As the treasurer lauds supply-side economics, a once-controversial recovery theory is gaining traction.This is the essence of modern monetary theory – that government budgeting is nothing like household or business budgeting, for the simple reason that government can create money.
Robo-debt’s potential toll
From June 2016 to October 2018, the Department of Human Services (DHS)sent more than 925,000 automatically generated letters asking welfare recipients to confirm their income as part of the federal government’s online compliance scheme, commonly known as “robo-debt”. Of those who received letters, 2030 died within the next two years.
That figure – 2030 deaths – is defined more by what we don’t know than what we do. Because the DHS does not collect data on cause of death, it was unable to say how many of those people died as a result of self-harm.
Most information on the cohort comes from questions asked of DHS officials by Greens senator Rachel Siewert at a supplementary budget estimates hearing in October. The DHS did not provide relevant answers until February.
Last month, Siewert told an estimates hearing she had received notice of “at least five people that have taken their own lives directly related to having received correspondence related to online compliance”.
Siewert told The Saturday Paper that “there are at least five families that believe a debt notice contributed to their loved one taking their own life”.
“I’m relaying what I’m reliably told,” she said. “There are people who contact us directly, and you can glean from what they’re saying that they’re very distressed. We’ve had parents contact us to say, ‘My son or daughter has had this notice and it’s really affecting them.’
“I’ve lost count of the people who’ve said to me, ‘We challenged it, we don’t think we owe it, but we’re going to pay it back because we can’t fight anymore.’ The community legal centres are so swamped, they just don’t have the capacity to take the government to court or run a class action. I feel helpless too. People just feel like they have nowhere to go.”
What we do know of those who died is that their average Centrelink debt was $2377. The average length of time between someone receiving an employment income confirmation letter and dying was 222 days. There were 520 recipients on the disability support pension, 503 on Newstart and 252 on the aged pension. Of the 2030, 776 of them were aged 45 years or younger. Six hundred and 63 recipients were marked as having indicators of vulnerability, such as a history of mental health issues, drug and alcohol abuse, homelessness or domestic violence.
The death rate of Newstart recipients from July 2016 to October 2018 was 0.63 per cent, while the rate for Centrelink customers after receiving an income data-matching letter was0.2 per cent. However, Siewert noted there were no figures for people whose debt notices had been escalated beyond an initial letter.
Despite a 2017 senate inquiry, which heard multiple accounts of people left feeling depressed and suicidal after being issued an automated debt notice, DHS representatives were unable to immediately answer questions on the location of the 2030 dead letter recipients, or how many had been referred to a social worker or helpline.
At estimates in February, DHS secretary Renée Leon PSM was critical of “media reporting that has strongly implied causation”.
“I know that there are people who have died after receiving a debt notice, but because we have a lot of customers, I’m afraid to say there are always some who are dying for a range of reasons,” said Leon. “Many of our customers have a mental health condition already. Some of them have already attempted suicide at earlier times of their lives, and some of them might, for reasons unrelated to the debt, already be under some personal pressure, and then the debt adds to that pressure.”
Despite the department’s reticence, the latest rounds of estimates hearings exposed further failings in the robo-debt scheme. Responding to questioning from Labor senator Murray Watt, DHS representatives revealed the program has only collected $500 million in cash. They also revealed the scheme had cost $375 million to implement as of the end of the 2017-18 financial year, making its likely current cost at least $400 million. Watt raised concerns that robo-debt was costing almost as much as it was collecting, given the “litany of terrible stories” from people hurt by the system.
“There’s a lot of people out there who’ve either had this happen to them or have watched it, and feel that it’s been an incredibly blunt, indiscriminate approach – with a lot of people hurt, debt collectors sent in to people and all the rest of it to target people who are very likely to struggle to be able to repay their debts – and to date we have $100 million to show for it in net terms,” Watt said.
Labor senator Lisa Singh focused on Centrelink’s reversal of the burden of proof, forcing welfare recipients to prove they don’t owe a debt rather than DHS having to prove they do. Singh noted that letter recipients had been asked to provide bank statements and pay slips from employers dating back to 2010. Many had been unable to, as their previous employers no longer existed. Renée Leon retorted that DHS only seeks documents dating back seven years, and that anyone required to provide evidence from 2010 was likely first notified in 2016.
“Those individuals who may not have pay slips or be able to find bank statements or whatever, how can you prove that they owe anything?” Singh asked. “Are these debts provable without the welfare recipient’s bank statements and pay slips?”
“It’s an administrative decision, senator,” DHS acting deputy secretary of integrity and information Annette Musolino replied. “It’s made on the best information available. Information that the department has, what we have from the Tax Office, and anything the customer can provide to us to support that decision.”
Leon also admitted that people marked as vulnerable did receive letters of notice when robo-debt started, but that “they have since been excluded” and were now redirected to a pilot program involving staff assistance.
Several legal challenges to the robo-debt system are making their way through the courts. In February, Victoria Legal Aid filed a claim in the Federal Court on behalf of Madeleine Masterson, a Melbourne nurse contesting a $4000 robo-debt. Former Victorian chief crown prosecutor Gavin Silbert, QC, has drafted letters for people demanding evidence of their supposed debts. He argues Centrelink’s insistence on clients proving they don’t owe a debt breaches government agency obligations to act as model litigants.
“Centrelink have destroyed their records. By bullying people and making outlandish claims, they’re using that as a ruse to get people to provide them with documents they don’t have,” Silbert tells The Saturday Paper. “It’s bluff and bluster. A lot of these demands are made with a view to extracting bank statements and other information from people.”
Siewert believes the ongoing stories of people saddled with false debts have galvanised public opposition to the robo-debt scheme.
“The mood has definitely changed. Some time in the late noughties, the public feel for those on income support significantly improved,” she says. “There are a whole lot of people getting caught up in this who aren’t cheats; people’s family members, kids on Youth Allowance. I’ve had older people in tears because people think they’re cheats.”
Lyndsey Jackson is the chair of digital rights organisation Electronic Frontiers Australia. She built the #NotMyDebt website in 2017, collating and publishing the stories of people who believe they’ve been issued a false debt. She says that despite the negative headlines, there’s little sign Centrelink is slowing its debt collection.
“If anything, it seems to be ramping up. We’re seeing ‘zombie debts’ reappearing from a year ago, where it feels like another database has been data-matched by the algorithm and another tranche of letters goes out to people who thought their debt was settled,” Jackson says. “It sort of seems to be branching out further and further. If you were at uni five, seven, 10 years ago, start to be a bit concerned about whether or not this is going to come back.
“We have people not eating, not paying their rent, people who are scared their kids are going to be taken away, people who are terrified they’re going to jail because they made a mistake,” Jackson says. “And for so little money.”
Three days after the DHS figure – 2030 – was made public, Human Services Minister Michael Keenan issued a media release, which praised the fact people were on hold for an average of 15 minutes when they called Centrelink.
“In the last six months alone,” Keenan said, “call wait times have dropped by 45 seconds to an average of 15 minutes and 15 seconds, which shows that we are heading in the right direction.”
At time of press, Keenan had not responded to a request for comment.
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This article was first published in the print edition of The Saturday Paper on Mar 2, 2019 as "Kiss of debt".
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