The Robodebt Royal Commission Starts Today: Let the Blame Game Begin

Today, in Australia, a Royal Commission into the now-defunct scheme Robodebt Scheme gets underway. Here, Jacob Priergaard (@JPriergaard) discusses the failure of the scheme, and the policy decisions over three decades of seeking to cut spending on social security that led up to it.

The Robodebt Royal Commission must tackle the vast punishment machine of Centrelink that goes well beyond Robodebt. As the Royal Commission begins its first substantive public hearings today, one of the focal points for Commissioner Catherine Holmes will be the role of persons in positions of seniority in the design of the scheme. But merely holding those responsible for this most recent policy fiasco to account will not stop the next Robodebt. This was not simply a case of bad people making bad decisions, this was the result of 30 years of broken policy. 

While Robodebt was a policy failure worthy of a Royal Commission, it is not a one-off idea invented by an evil bureaucrat. The type of data-matching in Robodebt has been going on since 1991 and increasing in size for decades. Robodebt began as part of the 2015-16 Budget Measure ‘Enhanced Welfare Payment Integrity’. It was intended to ‘repair’ the budget by saving $1.7 billion over five years through ‘improved automation and targeted strategies for fraud prevention in areas of high risk’. That area of high risk turned out to be people who might have been given too much money by Centrelink years earlier. But while certain processes in this scheme were new (reversing the onus of proof, for example), this was only one of many forms of data-matching in the name of ‘payment integrity’ already undertaken by Services Australia.

During the various inquiries into Robodebt, Services Australia defended themselves by saying this was about ‘protecting the integrity of the welfare system’. The framing as being about integrity and protection raises the question; whose integrity do these programs actually protect? The answer should be vulnerable Australians who rely on Centrelink to stay out of poverty. But the real answer is far less noble – it is, and long has been, about protecting the budget bottom line in the short term, with the poor and vulnerable becoming the victims of the technocratic administration of budgets.

Back in black: The process of balanced budgets

To understand how such a disastrous scheme was allowed to happen requires a closer look at where Robodebt fits in the wider policy and budget context. In the push for balanced budgets, Governments of the last 30 years have repeatedly sought to cut spending. As the largest single category of spending in the national budget, accounting for about 35 per cent of the budget per year, Social Security is a regular target for savings. But because directly cutting services or payments are usually unpopular, Governments have typically gone about finding savings through less visible means. There are three main methods that predominate, with each being added to incrementally in the annual search for new savings.  

First, there is the challenge of getting on to a payment in the first place. As anyone who has entered a Centrelink office and attempted to fill in paperwork and confirm their identity is aware, this is a difficult task and that is not an accident. In academic terms, this is called ‘administrative burden’ and is a way to discourage people from claiming payments they are entitled to by making it deliberately or accidently hard. The more complex the application, the greater the deterrence and the more likely a mistake will be made that might be picked up later (in a data-matching program for example).  

Second, is the approach of sanctioning, which currently operates through a privately-run demerit system. The new Workforce Australia scheme forces people who are on unemployment payments to be managed by private job agencies while searching for work. Private job agencies can suspend or cancel payments if the recipient fails to meet their many conditions. The rate and inconsistency of these sanctions has been a topic of widespread concern among welfare advocates. Originally, sanctions were used to encourage people to engage with Government job services. They are now more commonly used to punish perceived poor behaviour. These types of sanctions are so common and damaging to recipients that studies show they actually decrease the likelihood of a person finding work. They do, however, reduce the overall number of recipients at a given time.

Third, is what Services Australia calls fraud control and compliance. This part of the system operates somewhat like the criminal justice system in reviewing past actions, preventing fraud and delivering punishments. This includes data-matching (and Robodebt), fraud investigations, payment entitlement reviews and recovering debts from welfare recipients. The aim is to systematically identify as many ‘overpayments’ as possible and recover the money from recipients. Overpayments can occur for many reasons, some of them deliberate fraud, but many by common mistakes.

A system of checks and punishment

It is reasonable for the social security system to have some checks in place that prevent fraud and waste. But over time those checks have become more punishing and assume wrongdoing as bureaucrats and governments continue to search for new ways to tighten the budget. Robodebt sticks in the public consciousness because it feels unfair and unjust. But it is worth remembering it is only the most recent part of the many layers of sanctions faced by welfare recipients.

The Royal Commission has been directed to make recommendations that ‘would prevent a recurrence of any failures of public administration you identify’. To do this, the Royal Commission must consider the entirety of the sanctioning systems directed at vulnerable people. Over 30 years, these systems have been developed bit-by-bit as each Government and generation of bureaucrats dutifully devise new methods to find savings in the Social Security budget. It is these layers of administrative burden – the complexity of rules that confuse and deter – that drive overpayments and mistakes that data-matching is then used to capture and generate debts. It cannot be enough to punish individual actors, yet leave in place a complex system that provides every incentive for financially desperate governments and bureaucrats to add new layers to this machine.

About the author:

Jacob Priergaard is a PhD candidate at the Crawford School at ANU who researches Australian social security and unemployment policy. His thesis explores the institutional and administrative history that has created our current social security policies.

Content moderator: Sue Olney