Robodebt inquiry: Govt paid PwC $1m for report never handed down on ‘deeply flawed’ scheme

One of Australia’s biggest consulting firms was paid nearly $1m to audit the controversial robodebt scheme but mysteriously never handed over a report detailing the department’s “deeply flawed” debt recovery program.

One of Australia’s biggest consulting firms was paid nearly $1m to audit the controversial robodebt scheme but mysteriously never handed over a report detailing the department’s “deeply flawed” debt recovery program.

And a senior department manager allegedly told the consultants from PricewaterhouseCoopers (PwC) the government “doesn’t care” what is done to increase debt recovery as long as bureaucrats didn’t do anything “politically silly” as the point was to save “$8bn in fiscal terms”.

The staggering evidence was presented on Friday to the Royal Commission into the unlawful Centrelink recovery scheme, which ran from 2015 to November 2019 and culminated with a $1.8bn settlement to hundreds of thousands of victims.

The inquiry is working to establish how and why the program – which illegally garnished $720m from 380,000 victims – came to be and kept going despite numerous red flags suggesting it was unlawful.

Shane West, Partner PwC, appears before the Royal Commission into the Robodebt Scheme. Picture: NewsWire / Sarah Marshall

PwC partner Shane West, fronting the inquiry, confirmed the company first started working with the Department of Human Services — now Services Australia — in early 2017 after being picked to do an audit into robodebt scheme.

It was during this time Department of Human Services general manager Jason McNamara, according to PwC meeting minutes, allegedly admitted no one in the department comprehensively understood how the compliance program worked.

The documents also indicate Mr McNamara knew a yet-to-be released Ombudsman report would say all aspects of the system were “good”.

Mr McNamara, who has already fronted the inquiry, also allegedly said in meetings with PwC the government had set up robodebt to “save $8bn in fiscal terms” and “doesn’t care what they do with compliance to achieve this” as long as the department didn’t do “something politically silly”.

The contract with PwC, worth nearly $1m, was to look into the department’s current scheme and provide recommendations and included consultants drafting a report detailing how a “redesign” of the robodebt scheme was needed.

Mr West denied a suggestion by Senior Counsel Assisting Justin Greggery KC that the report represented a “damning indictment” of the robodebt scheme, though there was room for “significant improvement”.

The robodebt royal commission continues. Picture: NCA NewsWire / Brenton Edwards

But the 97-page draft report was never finished nor submitted, with the department instead telling PwC it considered a short-form presentation they had delivered to be enough — though neither Mr West nor documents from the time were able to shed light on why, when or who decided this.

Mr West denied a suggestion from Commissioner Catherine Holmes AC SC that this could be seen as though “some sort of a nod and a wink, and ‘don’t give us it thanks’” occurred somewhere along the line.

PwC went on to do about $12m worth of consultancy work for the department over four years, which Mr West confirmed was “triggered” by the initial robodebt audit.

The Royal Commission will next sit on February 20.

Originally published as Robodebt inquiry: Govt paid PwC $1m for report never handed down on ‘deeply flawed’ scheme