welfare system. It is the government's legal obligation to pursue the recovery of debt, and we are not ashamed of that. We will continue to ensure that fairness is core to that, and we will also ensure that we get the money that is owed to Australian taxpayers. For over 30 years both sides of this chamber have shared that unity ticket.
The coalition acknowledge that we must look at methods that will give Services Australia the best chance of recovering money that rightfully belongs to the Australian public. Yes, that also includes refining the income compliance program, as was announced by the Minister for Government Services last week. I want to address a lot of the misinformation that we've been hearing. Firstly, the announcement of the Minister for Government Services is not a backtrack. The income compliance program has undergone numerous iterations and refinements since its inception by the Labor government in 2011. We continue to respond to community feedback as we strengthen and improve our debt recovery method to ensure it is robust, and on this occasion we are requiring additional information to identify potential overpayments. No longer will averaging income information from the ATO be sufficient to raise a debt notice, as it once was. The department, once a discrepancy is raised, will review the available information and, should a debt be confirmed, then raise the issue with the recipient. This new approach has already started, as all current debts that have been raised to date using income averaging are being reassessed. Services Australia will contact affected customers after a process that may vary in time depending on the complexity of the individual case.
May I also remind people that our departmental staff are trained to help people experiencing hardship and complex challenges. They are trained to support people and deal sensitively with vulnerable people. With regard to reviewing debt notices, the department cannot commence a review without the customer taking some action. The government encourages people who receive a debt notice to engage with the department promptly should they need a review. Once a review is initiated, our trained staff work with customers throughout the process to obtain necessary information and fulfil their obligations.
As I have alluded to, this whole process started in 2010 when the current member for McMahon said:
It is important that the Government explores different means of debt recovery to ensure that those who have received more money than they are entitled to repay their debt.
To their credit, Labor did explore new measures, and that is how we got the robodebt system that Senator Gallagher wants us to discuss here today. The robodebt system was incorporated, as I said, on 29 June 2011. They said:
Beginning on July 1 this year, Centrelink and the ATO will automatically match data on a daily basis as a way of cross-checking former welfare recipients who have a debt with the Commonwealth.
That is robodebt. I remind you that, when he created robodebt in 2011, the member for Maribyrnong said:
The automation of this process will free up resources and result in more people being referred to the tax garnishee process, retrieving more outstanding debt on behalf of taxpayers.
The Labor government of the time saw the need back then to protect the integrity of the welfare system. The member for Sydney and then Minister for Human Services made this abundantly clear, stating, 'The government has a responsibility to taxpayers to recover that money'—
Now you've made me lose my place. Labor have also said in the past that they want to make sure that people who are receiving welfare to which they're not entitled do not get a leave pass. It seems now Labor have turned their back on income compliance and are advising people to sit on their hands. It is a real shame to see Labor lose the determination to ensure that we recover this money that belongs to the Australian public.
Let me make it clear: this government wants social welfare recipients to get what they are entitled to, and we don't want to revoke welfare, but, where they are paid more than they are entitled to, it is only fair that we recover that money. The lie we hear opposite is that we want to stigmatise people, but that is so far from the truth. What we want and expect is that welfare recipients receive only the correct amount they are entitled to—no more and definitely no less.
I know how important these entitlements are in regional Australia. For example, the farm household allowance is critical to the coalition government's support for those affected by drought, and for such a program to work the community must have trust in its administration. To ensure that we can continue to support those communities and the people in need, we need to make sure that we can recover overpayments so that we continue to have the funds available to run these programs.
It's not just ensuring the success of our welfare system that we need to worry about. This is also talking about the success of all government expenditure that we concern ourselves with. Over $180 billion, or about a third of total annual government expenditure, is spent on our social safety net. Currently, we have social welfare debts totalling $5.3 billion. The more we recover, the more we can spend on the government's program to support our communities through drought, to support our recovery efforts after bushfire and to support our infrastructure programs going forward, and the more we can spend on rural health and mental health services in my regions. That is why it is imperative that the government ensure that money that belongs to the public is returned to the public and used for the public benefit. That is why we are not ashamed of recovering debt.
Just breaking news is that the federal government has lost a significant legal challenge to its automated debt recovery system, known as robodebt, with the Federal Court ruling that the debt was unlawful. Victoria Legal Aid brought forward the challenge on behalf of a 32-year-old woman who had a debt of more than $2,900 raised against her by the Department of Human Services, which is Centrelink. Justice Jennifer Davies ruled that the court could not have been satisfied that the debt was owed in the amount of the alleged debt. She ruled that the Commonwealth must reimburse the client her interest of $92.06 and pay her legal fees. This is one of the cases where the department had miraculously already waived the debt as soon as the legal issue came up, but the Federal Court has ruled that it's not valid; it is unlawful.
This is why the government rushed out a memo last week—which they probably weren't intending to go public, although they must have realised it would—saying, 'We're not going to be using the income-averaging process anymore,' because they know very well that it's unlawful. Just minutes ago, through this chamber, two motions were passed for orders for the production of documents for the government's legal advice, and the government voted no. Is there any wonder why? That legal advice will no doubt show what the court has just found, which is that the debts are unlawful. They're not based on law. I challenge the government to comply with the order for the production of documents that this Senate has just passed. I suspect that will show that all of this process for at least the last three years has been unlawful. I challenge them to prove that they have advice that it was lawful. I doubt that they can do that.
Senator Davey was sent out by the government to defend their approach to robodebt. What did they do? They blamed the opposition for something in 2011. The opposition didn't defend themselves about the process they introduced, but I note that they had human beings doing this. The point is that it was the government that ramped it up. By the way, it was the government that started using the process of income averaging without human beings, and they have known since the Senate inquiry reported in 2017 that there was great dispute over income averaging. The Senate inquiry recommended that they stop doing income averaging. So, even if you want to blame the opposition for robodebt, you are wholly and solely to blame for the process that has been going on where people have been caught up in income averaging for the last three years. You have knowingly done that.
The Senate inquiry said: 'Take a break. Look at this. Improve it.' The No. 1 recommendation was to put a hold on the process until the procedural fairness of these issues was identified. Don't try to blame anybody else. The evidence is there. You're the ones who had the legal advice. You're the ones who not only knowingly continued robodebt but also ramped it up. After the Senate inquiry you continued to ramp it up. If the government didn't have legal advice at the time, surely they should have looked at that and asked for legal advice in light of the findings of the Senate committee.
I point out that there have been hundreds of thousands of these letters sent out. In answer to some questions on notice that I asked about the number of people with vulnerabilities who have received letters about the OIC process, the EIC process and the CUPI process I was told that there were 9,149 letters sent to people who had registered their vulnerabilities with Centrelink. So not only were these letters being sent out generally but they were being sent to people with vulnerabilities who were receiving income support. The value of those debts was $15.4 million. How many people have had their debts waived? Only 288 out of the original over 9,000. I asked how many clients with vulnerabilities had their debts referred to debt collectors—so they get hassled by debt collectors—and was told that there were 1,812.
I sat through a full Senate inquiry—and we're part way through another Senate inquiry—on this issue. I have heard repeated examples of how people felt demonised, stigmatised and vulnerable. They felt like the community were saying that they were cheating the system. I have heard countless examples—not only through the Senate inquiry but through contact with my office, which has been pretty constant since this whole debacle started—of how people have not been able to quickly pick up the phone and talk to Centrelink, and how they have not been able to get the review processes undertaken, which apparently seems so easy now.
Let me go very quickly to the point we are at right now. The government informed people through an email that Centrelink income averaging was no longer going to be used, and there was a very short media conference by the minister afterwards. I'm sure it was very rushed, because that email was leaked, and that takes me back to the point I was making originally: I don't know when the government was going to formally announce this.
There are so many questions now hanging over this process. What are they doing in terms of contacting people about the debts that have already been paid? What are they doing about the people whose debts have been garnished, like the woman who has just had the finding to overturn her debt, indicating it was unlawful? She never knew about the debt; her tax return was garnished. There have been a lot of those examples. How is the government going to handle that? How many people are affected by income averaging? What's the legality of the approach? I've touched on that. How long have the government known that this is likely to be unlawful? They haven't answered that one. What's the process they're going to use to verify the debts? Are they going to go back to the old system, where they used to have a human being actually looking over and contacting employers where there was a discrepancy? Are they going to do that? Over what time frame are they going to get people's bank statements? How many debts are there? What value are these debts? And, very importantly, will this be included in MYEFO in the next couple of weeks? This is going to significantly affect how much money the government thought they were going to rake in from income support recipients who don't owe debts. They've projected a vast amount of money. How is that going to figure in MYEFO? And how many staff are they going to have to take on to correct all this mess? They are going to need a lot of very well skilled people to reach out to people who have been traumatised through this system, who don't necessarily understand the system and who don't think they've had a debt all along.
This system has caused untold damage, pain and suffering to thousands and thousands of Australians. The government knew what was happening. They should've acted a very long time ago to do what they've done now. I think they've made that decision in quite a bit of a rush, because none of these questions—and I have a whole page of them—have been answered. They need to suspend this process right now.
I too rise to speak on the matter of public importance today. No matter what spin the Morrison government put on the most recent changes to the flawed robodebt system, it is an admission of their failure. The government cannot bring themselves to explicitly admit the failure of robodebt, because they've stubbornly stuck by it for more than three years. We had Senator Davey trying to blame the Labor Party. As Senator Siewert so rightly said and as I was interjecting, which I know is not parliamentary—
It is disorderly; I accept that. But when blatant untruths are told about what the Labor Party was doing—we used human beings. We had human beings to help people repay debts that they owed. We did not automate the system, and we certainly did not average the system. There's always a bit of spin on that side, trying to blame us. This is their third term in government, six years, but they still hark back to blaming us.
This government had to be dragged kicking and screaming to admit what all other Australians knew: this system was flawed, unfair and absolutely rotten to the core. Labor does support legitimate action to recover payments to which recipients are not entitled. We've pointed out for years, though, that this automated system is poorly designed, has very limited human oversight, is targeting innocent people and, as we said, is almost certainly illegal. It's beyond belief that this government ever thought it was fair, reasonable or even legal to raise a debt through averaged income from six or seven years ago.
It wasn't fair to demand the recipients of these debt notices pay up at the same time as they were trying to dig up their old receipts or their old records to prove that they don't owe the money. It's quite amazing that the government could expect people to possibly have known that they would have had to keep pay slips that were six or seven years old. The recipients couldn't have known this, because, up until 8 January 2017, the Department of Human Services website recommended keeping pay slips for only six months, and now they're asking people to come up with pay slips from seven years ago. What a joke! After 8 January, the department changed their website to remove the 'six months' reference, but that doesn't make it fair for people. Because the advice on the website changed, it doesn't mean a robodebt notice recipient can simply fish seven years worth of old pay slips out of the rubbish bin.
Adding to the stress of the robodebt victims trying to prove their innocence are the usual struggles, of course, of trying to deal with Centrelink. You can't appeal your debt via the ever-diminishing number of face-to-face staff, which leaves you with the option of lodging an appeal online—although the website has been frequently offline—or trying to get through on one of Centrelink's congested phone lines. Some customers have told us that they've spent up to a year to try to get illegitimate debts reversed while they were also being pursued for those payments.
While the minister has admitted to an error rate of one in five, let's remember that many, many of the victims have simply given up because the process of fighting the debt is too exhausting. A number of victims have gone to all our offices seeking help and advice, but every person who has been helped by my office, by one of my parliamentary colleagues' offices or by a community legal centre or other advocate has found out that they do not owe a debt.
The department's own data released in February reveals that 2,000 people had died after receiving a robodebt notice, including more than 400 aged under 35. The terrible toll robodebt is having on the mental health of its victims is exacerbated by the government's decision to sell robodebt to debt collectors, so people were being harassed and having onerous requirements put on them.
The legal basis for the robodebt system is questionable at best and at worst non-existent, as Senator Siewert said. News on ABC at 3.41 pm said:
The Federal Government has suffered a significant setback in its automated debt recovery system, known as robodebt, with the Federal Court finding that the debt of a plaintiff was unlawful.
There we go: acting in unlawful behaviour. The deep flaws in the system have led one former member of the Administrative Appeals Tribunal, Terry Carney, to describe robodebt as 'extortion'.
Minister Porter, the Attorney-General, has admitted that the robodebt changes were made in light of a class action brought about by Gordon Legal. Every time a court case comes up, they've decided the debt doesn't exist. So this is what's happened. This demonstrates that the government was never confident about the legal basis of the scheme—a fact that is also apparent from the department secretary's failure to outline the legal basis for the scheme in the most recent round of Senate estimates.
What happens to existing victims of robodebt who paid illegitimate debts? How does the government decision impact the budget bottom line? These are some of the questions we need answers to. The victims of robodebt deserve an answer to the first question, and taxpayers deserve an answer to the second. But, so far, the government has refused to answer either. In regard to the first question, Minister Robert has said that changes to income averaging would affect only a 'small cohort' of income support recipients who've already received a debt notice. But DHS staff have been told 600,000 robodebts used income averaging and more than 220,000 of these may require refunds or waivers. That's hardly a 'small cohort', as the minister described it. So what is the actual number? We would like to know. What is the actual number? Is every victim of this flawed and unfair process going to be compensated? Given the government were relying on this scheme to make $2.1 billion in savings, how much debt will they have to pay back, and how will it affect the budget bottom line?
Paying back debts that Centrelink customers do not owe is not the only cost that the government is going to incur in the process of fixing this flawed system. We're also waiting for the government to outline how much it will cost to review customer files to ensure that everyone who has been subject to this extortion racket is repaid. How much will it cost them to change their systems and hire new staff for improved human oversight of the system going forward, as there should have been? It is time for the government to come clean on what this deeply flawed system is going to cost the Australian taxpayer. We already know of the devastating human impact of robodebt. Now let's hear what the impact on the budget is going to be. Minister Robert needs to front the House of Representatives and provide a statement outlining how many robodebt victims will need to have their debts refunded or waived. And the Treasurer, Minister Frydenberg, should also front the House and provide a statement outlining the cost of the government's changes to robodebt and an updated budget forecast which takes into account how these costs will affect the forward estimates. I also call on Senator Ruston and Senator Cormann to do the same in this place. Let's find out once and for all what this colossal policy failure and dysfunctional, unfair and illegal system has cost Australian taxpayers.
Let's start by addressing the elephant in the room, or should I say the 'robot' in the room—because there is no robot issuing debts to welfare recipients. Personally, like many others, I don't appreciate the opposition creating unnecessary anxiety by using highly emotive language around a very personal issue. Debt is not something anyone should be subjected to the trivialisation of.
Let's not forget that the government used to be on a unity ticket with Labor on this point. The member for Maribyrnong and the former opposition leader, Bill Shorten, one of the godparents of income compliance, along with the member for Sydney, said, 'We want to make sure that people aren't receiving welfare to which they're not entitled and no-one gets a leave pass on that.' Let's just reflect on that, shall we? Now Labor's message appears to be, albeit without it going through the shadow cabinet: if you don't engage with the government, you get a leave pass on your debts. The former Leader of the Opposition has also advised Australians who receive a notice from the government to sit on their hands. This sort of reckless politicisation has sown seeds of confusion across the country. The member for Maribyrnong should know better. If one Australian fails to engage with the government and is disadvantaged as a result, that is on his head.
The message this government wants to make very clear is that it is imperative social welfare recipients engage correctly with regard to their circumstances and keep the department up to date so that their welfare entitlements can be correctly calculated. Australians rightly expect welfare recipients to receive the correct amount of support they're entitled to—nothing more, nothing less. Our compliance activity is central to the community having trust in the administration of welfare payments, ensuring the right people get the right money at the right time. We will maintain the government's concerted focus on returning overpayments to taxpayers and balance this with fairness and transparency in our compliance activities.
The point about income compliance I really want to focus on, though, is that there is staff involvement at every stage of the income compliance review process. There are human checks and balances in case selections, so only those most likely to have an overpayment are selected for review. Services Australia have highly trained staff that undertake a review of data that comes in from third parties to check the quality and accuracy of the information before it's used. Staff are responsible for identifying any customers who shouldn't be asked to complete an income review. Staff also have a role in determining whether an individual's reported income discrepancy is likely to result in a debt. Letters sent out to customers reflect decisions of a departmental officer about whether or not they should receive an initiation letter, and the review process doesn't commence without the customer themselves taking some action. This could be the customer receiving their initial notification of a discrepancy through registered mail or myGov, by a customer going online to commence the review process or by a customer phoning the dedicated phone line specified in their letter.
Customers have the choice to go online to complete the review or to undertake the review offline and work with a compliance officer. Staff are available to work with customers throughout the review to help them meet their obligations. This includes staff getting payslips or bank statements for people experiencing difficulty. Even when the online option is chosen, a compliance officer still looks at the outcome before Services Australia finalises the review. Staff are also available to explain the outcome and assist customers who would like a reassessment.
I would also like to bring to the attention of the chamber that Services Australia are not initiating income compliance reviews for people with vulnerability indicators. In the current check and update past income system—better known as CUPI—vulnerability indicators are used as a filter to avoid vulnerable people receiving initiation letters. However, it's important to note that vulnerability indicator status can change and the flag may have been applied to a customer's record after a review was initiated. Departmental staff help people experiencing hardship and complex challenges every day and are trained and supported to deal sensitively with vulnerable people. This can include referrals to social workers. We are also listening to all of our stakeholders involved in the income compliance program to ensure accuracy and access to staff within the department.
Last week the Minister for Government Services announced a further refinement of the income compliance program. This is part of the government's ongoing commitment to continually strengthen and improve the program. The program has already undergone a number of iterations and refinements since its inception, in response to community feedback. These changes will make the program more robust by requiring additional evidence when using income information to identify potential overpayments. This means a debt will no longer be raised where the only information we are relying on is the averaging of ATO income information.
This, however, does not mean that income compliance activities are ceasing. The department will still review payments for discrepancies. In the past the department has asked people to explain discrepancies to them. Under the changes, if someone does not respond to these requests, they will use more information to help them confirm whether they have a debt. For those debts raised to date which the department calculated solely through income averaging, debt recovery will be frozen and the debt will be re-assessed with additional information. Services Australia will contact affected customers as they are identified. This process, though, will take time as individual records are checked, particularly for complex cases. Most of these cases will be ones where people did not fully engage with the department after they were sent the initial discrepancy note. For reviews that are underway, the department will continue to work with customers to complete those reviews.
The federal government spends over $180 billion to support Australia's social safety net—about a third of total annual government expenditure. We are able to support this expenditure through strong economic management. A strong economy enables a strong welfare system. Paying back any form of legal debt is part of our democratic system. This government is ensuring that, in the case of debt through our welfare system— (Time expired)
Well, the time has expired on the misrepresentation of what robodebt is. It has run out of time. It has had multiple iterations over the last three years. It was wrong from the very, very beginning. I rise to speak on this very important issue in this matter of public importance debate, because what's been going on is the issuing of often erroneous discrepancy notices based on a very flawed system that asks current and former welfare recipients for thousands and thousands of dollars of alleged debt. It's such a failed system that, as I said, the government itself has made 'adjustments'—you could euphemistically say. Basically, the government has had to step back from the great shame of what it was it initiated. The government has backflipped on its own position after three years of defending this harsh and unfair robodebt scheme. Labor welcomes the removal of the two defining features of robodebt: the use of unreliable income averaging alone to substantiate a debt, and the outsourcing of the department's work to the customers to provide information to rebut an alleged debt, which we've been calling the reverse onus of proof. This thing was wrong from the very beginning, and a decent government would never have attempted to rip off Australians in the way that this government has, shamefully, done now for three years.
This afternoon, a court has confirmed just how wrong this government got it. Deanna Amato's debt was declared unlawful, because there was no basis in the Social Security Act for this government to raise the debt against her using the faulty income averaging that has been the defence of this government. They said, 'If the ATO uses an averaging system and it doesn't match exactly with the careful figures that were provided to Centrelink, we're just going to send out a debt.'
The bleating apologists on the other side who've said, 'Oh, there's human engagement at every level,' are simply not telling the truth. This is called robodebt for a reason. It's because they outsourced the responsibilities, as they do with so much of the government, to a machine, an algorithm. The consequences have been devastating. There was no basis, according to the court this afternoon, for Deanna Amato's tax return to be garnisheed. When she went to get what she thought was coming to her, it was gone, taken by this government in a manner that has now been declared unlawful. There is no boundary that this government will not cross. If you're down on your luck, they'll come after you. They'll absolutely come after you, not with a Robocop but with robodebt. The court found there was no basis for the 10 per cent interest penalty to be applied to her debt. Of course there wasn't. She shouldn't have got the debt in the first place, let alone an additional 10 per cent on top just for fun. So the government has to pay back the interest to Ms Amato. They have to pay back what they took from her that was not theirs, a debt that was generated by a machine that didn't do the work that good governments should do.
Mr Stuart Robert—the relevant minister for this Liberal-National Party government that is the architect of this scheme, which is exploitative of Australians—has made every effort to diminish the significance of this announcement by claiming that it's a small cohort and that there is no change to the onus of proof, and by reframing this as a 'refinement'—I've got to use the ultimate air quotes around it. It was illegal. Surely the government had enough resources to get correct advice about legality before they went ahead with this scheme. If they didn't, that is a gross failure by this government.
The minister has insisted that Australians wait to be contacted by the department rather than calling Centrelink to find out if they'll have their debt reviewed under the changes. 'Just wait,' he says. Does anybody on that side of the chamber, or anybody in the Liberal and National parties, understand what it's like when you are basically hand to mouth, trying to keep your family fed, clothed and housed, doing the right thing in an economy where your job is very vulnerable and reporting every hour that you work? Then all of a sudden the government sends a letter. It arrives. Probably around dinnertime you open the mail, and there you see it: $13,000 or $2,000 you owe the government. That's what it said. You can change the shape of the letter as much as you like, but, when Australians receive a letter from the government, who they should be able to trust, they rightfully freak out a little bit, especially when they've got to repay money that they had no idea that they owed and that, in fact, they didn't owe. That's what the court case said today: Australians did not owe that money.
It's bad that this has happened, but so irresponsible is this government—so unwilling to accept responsibility for the great shame of its daily failures of governance—that the minister is effectively misleading the public by trying to downplay the government's backflip. Human Services staff have been told that up to 600,000 of the 900,000 robodebts that have been issued used that terribly flawed model of income averaging. Six hundred thousand of 900,000 Australians are going to need a reassessment. God help us if they try to do that again with a machine! And this whole thing came about because the government thought: 'Oh well, we'll just stop the Public Service from doing their proper jobs. We'll just cut a whole lot of them out and use a bit of a machine to send out these notices. Hooray! More money for us, for our budget bottom line.' Now we've got 600,000 Australians who know that they've been ripped off by this government. They've done the very best that they could to comply. They've paid debts that really weren't debts.
And the government has no plan to adequately respond. In fact, they're saying: 'Just sit there and wait. Trust us.' Well, the trust currency has dried up. Every Australian who received a robodebt from this appalling Liberal-National Party government knows that they cannot trust this government. No-one would trust a company that generated a debt for a service you didn't get! No-one would trust a company like that, and they shouldn't trust the government that has done that either. People want refunds. It's a fair thing that they get their refund for a debt that they shouldn't have had to consider at all.
Australians want answers now. They want to know whether people in receipt of a debt notice are going to be guided through a formal review at Centrelink, and the time that that's going to take—how many times they're going to have to sit on the phone for hours. They want to know that they're going to have the best chance to actually have their money. Are they going to get a reassessment? Will everyone who has repaid a debt be alerted of the change? Are they going to be compensated—compensated for the harms inflicted by this scheme?
The Attorney-General, Mr Porter, acknowledged in his National Press Club address last week that the government had in fact received new legal advice in light of the Federal Court actions. And there are a number of questions that absolutely should be answered. Did the government fail to check if robodebt was legal before they actually created this rogue scheme? Did the government receive advice but ignore its own counsel and decide to proceed with unjustly enriching itself at the expense of the most vulnerable in our society—people who'd paid taxes all their life, who just needed a bit of help, and then found this government coming to chase them for a debt that they didn't even owe? Will the Attorney-General now apologise for robodebt? He refused to do so after the 2017 Senate inquiry found that the scheme was destined to fail and should be suspended immediately. Now the scheme has been finally reversed. How can the coalition expect Australians to trust them after they've inflicted this scheme on over a million people—some of them already deceased; some of them experiencing grave suffering because of this very scheme? How can Australians trust this government to look after the most vulnerable in society? They've ignored three years of clear evidence telling them to go back to the drawing board. How can the coalition expect Australians to trust them after they quietly called off their rogue robot only after facing Federal Court action that has proven it illegal?
This is a disastrous government, and it has inflicted great pain on the Australian people. The most vulnerable have suffered at the hands of those in this government, and they should be ashamed of themselves. (Time expired)
I'm pleased to contribute to today's matter of public importance debate in relation to the perceived values of the Centrelink compliance program, but firstly I would like to speak about the income compliance process itself. This process compares the information provided by a person to Centrelink with the income reported to the Australian Taxation Office from paid employment. Based on this information, Centrelink makes an assessment and contacts the individual, alerting them that there may be a discrepancy, if the information received does not align. It should be noted that no debt has been raised at this point. This contact is simply a query from Services Australia asking the person to explain why the income they declared to Centrelink is different from the income declared to the Australian Taxation Office.
It is also important to note: the outcome of every income review is decided by a compliance officer—humans, not robots, have always been involved in this stage of the income compliance process. Minister for Government Services and for the National Disability Insurance Scheme, Stuart Robert, has assured us that at no point while he's been the minister has there been a time when departmental staff were not involved in the process of raising a debt. In around 20 per cent of cases, where a recipient has received such a notice, the discrepancy can be explained through provision of further information such as payslips or bank statements. In other cases, however, there are debts raised. I note that, in cases like these that have then gone on to be formally appealed, less than one per cent of them have actually been overturned.
Once a debt has been confirmed, people have 28 days to either pay the outstanding amount in full or enter into a repayment plan in order to avoid having interest applied to their debt. Services Australia takes into account an individual's financial and personal situation when working out a repayment plan to ensure they do not experience hardship. This is one reason that I and my colleagues have always strongly urged anyone receiving either the initial discrepancy letter or subsequently a debt notice to contact the department on the number indicated on their letter to discuss their personal situation.
The coalition government made a commitment to refine the income compliance program and we remain responsive to community feedback. Refinements have been made a number of times over the past few years, both before and after the Commonwealth Ombudsman's report. We have listened to concerns about the current system, and indeed over recent months I have been at public hearings on this very issue around the country so I understand the implications of this discussion.
Last week the Minister for Government Services announced a further refinement of the income compliance program. These changes will make the program more robust by requiring additional evidence when using income information to identify potential overpayments. This means a debt will no longer be raised where the only information the department is relying on is the averaging of ATO income information.
The government has a responsibility to collect any overpayments. Any fiscally responsible government would be required to do this. Compliance activity will continue for past and future welfare payment recipients where there is a reason to believe they have been overpaid. As outlined earlier by Senator Hughes, in the past the department has asked people to explain discrepancies to them. Under the changes, if someone does not respond to these requests, they will use more information to help them confirm whether or not they have a debt. For those debts raised to date, which the department calculated solely through income averaging, debt recovery will be frozen and the debt will be reassessed with additional information.
Australian taxpayers foot the bill for around $111 billion in social security payments each year and rightly expect those engaged in the welfare system to receive the amount of support for which they are eligible—nothing more and nothing less. We know that those opposite cannot manage money and may think it insensitive or inappropriate to recover overpayments when they occur. However, I agree wholeheartedly with the minister that the government has a legal obligation to raise debts where they exist.
The average Australian expects us to use their funds wisely. They expect the government to ensure that the right people do get the right amount of welfare at the right time. We make no apologies for ensuring we are meeting our legal obligation to the Australian people and we do not stand back from requiring that the correct recipients receive the correct amount of money. If anybody has been overpaid, then they should repay that money. This expectation is a central premise on which the community's trust in the administration of this safety net is based.
The integrity of our welfare system is important and Australians, rightly, expect us to honour that trust. As such, we will maintain the government's dedicated focus on returning overpayments to taxpayers. We balance this requirement with fairness and transparency in our compliance activities. As is their right, people can ask the department to review its decisions or provide additional information at any stage of the process. The Ombudsman found this process indicates a reassessment process that is functioning as it should.
The key message here is that it is the responsibility of those receiving welfare payments to ensure their income is up to date. If there are any changes to income, no matter how seemingly minuscule, the onus is on the individual to keep the department informed. This is the best way to minimise any chance of incurring a debt down the track.
On the matter of the class action that was brought before the Federal Court by income compliance complainants last week, obviously we cannot discuss particulars while this matter is before the court. However, I will reiterate some points the Attorney-General made at the time. He reminded us that the case is an issue that relates to a group of people, the exact number of which is unknown, who were sent a notice to respond to the department. As was explained earlier, this notice was based on data income matching and asked the recipients to explain the discrepancy. These people did not engage with the department.
The legality of the government's income compliance scheme was underpinned by internal advice given to the department at the time it was developed. The advice received and acted on was actually similar to the data-matching advice that was conducted by the Labor Party when it was in government. On the subject of the Labor Party's own record when it comes to income compliance, we have heard several examples earlier today of their support.
The government does not apologise for requiring people receiving welfare payments to pay back money if they have received more than they were entitled to. If the debt assessment has been calculated incorrectly, the department will work with the recipient to rectify the discrepancy. This process is ongoing and may well be refined again over time. It is what the community expects a strong government to do—a strong government that has a track record on strong economic management and providing support to those who need it when they need it. It is a strong economic track record that has delivered tax cuts, is supercharging our record investments in infrastructure and is keeping our budget strong, despite the challenges our economy has been experiencing.