Potentially "catastrophic" external legal advice that could have shut down Robodebt appeared to have been disregarded after the government failed to elevate it beyond a draft form, a royal commission into the scheme has been told.
The commission, being held in Brisbane, has been hearing evidence from public servants involved in formulating the earliest legal and policy advice about the bungled Robodebt scheme that wrongly claimed hundreds of thousands of welfare recipients owed debts to Centrelink through a process of income averaging.
Counsel assisting the commission Justin Greggery KC questioned Social Services Department lawyer Anne Pulford about external legal advice the department obtained in August 2018 that raised concerns about income averaging by scheme.
The advice was sought after a decision was handed down in the Administrative Appeals Tribunal relating to Robodebt.
Mr Greggery drew Ms Pulford's attention to email comments from government lawyers about the external advice including one describing it as "somewhat unhelpful" and another which stated: "They might be able to rework the advice if this causes catastrophic issues for us but there is not a lot of room for them to do so."
He asked Ms Pulford if she appreciated "that, at that point, the department had in its possession an external legal advice which said the Robodebt scheme was not lawfully sustainable".
Ms Pulford said she didn't recall the details of the advice but presumed she did appreciate the significance.
Mr Greggery drew Ms Pulford's attention to an email she sent, noting the income-averaging approach was not supported.
"You are signalling there that this advice if accepted means the end of the Robodebt scheme," he said00.
Ms Pulford said she did not recall what she was trying to signal by the words.
Under questioning from Mr Greggery, Ms Pulford said that, from information she had seen, the external legal advice was not converted beyond a draft advice form.
She said that, if an external advice was not formalised beyond a draft, then it was "treated as not representing the departmental preferred view and arguable still open to discussion or comment or potential revision".
The reference prompted Commissioner Holmes to ask if, when the department received unfavourable advice, was it "just left that way and then never represents anything that you deal with, is that the approach?"
Ms Pulford replied that the scenario occurred "regularly" and it happened many times "that I had seen it".
Commissioner Holmes responded by saying: "I'm appalled".
Asked by Mr Greggery who would have made the decision about leaving the legal advice as a draft, Ms Pulford said the decision-making within the policy area was a matter for the internal organisation.
"I couldn't necessarily comment on saying whether that would have been if such a decision were made, it would be necessarily made at director level or at a different level,'' she said.
The commission has previously been given evidence that Ms Pulford was co-counsel on legal advice formulated by her team in 2014, which indicated the then-proposed scheme was illegal.
Inquiry shown emails relating to draft brief prepared for Scott Morrison
Earlier on Wednesday, the inquiry was told lawyers in Ms Pulford's section appeared to come under pressure later — when the scheme was being formulated — from then-social services minister, Scott Morrison, in relation to providing advice so it could be submitted to the Finance Department.
The inquiry was told lawyers in Ms Pulford's team provided more advice in 2015 because the Department of Human Services was advised that "Mr Morrison indicated he wants a number of potential proposals in an attached briefing [to] be brought forward for portfolio budget statements".
Ms Pulford agreed with counsel assisting Justin Greggery KC: "That it appeared pressure was coming from a clearance by minister Morrison to have a new policy proposal developed to the point where it might be submitted to the Department of Finance".
She agreed the advice was being sought in relation to proposals, such as the capability to detect, investigate and prosecute suspected fraud and noncompliance in the context of social welfare payments.
They also included the "utilisation of new technology to increase data analytics, complex network analysis and geospatial analysis and establishing a capability for real-time monitoring and risk-profiling".
The inquiry was shown internal emails between lawyers within the Social Services Department in 2015 relating to a draft brief being prepared for Mr Morrison.
Those emails referred to Mr Morrison requesting the Human Services Department "bring forward proposals to strengthen the integrity of the welfare system".
The emails went on to say the social security performance and analysis branch had provided comments highlighting the need for legislative change as well as the shift away from underlying principles of social security law.
Under questioning from Mr Greggery, Ms Pulford acknowledged the emails were seeking advice about what legislative changes were needed to get the proposal up and running.
Other emails revealed the need to provide preliminary advice to the Finance Department within just two days — a timeline that Ms Pulford agreed was "short".
The commission, before Catherine Holmes SC, continues.
