Scott Morrison’s lawyers say his ‘reputation is on the line’ over robodebt royal commission testimony

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

Lawyers for Scott Morrison have said his reputation is “on the line” as they argued the former prime minister should be able to refer to secret cabinet documents when he gives evidence at the robodebt royal commission.

The inquiry was shown damning evidence on Tuesday that government lawyers warned officials in March 2019 that the robodebt scheme may have to be wound up – eight months before it was finally shut down.

James Renwick SC, counsel for Morrison, asked the commissioner, Catherine Holmes SC, to allow his client to refer to cabinet documents when he appears next week on Wednesday.

Related: Taxpayers to fund legal costs of Scott Morrison and other former ministers related to robodebt royal commission

Renwick said Morrison would not be able to properly defend himself from criticism without the use of such documents – which are generally protected and Holmes has ruled can’t be released.

Morrison was social services minister when the ill-fated robodebt scheme was established in 2015 and the commission has heard he pushed for it to be established. The commission is also exploring the period when the scheme was expanded while he was treasurer and when it faced legal challenges while he was prime minister.

Renwick said reference to specific cabinet documents would make an “enormous difference” to Morrison’s defence because they could demonstrate a “collective decision of government following proper processes rather than the decision of an individual minister”.

Holmes could see some instances where she could possibly reconsider her ruling on documents, but was not convinced this applied to all those that Morrison had referred to in his 46-page statement to the commission.

She didn’t see “why those documents or why this level of detail in relation to the existence of those documents gets anybody any further”.

Renwick replied that was “because his reputation is on the line and he is entitled to answer the notice [from the commission] in a complete fashion”.

He likened the situation to former prime minister Kevin Rudd’s use of cabinet documents during the pink batts royal commission.

Related: ‘You are being misled’: the Centrelink worker who tried to stop robodebt as it started

Renwick was also rebuked by Holmes after he said: “What I’m saying, with all respect, is that an inquiry at this stage, when we put forward the best evidence … I don’t understand why you don’t want it?”

Holmes replied: “You know that’s really not the situation. The situation I have to determine is public interest immunity. I have to consider the public interest in the preservation of confidentiality of cabinet material.”

Renwick withdrew the comment.

The parties, including lawyers for the commonwealth and those assisting the commission, will make further submissions at a future private hearing.

The stoush over cabinet documents came after the commission heard government lawyers warned the scheme might have to be wound up in March 2019 – eight months before it was.

Related: Robodebt: a conspiracy or a stuff up?

The March 2019 draft legal advice from the Australian government solicitor (AGS) was prepared in response to a legal challenge brought by Madeleine Masterton and Victoria Legal Aid (VLA).

The advice said Masterton had very good prospects of success in her case because the “income averaging” method central to robodebt was not consistent with the social security act. The AGS noted while it was commenting on Masterton’s case, it was “conscious it had broader implications”.

The legal advice is one of several warnings the department received – including from internal department lawyers and an external law firm – after the program began in 2015.

But it’s the first piece of advice from the Australian government solicitor provided to the department of human services that identified the scheme was unlawful.

The existence of the advice as early as March 2019 – and the explicit terms in which it warns income averaging was unlawful – raises questions about why the scheme continued for many months.

Related: Labor review says Scott Morrison’s unpopularity ‘single most significant factor’ behind election win

Rather than winding up the scheme or pausing it while the solicitor general’s opinion was sought, the Department of Human Services wiped Masterton’s debt, as Guardian Australia revealed at the time.

Documents show the Department of Human Services had wiped Masterton’s debt because it did not want the federal court to make a determination about the legality of the robodebt scheme.

The decision to wipe Masterton’s debt left VLA with no case, forcing the organisation to find a new plaintiff, which it eventually did.

The commission was also shown emails showing staff from the Commonwealth Ombudsman signed off on a 2018 statement the Department of Human Services provided to its then minister, that cited the watchdog, to defend the robodebt scheme from criticism.

The ombudsman, which gave the green light to robodebt in 2017, has faced continued scrutiny at the royal commission. It is yet to formally agree to cooperate with the commission.

The royal commission continues.