However cynical the politics and however flawed the legal calculations that saw the Coalition government press “start” on robodebt in 2015, it may be the failure to press “stop” that is most damning.
Some of the most difficult moments explored by a royal commission investigating the scandal have been focused on the years after the apparent bureaucratic omnishambles of 2015.
Another example emerged this week in hearings focused on the conduct of public servants at the departments of social services (DSS) and human services (DHS).
The commission revealed that in March 2019, DHS got legal advice from the Australian government solicitor in response to a federal court legal challenge. It flagged the whole scheme was probably unlawful.
This was another opportunity to press “stop”. Instead, the government wiped the debt at the centre of the legal challenge: no debt, no case. Internal emails noted the DHS’s concern this would generate adverse media and that Victoria Legal Aid might find a new plaintiff. They did.
The decision to plough ahead in Canberra was not academic.
Thousands of kilometres away in Tasmania, Melanie Klieve received a letter in March 2019 telling her she owed $2,573.20. The debt was based on an average of annual ATO pay data for jobs she’d had three years earlier.
Klieve called Centrelink and explained she couldn’t have a debt. The reported income related to jobs she held on Kangaroo Island. She only started receiving Centrelink payments when she’d moved back to Tasmania, later in 2016.
Now Klieve was unemployed and in a poor financial position. Centrelink started deducting money out of her welfare payments. “I had to sell everything I could sell just to get a little bit by,” she told the royal commission by video call this week. “I had to go to the Salvation Army for the first time ever in my life, and it was quite degrading.”
Among the items Klieve sold was her car. She survived on diminished welfare payments until she got a job later in 2019.
This week, Craig Storen, a DHS official, was asked about the AGS’ legal advice from March 2019. He was asked if he understood from that point that income averaging was unlawful.
He replied: “My role at the time was delivering a function in accordance with the government’s policy at the time. There were questions being raised, as you pointed out, and the commonwealth was yet to determine its position on where it wanted to take the delivery of the program.”
The government received further advice from the solicitor general in August 2019. It, too, said the robodebt scheme was unlawful.
The scheme didn’t stop until November 2019.
Klieve’s appearance on Monday provided a constant reference point for distressing evidence that followed throughout the week.
The royal commission heard claims officials at the Department of Human Services (DHS) may have misled cabinet when they outlined robodebt in 2015. Public servants at the Department of Social Services (DSS) could have “manipulated the truth” to a federal watchdog in 2017.
They were only allegations and they will be tested. But they were explosive.
For much of the hearings so far, the bureaucrats at the DSS (the “policy people”) have seemed deeply uncomfortable and, in some cases, openly hostile to the robodebt plan proposed by their colleagues at Human Services in late 2014.
The DSS legal team had torn the proposal to shreds as unlawful. Its policy advisers had tried to knock it over again in January 2015 as not just unlawful, but unfair and not financially credible, not withstanding some apparent “watering down” of their concerns.
The proposal was presented to the then social services minister, Scott Morrison, in February 2015. Some legal concerns were noted in the lengthy brief that also outlined several other policies. Morrison liked the proposal and told officials to work something up for the budget process.
The issue was, though, that the DSS still thought it was unlawful. Legislating was difficult, because the Senate was hostile and there were also potential issues with retrospectivity.
Crucial new evidence provided a possible explanation for how they squared the circle.
The royal commission heard that from March 2015, as the policy was developed further, the DHS began insisting there would be no change to the way debts were calculated under the new debt recovery plan.
This was, according to senior counsel assisting Justin Greggery KC, a “misrepresentation” of the plan that made its way into the final budget submission for ministers to consider.
The DSS had raised concerns about the use of “income averaging”, an unlawful method eventually used to raise debts against hundreds of thousands of victims. The new plans no longer referred to this. DSS concerns apparently fell away, and robodebt was born.
Perhaps those at the DSS had been hoodwinked by the DHS? Certainly, at the lower level, DSS staff had tried to “kill it”, though the actions of more senior DSS staff have come into question.
By 2017, DSS faced a new dilemma. By then, robodebt had captured the public’s attention. The commonwealth ombudsman, which will have to answer for its part in the saga next year, began investigating the scheme.
Catherine Halbert, an occasional acting deputy secretary at the DSS, faced intense questioning about advice she gave to the ombudsman in early 2017.
Relying, she told the commission, on the advice of others, Halbert had passed on information to the ombudsman that was described as “not true” by the commissioner and its top lawyer.
That information said the DSS had come to understand the robodebt plan was legal when it was being developed in 2015.
If that was the case, why did Halbert suggest she and her DSS colleagues were “shocked” and “angry” to later find out “income averaging” was being used in the robodebt scheme in 2017?
Halbert denied trying to mislead the ombudsman. If the letter drafted by a colleague which she’d cleared was not expressed clearly, she took responsibility.
She insisted was not “trying to hide” anything from the ombudsman and had “no skin in the game” to protect the DHS.
The commissioner, Catherine Holmes AC SC, put to Halbert that she and her DSS colleagues were faced with two options when the robodebt issue exploded into public view in early 2017.
“They can be open with the ombudsman and say, ‘This is a surprise to us. We don’t regard it as within the legislation. We told them that at the beginning,’” Holmes said.
“And the other option is to try and come in behind [the] DHS and … find some legal advice, which would provide some possible excuse for this.”
The DSS ended up seeking new legal advice, which gave the green light to the scheme. The ombudsman followed suit.
Next week the royal commission will turn its focus to those at the DHS who worked closely on the plan and to the former Coalition ministers Marise Payne and Scott Morrison.
Morrison’s lawyers this week argued he should have access to secret cabinet documents to make his defence. Given his “reputation was on the line”, Morrison, and the commission, should have access to the best evidence, his lawyer, James Renwick SC, said.
Melanie Klieve, whose 2019 welfare debt was based on unlawful evidence, also reflected on her reputation this week – or at least her sense of self.
“It made me feel … like I was a criminal,” she said of the unlawful debt. “And it made me feel like what I assume a lot of people on Centrelink feel like most of their life.”
Klieve received a refund of $829 in August 2020. “I needed it, desperately needed the money when they were taking it out,” she said.
The royal commission continues.