The “crude and cruel” robodebt scheme has resulted in a recommendation that unnamed individuals be referred for civil and criminal prosecutions, the royal commission has revealed.
The commissioner, Catherine Holmes, submitted her report to the government on Friday and revealed it contained a “sealed chapter” that recommended referrals of individuals for what it labelled a “costly failure of public administration”. The report said robodebt was “neither fair nor legal”.
The report – which is three volumes and almost 1,000 pages – includes 57 recommendations. The sealed chapter has been sent to various commonwealth agencies including the Australian Public Service Commissioner, the National Anti-Corruption Commissioner, the Law Society of the ACT and the Australian federal police.
Holmes criticises former Coalition minister Scott Morrison for allowing cabinet to be “misled” into thinking no legislative change was required to enact robodebt and “rejects as untrue” his evidence he was told income averaging was an established practice. Morrison said he rejected “completely” all findings against him.
Holmes rejected claims from Morrison’s cabinet colleague Stuart Robert that he was obliged to defend the scheme in its dying days.
‘There will be accountability’
Anthony Albanese told reporters in Canberra that Morrison’s future was a “matter for him” but the commission had “comprehensively rejected” Coalition claims the welfare system had not changed.
Holmes’s decision to keep referrals confidential was taken “so as not to prejudice” civil or criminal actions, the prime minister noted. “And I think people want action as a result of this.”
Albanese said he was “very confident” that agency heads would take “immediate action pending further investigations” into public servants who were subject of adverse findings.
The government services minister, Bill Shorten, said “there will be accountability”.
In the preface of the report, Holmes said what was “truly dismaying was the revelation of dishonesty and collusion to prevent the scheme’s lack of legal foundation coming to light”.
The report found robodebt was “devised without regard to the social security law” using an averaging process to estimate welfare recipients’ income in a manner that “was essentially unfair, treating many people as though they had received income at a time when they had not”.
This resulted in the “fiction that they now owed something back to the government”, it said. “It subverted the rationale on which income support was provided in the first place: as a safety net to ensure that people received help when they most needed it.”
Holmes accused the architects of robodebt of “an obliviousness to, or worse a callous disregard, of the fact that many welfare recipients had neither the means nor the ability to negotiate an online system” to provide evidence of their income dating back five years.
‘Disastrous effects’
Robodebt had “disastrous effects” including “families struggling to make ends meet receiving a debt notice at Christmas, young people being driven to despair by demands for payment, and, horribly, an account of a young man’s suicide”, the report said.
Holmes said the “unfairness, probable illegality and cruelty” of robodebt was apparent from the beginning of 2017, but the fomer government chose to “double down” on it, instead attacking those who complained in the media.
“Robodebt was a crude and cruel mechanism, neither fair nor legal, and it made many people feel like criminals. In essence, people were traumatised on the off-chance they might owe money. It was a costly failure of public administration, in both human and economic terms.”
Holmes said Morrison, the former social services minister and prime minister, had “allowed cabinet to be misled” because he did not make the “obvious inquiry” about why his department had changed its view on whether legislation was required to change social security law. “He chose not to inquire.”
Holmes noted evidence from Morrison – that robodebt was “initiated” by the public service – and described the statement as “entirely correct”.
But she said this account “[ignores] part of the story” and “fails to take into account the context and environment in which the measure was conceived”.
Holmes said the robodebt proposal was “precisely responsive” to the Coalition government’s policy agenda communicated by the minister for social services “against the backdrop of a drive for savings”.
“The perceived need to ‘just get it done’ meant that concerns about the immature level of development of the proposal went either unexpressed or unheard”.
Some of Scott Morrison’s evidence ‘untrue’
Holmes said the commission “rejects as untrue” Morrison’s evidence that income averaging was an established practice and a “foundational way” in which the department of human services worked.
Morrison said in a statement that he acted in good faith and on departmental advice and the findings against him were “based upon a fundamental misunderstanding of how government operates”.
There was “no evidence” he had pressured others to take the proposal forward, he said, adding that rigorous cabinet processes were followed and he was “legally entitled” to assume public servants had complied with their obligations.
“I reject completely each of the findings which are critical of my involvement in authorising the scheme and are adverse to me,” Morrison said.
Holmes rejected evidence from former government services minister Stuart Robert that he was required to defend robodebt while the government awaited conclusive legal advice, noting that “nothing compels ministers to knowingly make false statements, or statements which they have good reason to suspect are untrue”.
Robert told Guardian Australia: “As the minister that worked hard to get the legal advice and close down the income compliance scheme I welcome the report and its sensible recommendations.”
Robert said he had “not received a notice of inclusion in the ‘sealed section’ and I understand they have all gone out”. Guardian Australia asked him to clarify if this amounted to a denial of his having received a notice of potential referral, the terminology used by the royal commission.
Holmes said that Christian Porter, the former social services minister, “could not rationally have been satisfied of the legality of the scheme” and should have at least asked his department to produce any legal advice about its legality.
Holmes said that Alan Tudge, the former human services minister, used information about welfare recipients “in the media to distract from and discourage commentary about the scheme’s problems”, labelling this “an abuse of [his public] power”.
Tudge said in a statement on Friday afternoon: “I reject that finding in the strongest terms.”
Department secretary ‘failed to act’
The royal commission was scathing of former department of human services secretary Kathryn Campbell.
“Ms Campbell had been responsible for a department that had established, implemented and maintained an unlawful program,” the report found. “When exposed to information that brought to light the illegality of income averaging, she did nothing of substance. When presented with opportunities to obtain advice on the lawfulness of that practice, she failed to act.”
It found Campbell knew the initial 2015 proposal for robodebt – which went to a cabinet committee – said nothing about income averaging or the need for legislative reform. She knew at the time it relied on averaging and that DSS had advised it required legislative reform.
The royal commission rejected the suggestion this was simply an “oversight”.
“The weight of the evidence instead leads to the conclusion that Ms Campbell knew of the misleading effect of the [policy proposal] but chose to stay silent, knowing that Mr Morrison wanted to pursue the proposal and that the government could not achieve the savings which the [policy proposal] promised without income averaging”.
The report was also scathing of the way Campbell handled a request for legal advice about robodebt, made by the acting secretary Barry Jackson while she was on leave in early 2017, during the initial furore about the scheme and an investigation by the commonwealth ombudsman.
Campbell returned from leave and “instructed DHS officers” to cease responding to Jackson’s request for legal advice.
“The commission finds that Ms Campbell instructed DHS officers to cease the process of responding to Mr Jackson’s request for advice, motivated by a concern that the unlawfulness of the scheme might be exposed to the ombudsman in the course of its investigation,” the report said.
Holmes noted calls for compensation but concluded “a better use of the money would be to lift the rate at which social security benefits are paid”.
She recommended that budget rules require that any legal advice about whether a proposal required legislation should be included in budget submissions and circulated to ministers.
