Investigation Into Former Australian Government’s Unlawful Debt Recovery Scheme Officially Launched

A Medicare and Centrelink office sign is seen in Sydney, Australia, on March 21, 2016. (Matt King/Getty Images)

The Royal Commission has launched a major investigation into an unlawful debt recovery program initiated by the Australian government in 2016 and promised to hold those in charge to account.

On Sept. 27, the commission held an initial public hearing in Brisbane and made brief opening statements on the investigation.

The commission said the first two-week public hearing would occur in October and examine several issues, including the timing of when the unlawful debt recovery scheme became automated.

Commission Chair Catherine Holmes, who is a former Queensland Supreme Court chief justice, said the people overseeing the program would be subject to inquiry.

“Many people at different levels of government will be asked to give an account of their role … with the robodebt scheme,” she said.

“But the focus … will be on those in senior positions, who had or should have had oversight.”

What Is The Robodebt Scheme?

In July 2016, the Australian government’s welfare agency Centrelink launched the Online Compliance Intervention scheme, which was later dubbed “robodebt” by the media, to assess overpayments and issue debt notices to welfare recipients.

The scheme used an automated data-marching system that compared welfare recipients’ reported income with data from the Australian Taxation Office to determine whether they were overpaid.

However, the scheme was later found to falsely accuse welfare recipients of owing money to the government and force them to make repayments.

It was estimated that the scheme wrongfully recovered around $750 million (US$480 million) from 381,000 Australians.

At the time, former Prime Minister Scott Morrison, former minister Alan Tudge, and former Attorney-General Christian Porter oversaw the scheme.

Later, the federal court ruled that the scheme was unlawful in 2019, and the former Coalition government agreed to settle the case with $1.2 billion in 2020.

Victims Urged to Come Forward

Meanwhile, the commissioner has called on the scheme’s victims to come forward with their experiences.

“This was a difficult, stressful time in the lives of thousands of people who were told they had debts to pay,” Holmes said.

“I understand many just won’t want to revisit the experience, but submissions by those who are prepared to describe what happened in their case will be very helpful in establishing the detail and the human impact of what occurred.”

Royal Commission chair Catherine Holmes makes a statement to the media at the Supreme Court in Brisbane, Australia, on Sept. 8, 2015. (AAP Image/Pool, Mark Cranitch)

Speaking to reporters on Sept. 27 morning, Government Services Minister Bill Shorten said the scheme was “Australia’s greatest failure of public administration in social security.”

“It was a scheme which said it was targeted for getting Centrelink cheats to pay what they owed ... the truth of the matter is the scheme was unlawful,” he said.

“Once a machine ... a faulty algorithm asserted a debt was owed, the onus was reversed, and the citizen had to prove why the government was wrong.

“These were David and Goliath struggles.”

The investigation is expected to examine how the scheme was introduced and why federal ministers ignored warning signs during its implementation.

It will also look into the use of external debt collectors and other concerns raised by the public.