By Barry Healy

The government policy known as Robodebt – which went under a variety of names during its existence – was a deliberately contrived war waged against the poor and vulnerable in Australia by the Liberal/National Party Coalition (LNP) government between 2016 and 2020.

It was the logical product of decades of neoliberal cost-cutting of government services. It is a telling indictment of Australian public life that it has taken an 11-month long Royal Commission costing $30 million to come up with a recommendation that reads: “Services Australia [should] design its policies and processes with a primary emphasis on the recipients it is meant to serve.”

The particular failing of Robodebt was the inaccuracies produced by averaging of annual income instead of applying actual fortnightly income figures, as required by social services legislation. There was also the unfairness – and illegality – of charging a penalty when often recipients had not even been contacted, the difficulty for people in obtaining employment information from years past, the glitches with the online system, the lack of assistance from Centrelink officers and the unwarned of use of debt collectors.

Who is to blame?

There are many fingerprints of those responsible on this atrocity, including leading politicians and highly paid public servants. The public saw many of these people, from Scott Morrison to top bureaucrat, Kathryn Campbell (who earns nearly $900,000 per year) squirming under questioning.

In July 2014 Social Services minister, Kevin Andrews proposed a whole-of-government strategy for recovering debts owed by members of the public to the government. He suggested data matching, using online and self-servicing options, external debt collection agencies and applying a standardised interest charge to debts.

In January 2015, the newly-appointed Minister for Social Services, Scott Morrison described himself in an interview as planning to be a “strong welfare cop on the beat,” because Australians were “not going to cop people who are going to rort [the social security] system.”

Department of Human Services (DHS) minister, Marise Payne and Morrison worked together to fast track Robodebt through the cabinet process. In May 2015, as part of the budget, the government announced a measure with the ironic title, Strengthening the Integrity of Welfare Payments.

The scheme went through various names during its lifetime: PAYG Manual Compliance Intervention Program (1 July 2015 to 1 July 2016), Online Compliance Intervention (1 July 2016 to 10 February 2017), Employment Income Confirmation (11 February 2017 to 30 September 2018) and Check and Update Past Income (30 September 2018 to 29 May 2020). But it never changed its criminal purpose.

The government’s declared aim was to save $1.7 billion in social security payments over five years. Most of that was to come from using Employment Income Matching, which was supposed to expose overpayments resulting from incorrect declarations of income.

Employment Income Matching meant data-matching Australian Taxation Office (ATO) and DHS income information. If there was a discrepancy the recipient had to go online to explain it. A lot of the data was faulty, but the onus of proof was on the recipient.

People unable to placate the machine-driven interrogation were hit with notices to repay over-payments, plus a 10% penalty (called a “recovery fee”). To compound the pain, the Robodebt algorithms dredged up information from as far back as 2013, forcing victims to try to find income data from years before.

People caught in the Robodebt hall of mirrors found it difficult to even talk to a human being to sort out the matter.

Within months the media was full of stories of people who had had obviously wrong debts raised against them, many of whom heard of it first when contacted by debt collectors. The Commission says that the beginning of 2017 “was the point at which Robodebt’s unfairness, probable illegality and cruelty became apparent” to the government.

However, at precisely this point, the government suggested that a similar automated debt recovery system would be applied to the Aged Pension and Disability Pension, in order to potentially recover a further $1 billion.

Thus the LNP was driving towards its ideological goal of turning welfare payments from a right of citizenship into an insane trap of endless bureaucratic harassment.

Instead of re-examining the legalities, the Commission says, the government’s response was “to double down, to go on the attack in the media against those who complained and to maintain the falsehood that in fact the system had not changed at all.”

The downfall of Robodebt

Ultimately it was legal cases brought by victims that unravelled the government.

In February 2019, Legal Aid Victoria began a court challenge of the scheme’s debt calculation system. In November, the federal government agreed to Federal Court orders in the case that their averaging process was unlawful.

The government announced that it would no longer raise debts without first gathering proper evidence to prove a person had underreported their earnings to Centrelink.

That was two months after Gordon Legal announced they were filing a class action suit challenging Robodebt’s whole legal foundation. On November 16, 2020, the day before the class action was due to begin, the government settled out-of-court.

$112 million compensation was shared between 400,000 Robodebt victims. Additionally, the government stopped chasing an additional $720 million of debts they had levied against 470,000 other people.

On 11 June 2021, the Federal Court approved a $1.872 billion settlement incorporating repayment of $751 million, wiping of all remaining debts, with legal costs running to $8.4 million.

Decades of “dole bludger” propaganda

While the Albanese Labor government is to be commended for exposing the Robodebt scandal, Robodebt did not occur by accident. It was the logical fruit of decades of both Labor and LNP demonisation of welfare recipients.

As noted by ABC business reporter Gareth Hutchens, the expression “dole bludger” was coined in the 1970s by both the right wing Liberal politician Bert Kelly and the ALP minister, Clyde Cameron.

Since then, there has been a gradual re-centring of Australian welfare policy away from supporting people in need towards the neoliberal model of “help and hassle”.

Typical of this ideological shift was a 2003 Centre for Independent Studies paper by Peter Saunders. Saunders decried “job snobs” and said: “It is difficult to estimate the extent of outright fraud in the social security system, for many cases probably go unnoticed or unprosecuted.”

This was on top of decades of propagandising from the Hawke/Keating governments that government debt was wrong. As Carol Johnson put it in the Conversation in 2013, with crafted understatement: “Arguably Hawke and Keating’s economic rationalism had undermined a key justification for social democratic governments – namely their role in addressing market dysfunctions.”

She went on, saying that under the Gillard government “…some groups – such as single parents – were significantly disadvantaged under welfare-to-work measures.”

The Albanese government is continuing economic rationalism, policies that favour the rich and impoverish the working class.

The ALP’s commitment to delivering the LNP’s Tier 3 tax cuts will benefit “occupations that have high average incomes like CEOs of large corporations, surgeons, and barristers”, according to the Australia Institute. Indeed, while checkout operators will get zero tax relief federal politicians will get an extra $9,075 in their pockets.

Added to this loss of revenue is the $33 million per day for the next 30 years that will be wasted on the AUKUS nuclear submarine deal. It is easy to see that neoliberalism still rules in Australia no matter which major party holds office.