The former head of the Department of Human Services has been asked if she cared more about recipients engaging with the welfare system than whether their debts had been inaccurately calculated.
Kathryn Campbell has returned to the stand for a second day of evidence at the Royal Commission into the Robodebt Scheme.
She told the commission she had long been concerned there were not enough efforts made to contact people who had received debt notices.
Under questioning from Senior Counsel Assisting Justin Greggery, Ms Campbell gave evidence that in early 2017 — when the scheme was attracting considerable negative attention — she was turning her mind to ensuring procedures and engagement with people was so that "procedural fairness was afforded".
Mr Greggery asked if she was referring to informing people about how their debts had been calculated — by means of income averaging.
"I'm referring to the fact, to clarify that the recipient had received the letter… that there was a contact phone number where people could contact a person, a staff member of DHS [Department of Human Services] … that people could use bank statements rather than pay slips, to help facilitate the rollout of the program," she said.
"None of those features address the risk of overpayments or underpayments and the calculation errors though, did they?" Mr Greggery asked.
"I was working off the advice that had been provided in January 2017 as part of the Ombudsman's report, that averaging could be used as a last resort," she said.
"The focus I had in the first months of 2017 was to make the system user-friendly and allow recipients to be able to engage in the system."
Mr Greggery pressed on whether she was aware that people were not engaging with the system — sometimes by choice — and she said she was working diligently to try and improve it.
Calculating debts that 'did not exist'
He asked if it mattered whether people engaged or not, if the debts may have been wrongly calculated using averaging.
Ms Campbell said she wanted to get people to engage before averaging was used as a last resort.
"Didn't it trouble you that using averaging might lead to the calculation of debts which did not exist, in whole or in part — irrespective of legal advice about their validity?" Mr Greggery asked.
Leading to the exchange, the inquiry heard:
Ms Campbell: "Did it trouble me?"
Mr Greggery: "Yes."
Ms Campbell: "I was troubled that citizens weren't able to engage with the system."
Mr Greggery: "Why was that more important to you than the concern about the prospect that averaging might create debts which didn't exist?"
Ms Campbell: "Because I didn't want to use averaging."
Mr Greggery: "Then why did you use it?"
Ms Campbell: "Because the legal advice, which we had received from the Department of Social Services, that averaging could be used as a last resort. And so we didn't want to do that. Which is why we worked hard to ensure that the recipients could engage with the system and work through it, and we would only use averaging as a last resort. And in fact, I don't think we used it from early 2017 until August or September 2017."
The 'trigger point' in compliance reviews
Mr Greggery continued to press Ms Campbell about whether averaging had been at the centre of the new automated system.
She said it had been the "trigger point" to seek compliance reviews.
"It was more important to you to get people to engage with the system, rather than accurately calculate actual fortnightly income?" he asked.
"No. No, I didn't say that," she said.
"Well, I'm suggesting that's the effect of your evidence," Mr Greggery said.
Ms Campbell said her understanding was they had put the use of averaging on hold while they sought to improve the system.
Mr Greggery: "But [averaging] might lead to an inaccurate calculation of a debt for a significant cohort of those who didn't engage?"
Ms Campbell. "Yes."
Mr Greggery: "Why wasn't that more important than trying to get people to engage?"
Ms Campbell: "Because we were trying to get them to engage so then it wouldn't happen. Because we would get them to engage first."
The inquiry continues.
Cabinet given wrong information
The royal commission heard late on Wednesday that cabinet had been told something untrue about the change of compliance.
Ms Campbell was questioned about the Department of Social Services' budget submission from 2015 — a document marked "Sensitive Cabinet" and redacted in parts.
Part of that submission, shown to the royal commission, said the "new approach" of targeting historic overpayments "will not change how income is assessed or overpayments calculated".
Earlier in the day, Ms Campbell was shown a costings document from March 2015 with similar language — and questioned over the change from a February 2015 executive minute to the then-minister Scott Morrison, which said policy and legislative change would be needed.
She said the portfolio budget submission for the social services department had not necessarily come to her, as the secretary of human services, and she could not recall seeing it at the time.
Mr Greggery: "You had an understanding that legislative and policy change was required as at 12 February 2015 — and by 9 March 2015 someone in the department had changed that position without you noticing and without your intervention?"
Ms Campbell: "Somewhere, that changed. I don't know where that changed."
Mr Greggery: "But you've previously accepted that the [February 12, 2015 executive] minute reflected your understanding of the state of affairs?"
Ms Campbell: "That's correct."
Mr Greggery: "And suddenly things slip through to the point where cabinet is told something which cannot be true?"
Ms Campbell: "But I didn't tell them."
The royal commission's hearing will resume on Thursday.
