Robodebt was both a crime and a preventable disaster

And the lessons of Robodebt are still being ignored

Independent journalist and academic, Dr Ben Eltham, has been covering the Robodebt scandal from the beginning. This is his first full account of what is emerging as one of the greatest public policy scandals and injustices in Australian political history.

Part One deals with the history of the scheme and how it came to be enacted.

Part Two sets out what the Royal Commission has revealed about the state of the public service and the shortcomings of our democracy.

(Update: Please note that this piece has been edited to take into account the final few weeks of the Royal Commission.)

In late 2016, welfare recipients in Australia started reporting that they were receiving threatening phone calls from debt collectors. They were told they had accrued a welfare debt to the Australian government, that the debt would need to be paid back, and if it were not, that there could be legal consequences.

Rosemary Gay, a retired bookkeeper, received a Centrelink debt notice for more than $64,000 in September 2016. A meticulous record keeper, she couldn’t understand where the debt had come from. With her background in accounts, she had reported her income diligently and had kept every pay slip. It was arithmetically impossible to owe the government that much money, Gay reasoned: “They couldn’t possibly have overpaid me that amount of money; they would’ve had to have paid me a hugely larger sum,” she told the Commission.

Gay was traumatised, fearing she would have to sell her house.

Rosemary Gay had been swept up in one of the largest failures of public administration in Australian history. Although she didn’t know it at the time, the Department of Human Services (DHS) had included her in a data trawl of its Online Compliance Intervention (OCI). After a series of social media posts and media reports highlighted the problem, this program came to be known as “Robodebt”.

Gay spent hours on the phone to Centrelink trying to make sense of the debt. After months of providing the government with her pay details, she was eventually told her debt had been recalculated – this time to “only” $6,680. After more phone calls, she then applied to have her debt reassessed again. This time it was reduced to $120. Four years later, the government admitted its error and told her she didn’t owe anything.

"I was shocked and angry by this time to think that they could initially cause such a traumatic experience to anybody accessing support from a pension," Gay told the Commission. “That they could turn someone’s life upside down and tell them they had owed that amount of money and then do reassessment and still get it wrong.”

In a liberal democracy we typically expect governments to obey the law, but the Royal Commission’s narrow focus on legality has obscured broader questions about
policy and ethics, and we need to be clear about this: if the Coalition had been able to amend the social security legislation in 2015, it seems likely Robodebt would have been perfectly legal. It would probably still be operating today.

I did some of the early journalism on Robodebt, although I was by no means alone in reporting on the new government repayments drive. In an interview with me, one welfare recipient described the experience of receiving these debt notices:

“For about two weeks, I was struggling with some pretty serious anxiety as a result of daily automated phone messages and texts telling me I owed a debt. Some did not even identify themselves.

After a while, I typed the debt collectors’ name into a Google search, assuming it was some sort of phishing scam and found others saying it was on behalf of Centrelink [Australia’s welfare payments agency]. I called Centrelink, who confirmed that I had a debt and needed to pay the collectors directly as it was now out of their hands.

They had already taken my last tax return to help pay the debt.” 

Another recipient told me that:

“They averaged out my annual income over the full 52 weeks, meaning I was ‘overpaid’ some weeks. I called and spent two hours on the phone, the guy prefaced our chat by saying ‘Centrelink is never wrong, you’re going to have to pay’.

Once I emerged from the chaos of the first four weeks, I discovered that the debt had already been escalated to a collection agency. They are consistently hassling me and have informed me they can ‘garnish’ my wages and take the money from my bank account.”

These interviews were conducted in December and January 2017, just a few months after the OCI started operating at full capacity. But these victims had already identified the two salient aspects of the Robodebt program: income averaging, and the reversal of the proof onus.

Averaging has drawn the most attention, both in the Royal Commission and in the media. Searching for a way to claw billions of dollars back from the annual welfare bill, the architects of Robodebt settled on a crude but effective measure: an algorithm that would take annual tax data and match it to a recipient’s reported income. If the tax data showed that the recipient had earned more income than they had reported, this implied that the recipient had been overpaid during that period. The algorithm then automatically generated a debt.

The problem—and it was a big problem—was that tax data is annual, while welfare payments are income-tested fortnightly. An annual number from the ATO would tell the Department nothing about a recipient’s fortnightly timeline of earnings.

Rather than grapple with this inconvenience, the Department of Human Services simply fudged it. They built an algorithm to divide the annual ATO total by 365 days, and then multiply it by 14, to arrive at an averaged fortnightly figure.

As anyone with primary school maths can recognise, this average could never have been an accurate estimate of someone’s real earnings in a particular fortnight. A welfare recipient might have worked for some of the year, lost their job, and then applied for benefits. In this scenario, Robodebt would simply take their full year’s earnings, divide it by 26, and calculate an average figure. Given that the Department didn’t bother to check the recipient’s actual fortnightly earnings (which it could have done, for instance by writing to employers and banks for details), the averaged figure was essentially a fiction.

As eminent barrister Peter Hanks told the Royal Commission, from the point of view of debt recipients and outside observers, the algorithm was a “magical, imaginary process.”

Averaging was bad enough, but the other nasty aspect of Robodebt was the reversal of the onus of proof. Vulnerable welfare recipients, some homeless or escaping family violence, were levied with a huge and opaque government debt and then told it was their responsibility to prove they didn’t owe it. The Department of Human Services made sure that providing such proof was difficult.

For many recipients, it was impossible.

Some debts were for payments that had been accessed many years ago, and yet the Department demanded a record of every payslip from every employer for the period in question. Too bad if you couldn’t find them, or if the employer had gone out of business, or you couldn’t afford to pay the bank for old bank statements. As well, the Centrelink website was clunky and prone to crashing; victims in rural areas with patchy internet had almost no chance of successfully “engaging”, as the Department euphemistically called it.

The toll on ordinary people has been extraordinary. By the time it was stopped in late 2019, Robodebt had levied more than a million automatic debt notices, ensnaring a good part of the Australian population in its tentacles.

Meanwhile, beyond all this, Robodebt had a shameful secret: it was unlawful. The bureaucrats who designed it knew this, but they went ahead and implemented it anyway.

The reason we know all this is because of the Royal Commission into Robodebt that has run since late 2022 in Brisbane, helmed by the admirable Catherine Holmes AC SC. Across weeks of forensic interrogation, Robodebt’s counsel assisting have delved deep into the corridors of power in Canberra, uncovering an arrogant and unaccountable welfare bureaucracy whose sole aim appeared to be clawing back savings for the federal Budget from ordinary citizens, regardless of advice they were receiving that cast doubt on the legality of the entire scheme.

via @strangerous10

The portrait of the Australian Public Service emerging from the Royal Commission is grim.

Working conditions appear stressful and chaotic. Competence takes a back seat to loyalty. Senior managers come across as domineering bullies prepared to browbeat underlings into acquiescence. Those working beneath them have frequently referred to the nastiness of the public service culture, especially under such figures as Kathryn Campbell and Malisa Golightly. Orders given were expected to be carried out, and bad news was unwelcome, according to testimony at the Royal Commission. Needless to say, this was not a culture within which serious concerns about the legality of an important budget-saving’s measure were likely to listened to, let alone acted upon.

If the top brass has shown themselves to be evasive and mendacious, the picture
sketched by the Commission of the line managers in the APS is even more depressing:
bumbling, inept, sometimes blankly uncomprehending. A succession of hapless middle
managers have been eviscerated by the Commission’s assisting counsel, notably the
surgical Justin Greggery KC. Time and again, the key architects of the scheme, officers
like Mark Withnell, Jason Ryman and Scott Britton, have claimed not to remember
key moments in the creation of the scheme and its defence, even when the Commission has shown them their own emails or handwritten notes.

Ryman in particular cut a bathetic figure at the Commission. For the person running the Online Compliance Intervention, he didn’t seem to remember much about it. Pasty-faced, watery eyed, his top button loose, Ryman complained of being bullied by
Golightly, and struggled to recall any of the key moments creating the Robodebt trial
program or setting up the automated mail merge. Despite this, he claimed he always
thought the scheme was lawful.

Strangely, Ryman couldn’t remember asking for legal advice on the scheme (the Commission tabled an email he sent asking for it) or why he deleted a crucial reference to averaging in a brief sent to Scott Morrison. After Cabinet approved the measure, Ryman changed his mind and decided he didn’t need legal advice after all. Instead, Golightly ordered Ryman to remove references to averaging in the formal policy documents.

In a culture of “get it done”, where middle managers were driven relentlessly by Secretaries and Deputy Secretaries to deliver huge and complex projects, crucial details like the legality of a scheme were simply brushed aside. Far from “frank and fearless”, the advice of top bureaucrats appears hopelessly politicised, even pre-emptively tailored to the political proclivities of minsters.

When Robodebt hit the media in early 2017, Secretary Campbell moved into Alan Tudge’s ministerial office to run the crisis response. This response had little to do with fixing the scheme, and everything to do with media management. Instead of asking themselves whether levying welfare debts based on imaginary numbers was fair or sensible, Campbell and Tudge counterattacked. A calculated media campaign was advanced to push a line about dole bludgers and welfare cheats. Departmental resources were tapped to release the private information of Robodebt victims to friendly journalists. Inevitably, the Coalition’s favourite reporter Simon Benson was given a “drop”.

As the Guardian has reported, and in some of the most revealing testimony at the Royal Commission, “Alan Tudge’s former media adviser, Rachelle Miller…told a royal commission she devised a strategy to place stories in ‘friendly media’ – including the Murdoch press – after her boss told her to ‘shut down’ the media storm over robodebt in early 2017.

“That media strategy was quite comprehensive that I developed in January,” she said. “That involved placing stories with the more friendly media, the right media, about how the Coalition was actually catching people who were cheating the welfare system.”

via Robodebt Royal Commission

When the Secretary of a government department is working daily with a minister to
release private information of ordinary citizens to discredit their criticisms of
government policy, something has gone very wrong with the Australian Public Service.
In his decision on the Robodebt class action, Justice Murphy referred to the scheme as
“stuff up” rather than a conspiracy, but the Royal Commission has comprehensively
demolished that comforting notion.

There was a conspiracy, and lots of people were in on it.

The Commission has heard scarifying evidence of how senior public servants deliberately misled the Commonwealth Ombudsman, altered policy briefs sent to Cabinet, and covered up damaging legal opinions and consultant’s reports. In one notorious example, a highly critical legal opinion from Clayton Utz was simply thrown in the bin. “We’ve gotten advice that says it’s not legal,” one junior lawyer said she told a superior, Deputy Secretary Nathan Williams. Williamson told her to get back in her box. “His response to me was ‘it’s legal – it’s really clear that it’s legal’.”

This kind of thing happened a lot, according to testimony at the Royal Commission. When consultants PwC (PricewaterhouseCoopers) looked a bit too closely into the scheme, after being commissioned for an “end to end” review of Robodebt in 2017, the Department paid their invoice early and told them not to send in their final report.

Policy experts in the Department of Social Services (DSS) raised red flags about Robodebt as soon as they heard about the DHS’s data matching plans in 2014, and a mid-level government lawyer, Anne Pulford, was asked to write an opinion on the scheme. Pulford told her superiors at the DSS that income averaging was inconsistent with the Social Security Act—in other words, that it was unlawful. Key figures in the DSS hierarchy knew this, and they even inserted a line into the official “New Policy Proposal” document that the new data matching trawl would require legislative amendment. But at some point in the budget process, that crucial sentence was deleted. Cabinet gave the green light, and Golightly marshalled her DHS troops to drive them towards a Robodebt pilot.

As in any disaster, there are some stories of valour and bravery, even in the darkest
hours.

Eventually, in early 2017, Pulford was called in and encouraged to write another legal
opinion about Robodebt – one that said it was okay. As the Royal Commission has forensically pieced together the puzzle, what leaps out is the determination of the key public servants to press ahead with Robodebt, no matter the legal and ethical questions. When the scheme ran into its first firestorm of public criticism in late 2016, both the DSS and the DHS circled the wagons and fought a bitter rear-guard battle to try and save it.

The dark centre of Robodebt’s illegality is the late Malisa Golightly, Campbell’s hard-driving lieutenant. Because she died before the Royal Commission started, Golightly has proved an irresistible scapegoat for many of the key players, including Britton, Ryman and former DSS deputy secretary Serena Wilson.

In these accounts, Golightly was the driving force behind Robodebt, using her position as Campbell’s 2IC to intimidate and bully colleagues and subordinates into submission. An experienced practitioner of Canberra’s dark arts, Golightly appears to have known who to sweet-talk and who to cudgel. The Commission heard testimony from a mid-level policy officer, Tenille Collins, who was so concerned about Robodebt that just before Christmas 2016, she asked a departmental IT officer to turn off the income averaging algorithm. When she found out about this, Golightly hit the roof, pulling Collins into a meeting to explain herself. Collins said Golightly "screamed at me irrationally" for an hour. The following day, Golightly called another meeting, smashed a phone on the table, and threatened to sack Collins.

Even as she drove her underlings towards Robodebt delivery, she was also able to calm the Commonwealth Ombudsman, convincing them that the scheme was lawful, even when 2014 DSS legal advice clearly showed it wasn’t. If Golightly had lived, it might not have been so easy to blame everything on her. And none of this absolves her direct superior, Campbell, or the ministers directing the welfare crackdown.

The manifest failure of the Commonwealth Ombudsman to halt or even significantly modify Robodebt is another in the long list of failures the scandal reveals. Supposedly a check-and-balance on the worst aspects of Commonwealth maladministration, evidence from former deputy Ombudsman Louise Macleod revealed complicity and cowardice from the body that purports to exercise oversight and investigation over federal departments and agencies.

Macleod told the Commission that she and her colleagues had drafted a strongly critical draft report, questioning the legality of Robodebt's averaging process. But her boss, acting Ombudsman Richard Glenn, edited out the negative comments, waiving through the DHS claim that Robodebt was lawful. When he testified, Glenn described an investigative process where DHS was sent the draft Ombudsman's report in a track changes document, effectively giving the Department the chance to edit its own investigation. Macleod broke down on the stand when shown internal DHS emails revealing the extent of the Robodebt cover-up. In subsequent years, key figures like Campbell, Tudge and Robert would repeatedly quote the 2017 Ombudsman's report and its false statement that Robodebt was lawful.

In fairness, the Ombudsman was not alone.

• Senior managers at the Australian Taxation Office harboured grave reservations about sharing tax data with the DHS welfare cops but went ahead and shared the data anyway.

• The Information Commissioner, whose “protocol” was used by the DHS to justify the data sharing agreement, proved utterly incapable as a watchdog.

• Senate Estimates proved useless as an accountability mechanism, as Golightly and Campbell laid down a smokescreen of obfuscation and double-talk about crucial aspects of the scheme.

• The Attorney-General’s Department knew that the government was losing multiple cases about debt averaging in the Administrative Appeals Tribunal (AAT) but did nothing to enquire of either the DSS or DHS as to whether something might be amiss.

Ironically, the AAT itself—given its woeful stacking by the Coalition—did a reasonable job of highlighting the obvious flaws in Robodebt’s averaging system. A key AAT decision in 2017 by Terry Carney, a distinguished lawyer and long-term member of the Tribunal, showed clearly that the scheme was not lawful. The government dealt with this difficulty by carefully making sure it did not appeal any AAT decisions on Robodebt, lest the Federal Court reach the wrong conclusions. For his temerity, federal Cabinet booted Carney off the Tribunal.

Beyond Pulford and Carney, there are other stories of valour and bravery, even in the darkest hours of what we now know as Robodebt.

At the lowest levels of the public service, amongst the desk clerks and frontline officers at Centrelink, a number of brave souls blew the whistle. Veteran compliance officer Colleen Taylor, for instance, sent an email setting out her criticisms of Robodebt that made it all the way to Campbell’s inbox. Everything that Taylor wrote was true: the scheme was unethical, mathematically flawed, a fundamental breach of trust. But in the pyramidal hierarchy of the APS, her pleas for a rethink were never going to be taken seriously. Taylor was given a consolation meeting with one of Golightly’s senior managers, Karen Harfield, and told to get back to her desk.

The Commission later published internal emails within the Department dismissing Taylor as overly sympathetic to welfare recipients.

Robodebt has raised grave questions about the person and character of the powerful mandarins at the top of Australia's public service. These men and women command huge salaries and enjoy very pleasant perks of office – lucrative superannuation, business class flights, shiny medals on Australia Day. They have a lot of power, managing thousands of staff and exerting day-to-day control over the lives of ordinary citizens, including welfare recipients. These enticements of wealth and power appear to have selected for a class of people who will stop at almost nothing to keep a minister happy. Campbell was earning three-quarters of a million a year, more than a High Court judge or the prime minister, when she was given her AO for “distinguished service to public administration” in 2019. It was later in 2019 when, as Secretary of Social Services, Campbell started white-anting her successor in Human Services, Renee Leon, to then-minister Stuart Robert. According to Leon, Campbell encouraged Robert to break up Human Services and dismiss Leon. Indeed, five departmental secretaries including Leon were dismissed in 2019. Campbell’s reward was the plum role of Secretary of Foreign Affairs, a role she secured with no prior diplomatic experience.

There is no doubt that, if the institutional incentives reward this kind of behaviour, the system will keep elevating morally challenged managers, and the question arises as to whether these are the sort of people we should be putting in charge of sensitive welfare programs.

And this is where we start to understand the true horror of what we mean by Robodebt.

Part Two: Light at the end of the tunnel, or another train hurtling towards us?

Governments have been executing lawful but devastating social policy for decades.

Politicians certainly want their public servants to get results. Former DHS Secretary Renee Leon spoke freely at the Commission, describing a culture of fear in which secretaries and deputy secretaries who couldn’t deliver political outcomes for the Coalition were marked for destruction. The ABC’s Laura Tingle has been covering politics in Canberra for 40 years and was surely onto something when she wrote recently that the “public service has been debased over the past 30 or 40 years into an institution driven by a ‘can do’ culture determined to deliver to the demands of government, even to the point where it is delivering things that aren't actually legal.”

One reason Robodebt is so significant is that it illuminates the lie of mutuality. Victims had in fact successfully met their mutual obligations, but the Robodebt machine cranked out a debt notice anyway.

In a liberal democracy we typically expect governments to obey the law, but