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Centrelink debt recovery not the success that Christian Porter claims

It's been a notable Christmas and New Year for Christian Porter, and not in an auspicious sense. Centrelink's automated welfare-debt retrieval system has mistakenly sent bills of up to $24,000 to welfare recipients, warning them that debt collectors would be called unless payment was received. As a result, the Social Services Minister has been accused by the Labor Party and Tasmanian independent MP Andrew Wilkie of preying on Australia's most vulnerable individuals. The Commonwealth Ombudsman has launched an investigation, and the former head of the Digital Transformation Office, Paul Shetler, has said that, were Centrelink a commercial enterprise, its high data-matching error rate would have sent it out of business.

Damaging criticism and publicity like this normally would have a minister rushing to initiate a review, or at the very least expressing regret for any (unintended) distress caused. But Mr Porter has remained his usual phlegmatic self, saying the letters sent initially to welfare recipients were "polite" and that only a "small" number of people had been asked to refund money they did not owe. He reiterated his belief that the program was working well, and said it would be extended further to recover nearly $4 billion in welfare debts over the next four years.

Such insouciance may be attributed to the Coalition's belief that taxpayers hold welfare recipients in low regard, and that they reserve particular contempt for people rorting the system. Conversely, it might indicate Mr Porter's resolve and confidence that this initiative – which matches Centrelink payments to Tax Office income data to determine if individuals have been overpaid – is fair and equitable and that it will deliver a much-need fillip to government finances.

Yet, as Mr Shetler has intimated, and as Fairfax Media economics writer Peter Martin detailed this week, the debt-recovery program is susceptible to errors. This is because Centrelink has averaged out yearly tax return information to calculate fortnightly income, despite the likelihood this figure might vary according to the availability or type of work undertaken.

In Mr Porter's defence, the letters sent to Centrelink clients thought to have been overpaid and asking for information, which might explain the discrepancy, were polite and considered. However, these clients were given only three weeks to respond and prove they were entitled to the benefits. And, despite initial claims of confidence in the new automated system, Mr Porter now admits that about 20 per cent of the roughly 170,000 notices so far sent out were incorrect.

A fishing expedition can't be ruled out, since the government is determined to make welfare an inconvenient and difficult option for anyone minded to seek it. However, a careless and hasty approach to design and implementation is the more likely explanation. Mr Porter's reluctance to admit that possibility is troubling, particularly as workers who receive family tax benefits, and age pensioners, are next in line for data matching. This blowback may be a taste of further things to come for Mr Porter.