Bureaucrats continue dangerous robodebt ‘techniques’

The excellent robodebt Royal Commission report sets out in great detail the dastardly acts public servants and ministers undertook to pursue pensioners for money they did not owe and to conceal government actions.

While it was clearly a scandal, the real danger for Australia is that both the operating and concealment techniques that were embraced in are currently still in widespread use across the public service and in government activities.

To illustrate, tomorrow I will isolate my candidate for what I believe could be robodebt two.

When, ultimately, the Coalition comes to power, they will call a Royal Commission.

Significantly, none of the major players in robodebt – including the Department of Human Services and the Australian Taxation Office – are involved in the potential robodebt two.

The biggest mistake the robodebt Royal Commission made was not to grasp what sadly has become a new role of the top levels Australian Public Service.

The Commission believed that it was expected that the public servants act “with care and diligence, integrity and importantly, providing the government with advice that is frank and honest”.

Sadly, around 2000, there were additional functions added requiring top public servants to support ministerial policy.

Over time, this has reduced the frank and honest advice role of the public service.

Accordingly, the Royal Commission was stunned by “the lengths to which public servants were prepared to go to oblige ministers on a quest for savings”.

“Truly dismaying was the revelation of dishonesty and collusion to prevent the schemes lack of legal foundation coming to light,” it said.

“Equally disheartening was the ineffectiveness of what one might consider institutional checks and balances – the Commonwealth Ombudsman’s office, the office of Legal Services Coordination, the office of the Australian Information Commissioner and the Administrative Appeals Tribunal – in presenting any hindrance to the schemes continuance”.

Former Human Services Minister Stuart Robert was criticised for making false statements in relation to robodebt. Picture: Glenn Hampson

The essence of the robodebt scheme was that the base for assessing pension/unemployed entitlement would be PAYG information provided by the ATO.

Current and past pension entitlements would be calculated on the basis of ATO data and not what pensioners claimed was their income.

Part of the process involved projecting average incomes over small periods, which naturally produced bizarre results.

The ATO claimed that they had difficulty determining how their material was being used to determine pension entitlements.

But the whole robodebt scheme was a mirror image of the unfair way the ATO operates in Australia.

And so the Department of Human Services wound down its previous labour-intensive methods of checking pensioner claims and embraced the ATO’s much simpler French system of justice whereby pensioners would be told what their past income was and therefore their pension entitlement.

They had to prove the DHS wrong.

Worse still, as with the ATO, when the DHS calculations of amounts owing were sent out it represented a pensioner liability on which exorbitant interest could be charged.

In the Coalition government days the Standing Committee on Tax and Revenue headed by Liberal’s Jason Falinski and the ALP’s Julie Owens declared that the ATO’s use of these practices were unfair to taxpayers.

Just imagine what it must have been like for pensioners and they tried to sort out how on earth the government had calculated their income and entitlements/liability.

Many of the other ATO’s unfair stunts were duplicated by DHS, including going back around five years to maximise the burden for the pensioner/unemployed person who somehow had to prove that the past data was wrong rather than the ATO setting out in detail how the calculations were made.

The DHS enthusiastically embrace the ATO’s practice of putting a garnishee on a person’s bank account to extract payments.

In the case of the ATO a whistleblower showed what the ATO had been saying on garnishee was misleading.

The Coalition government laid charges that required the whistleblower be jailed for term of his natural life for telling the truth.

The current Labor government thought that was too long and has amended the charges so the sentence might be shorter.

A truth-telling whistleblower emerged in robodebt but the minister was able to snow journalists so the whistleblower may have avoided a potential long jail term.

What robodebt showed was that there was no properly set up independent group that a pensioner/unemployed person could go to demand the DHS show how they made the calculation and judge its fairness.

On tax administration, one of the Coalition’s biggest mistakes was not to listen Falinski and Owens.

When Labor came to power, very sadly, Owens was no longer in the parliament, and they let the ATO do to the builders what the DHS had done to pensioners/unemployed.

This was the final straw that smashed big segments of the Australian building industry, which will set back the nation many years.

It’s worth recalling some of the Falinski and Owens’ ATO recommendations and applying them to the DHS;

– An end to the French system of justice: Legislation be introduced to shift the onus of proof to the ATO in relation to allegations of fraud or evasion after a certain period has elapsed.

– An independent appeal process: The Inspector General of Taxation be renamed the Taxpayer Advocate, and that the role aligns more closely with the powers and structure of the US Taxpayer Advocate, “based on the needs of the Australian tax system”.

– That the ATO “ensure” that debts are not payable by the taxpayer until a final determination is made by the relevant dispute body or court

Given the current practices of the public service, this will be a long and hard road.