Centrelink office

There couldn’t have been a more stark set of political controversies over the summer break than Centrelink’s failed algorithm chasing money from the most vulnerable and Health Minister Sussan Ley buying an apartment on a whim while visiting the Gold Coast for an announcement.

Both play into the growing sense that the government is completely out of touch.

Crikey broke the news just before Christmas that Centrelink had been erroneously issuing debt notices to people who had been receiving Centrelink payments at some point over the past six years.

The system’s problems are twofold. Firstly, Centrelink is trying to match fortnightly payment data against annual ATO income data. If you are assessing someone’s income for a whole year when that person claimed welfare for only a portion of it (presumably before finding a job), then of course it would look like the recipient was ineligible for Centrelink.

The other factor is that, for reasons that defy logic, the government is using an employer’s name, rather than ABN, to cross-reference the data. This means that in some instances, it looks like people have worked for companies they haven’t reported as working for, when in reality the business name is different from that reported. It’s not that unusual; companies like PricewaterhouseCoopers often go by several different names.

The system assumes people are guilty until proven innocent and refers them to debt collectors on a multimillion-dollar contract to pay up. Those who dispute the money Centrelink claims it is owed need to begin paying it back while an investigation is conducted into whether Centrelink stuffed up. Some people affected have told Crikey they’ve been told to make payments while they dig up all their old pay slips in order to prove Centrelink has got it all wrong.

To say the issue blew up over the break would be an understatement. It became the biggest news of the holiday period as people began receiving notices from Centrelink demanding payment. Even A Current Affair, the program traditionally known for its lack of sympathy for “dole bludgers”, was going in to bat for people being sent incorrect notices. This is not to be underestimated; A Current Affair was, after all, where the currently-MIA Human Services Minister Alan Tudge was initially crowing that the system could throw people in jail for “false” claims.

[How to dispute a Centrelink debt]

While Tudge remains on holidays, in his place, Social Services Minister Christian Porter has ducked and dodged questions about the system. He misled the public by claiming there had been very few complaints about the data matching (keeping in mind it is still early on, and formal complaints are the last step) while also refusing to address how the system could be getting it wrong. In his one press conference on the matter in Western Australia last week, Porter claimed in a “tiny number of instances” people were required to provide more documentation. The number of people drawing attention to their plights in the media suggests the problem is much bigger than the government admits.

Porter claimed there was a “mutual obligation” for Centrelink recipients to provide accurate data to the government on their income, but nothing was said about Centrelink’s erroneous interpretation of that data. The government’s stubborn refusal to put the system on hold until it can be fixed means the worst is yet to come. Whenever Tudge finally returns from his holiday, he’ll likely face more parliamentary inquiries, reviews and pressure to suspend the automated notice system until it is fixed.

[Oi ScoMo, cracking down on welfare cheats isn’t that simple]

The biggest question is how this could happen in the first place. The system has been in planning for years. The ATO has long done data matching, and Centrelink has been piloting similar programs with Taskforce Integrity. These location-specific reviews should have flagged any potential issues with determining whether someone was overpaid. Perhaps in the government mantra of being agile, proper testing wasn’t conducted before the Centrelink Debt Robot was unleashed on an unsuspecting public. Going to an automated system — in effect, removing the human from Human Services — seems to have been done without any safeguards and with an overwhelming belief that “big data” will solve everything.

Porter must have been somewhat relieved, then, when everyone’s favourite summer story, travel expenses, reared its head again. Gold Coast property investment is questionable at the best of times, but it could now be responsible for bringing down a health minister, after Ley used a work trip to the Gold Coast in 2014 to buy an $800,000 apartment on a whim. Except it wasn’t a whim — she had pre-approved finances. The money is being paid back to the taxpayers (sadly without the minister being referred to debt collectors), but how removed from reality do you have to be to think that buying an investment apartment on a whim — when so many struggle to even enter the property market — sounds like a better excuse than just admitting you did some personal business while on a work trip?

Ley has stood aside without pay while her expenses for this and several other trips — including one to a “prominent businesswoman’s” New Years Eve event — are investigated. Senator Arthur Sinodinos, whose own relationship with governance and disclosure could be charitably described as casual, will be filling in for her pending the results of the investigations.

Ley said she is opening up all her diaries and other data to the government as part of the investigation — but she won’t give her information to the media because they’d “go on fishing expeditions” — perhaps Centrelink has a data-matching system to find out whether Ley’s ministerial diary matches all her claimed expenses.

The last victim of a travel expenses scandal, Bronwyn Bishop, was on Sky News last week defending Ley, saying that MPs were too busy and often did not pay attention to their expenses (which they have to sign when sending to the Department of Finance). People who claimed Centrelink payments at some time over the past few years are expected to have all the documentation to prove Centrelink is wrong, but it’s just too much effort for MPs to ensure they don’t accidentally bill the taxpayer for a trip to buy an apartment? Right.

The Australian‘s Chris Kenny has suggested that if Ley’s departure from the frontbench is permanent, there is an experienced former health minister “waiting in the wings”. Labor would be rubbing its hands together at the prospect of Tony Abbott returning as health minister. RU486, anyone?

Peter Fray

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