Scott Morrison was warned robodebt scheme would require legislative change in 2015

Another day of bombshell evidence at a royal commission has revealed Scott Morrison did not heed an early warning about robodebt.

Scott Morrison was warned robodebt required changes to the law before it was introduced but his department still forged ahead with the illegal program.

A royal commission has heard Department of Human Services officials told the former prime minister in early 2015 the scheme would need policy changes and new legislation around debt collection if it was to go ahead.

Then-social services minister, Mr Morrison oversaw the 2015 launch of an automated income averaging tool which matched welfare recipients’ reported income with data from the Australian Taxation Office.

The program, which became known as “robodebt”, falsely accused people of owing the government money and was disbanded in 2019 after it was found to be unlawful.

The scheme cost the Commonwealth nearly $1.8bn in written-off debts and compensation paid to victims who mounted a class-action lawsuit.

The royal commission into robodebt heard on Wednesday the Department of Social Services had advised the DHS that using income averaging to calculate welfare recipients debts wouldn’t stand up against a legal challenge without legislative change.

The DHS used this information to prepare its own advice for Mr Morrison, which he received in February 2015.

Former DHS secretary Kathryn Campbell, the top bureaucrat who oversaw the creation of robodebt, appeared before the royal commission for a second time on Wednesday.

Scott Morrison was advised the scheme that became known as robodebt would require legislative change. Picture: NCA NewsWire / Gary Ramage

During an at-times tense hearing, Ms Campbell was asked about her role in drafting the executive minute for Mr Morrison in early 2015 that outlined what would become the robodebt scheme.

Ms Campbell rejected a suggestion from senior counsel assisting the commission, Justin Greggery, that she must have known the proposed program was unlawful given she had involved in preparing the minute and no laws were changed.

She said she knew legislative changes were required in order to use an income averaging system but that aspect of the program was the responsibility of the DSS, not her own department.

Ms Campbell said “at some point in time” in early 2015 a decision was made that robodebt didn’t require policy and legislative change.

She said she didn’t know when the advice changed or why.

Ms Campbell also told the commission she didn’t notice a significant potential error in the key document used to secure Commonwealth funding for robodebt.

Ms Campbell approved a costings paper which misrepresented the scheme before it was sent to Treasury in March 2015, less than a month after Mr Morrison had been advised the program would require new laws.

The costings paper asserted the robodebt scheme wouldn’t require changes to legislation.

Former DHS secretary Kathryn Campbell was pressed on whether she knew the robodebt scheme was unlawful. Picture: NCA NewsWire / Gary Ramage

Asked by Mr Greggery why she didn’t notice the change when she signed off on the costings, Ms Campbell said: “I was very busy. I was really looking at the money. I wasn’t looking at the legal requirements.”

Ms Campbell maintained that DHS had tried to get people to engage with Centrelink over their debts, a process which involved people submitting their pay slips.

“We were not able to compel people to engage with us and we were not able to use averaging as a last resort,” she said.

Later in the hearing, Mr Greggery said to Ms Campbell: “You’re not claiming though, that you’re excused from implementing an unlawful system because you didn’t know the law? That’s not an excuse that washes with most people, you can appreciate that.”

Ms Campbell insisted that the advice which said the scheme required new laws had changed before the program was implemented.

The royal commission continues, with Mr Morrison due to appear as a witness next Wednesday.

Mr Morrison is fighting to have confidential cabinet documents he referred to in his submission to the commission to be made public in order to bolster his defence.