Robodebt royal commission told ‘misrepresentation may have made its way into the cabinet’

<span>Photograph: Lukas Coch/AAP</span>
Photograph: Lukas Coch/AAP

Bureaucrats misrepresented the robodebt scheme in cabinet documents prepared for the 2015 budget, apparently paving the way for the unlawful program to be set up, a royal commission has heard.

The inquiry is investigating why and how the unlawful Centrelink debt recovery scheme was established in 2015 and ran until November 2019, ending in a $1.8bn settlement with hundreds of thousands of victims.

The hearings on Wednesday focused on the period in early 2015 when bureaucrats were working up the robodebt proposal for inclusion in the 2015 budget at the behest of then social services minister Scott Morrison.

The inquiry has heard a February 2015 executive minute to Morrison had said the methods used to implement robodebt represented a policy change. It said that based on Department of Social Services advice it could only go ahead if the law was changed.

Related: Federal watchdog refuses to say if it will cooperate with robodebt royal commission

But new evidence aired in the commission on Wednesday showed that as the proposal was progressed, bureaucrats began insisting in documents from March 2015 that the robodebt policies would “not change” how welfare overpayments were calculated.

The new position, described repeatedly as “misleading” by senior counsel assisting the commission, Justin Greggery KC, appeared in costings documents and, crucially, a cabinet submission.

The documents were shown to the former secretary of the Department of Human Services, Kathryn Campbell, who continued to give evidence on Wednesday.

Former human services department secretary Kathryn Campbell.
Former human services department secretary Kathryn Campbell. Photograph: Mick Tsikas/AAP

Asked by Greggery if she was “concerned that misrepresentation may have made its way into the cabinet”, Campbell said she had not picked up the change in language in the costings documents. She could “not explain” it but said she had not authored the document.

She said she had not seen the final cabinet submission and did not know who had changed the language about the program.

Noting Campbell had helped draft the initial brief to Morrison, Greggery asked: “Suddenly things slip through to the point where cabinet is told something which cannot be true?”

Campbell replied: “But I didn’t tell them.” Greggery said: “But someone from your department had involvement in it?”

Campbell accepted this but noted the final cabinet submission was from the Department of Social Services. Campbell has repeatedly said DSS had ultimate responsibility for whether robodebt was implemented without legislation.

“I don’t know who the author of this document was,” Campbell told the royal commission on Wednesday. “I don’t believe it was me. I don’t believe I saw it at the time. And so I can’t explain this document because I have found no evidence that I ever saw this document at that time in 2015.”

She said the final budget submission including the robodebt plan had noted there was no need for legislative change. “[Cabinet ministers] would think that if a department says no to legislation, it means legislation is not required,” she said. “And that’s what they did.”

The human services minister at the time, Marise Payne, who was not in cabinet, is due to front the commission next Tuesday. Morrison is scheduled to appear on Wednesday.

In an earlier exchange on Wednesday, Campbell said:“I wish I had [checked the legality of the scheme] but at that stage [in 2015 when it was developed] I relied on DSS.” She said this was “unwise”.

Greggery replied: “It’s not a matter of wishing or not wishing, it’s a matter of obligation. You ought to have been concerned about it because it was your obligation.”

Campbell said she could not be across every policy proposal, arguing the robodebt plan was not “contentious” at the time and that she was leading a department with 35,000 staff.

At the time of the 2015 budget, there were dozens of measures that involved her department, Campbell said.

Greggery said: “You took a calculated risk in the context of a large volume of work that it would get sorted out?”

Campbell said “calculated risk” was not the way she would describe it but that it was “necessary” to delegate roles to others in a department that large.

Campbell said she had also signed off on budget costings for the department’s administrative costs for running the robodebt scheme without seeing the final policy proposal. This referred to DHS’s staff and IT costs rather than how much money may be recouped in welfare debts.

Greggery suggested she had signed off on those costings “in a vacuum” without seeing what the department was preparing.

Campbell has said she began paying close attention to robodebt when the scheme became controversial in early 2017.

She noted by then there was legal advice from DSS saying the “income averaging” method was legal.

Greggery pointed out that even if the scheme was lawful, the nature of the “income averaging” method meant people could still receive debts that “did not exist”.

He asked: “Didn’t it trouble you that using averaging might lead to the calculation of debts which did not exist in whole or in part, irrespective of the legal advice about their validity?”

Campbell said her focus was ensuring people could engage with the robodebt system. This referred to a process in which welfare recipients provided payslips so their debts were calculated with the best information.

Greggery repeatedly questioned why that was “more important to you than the concern about the prospect that averaging might create debts that didn’t exist?”

Campbell responded that she “didn’t want to use averaging”, and had only done so because legal advice said it could be used.

Campbell will appear again on Friday. The royal commission continues.