In August 2017, when he was still treasurer, Scott Morrison scheduled a meeting with crossbench senator Pauline Hanson in which he planned to give her a presentation on, among other things, the welfare compliance measures known as robo-debt.
At the time, Hanson was blocking or threatening to block Coalition government legislation in the senate because of a “welfare handout mentality” and was advocating more cuts to the system.
Christian Porter, then Social Services minister, and his office requested a “set of one page slides on compliance measures” be turned into a single slide with all the same information contained within it.
“FYI, the request from the MO [minister’s office] suggests this single slide is for the Treasurer and will be used in a meeting he is having with Senator Hanson,” Department of Human Services acting deputy secretary Jason McNamara wrote on August 18, 2017, in a message to his boss, secretary Kathryn Campbell.
Morrison was not asked about this message at the royal commission this week. There was no speculation on whether he was using the illegal welfare program to win far-right support for his party.
The questions might have been waiting, but his evidence on Wednesday was so meandering, so filled with negative space, that it seemed, as in his career, deliberately calculated to avoid ever making, or agreeing to, a substantial point.
As such, there was no time for all the messy details. In many respects, this was vintage Morrison. The fault lay with others. He was merely a victim. It was “distressing”, he said, to have ended up there, in a tide of circumstance over which he, as a cabinet minister, apparently had no control.
“In my experience, that if there were any legal impediment to pursuing a course of action by the government, not only would it be noted in that [proposal] checklist, but it would be amplified in the document itself,” he said.
“And there was no such reference. And there never was. And in the ultimate cabinet submission ... that was guaranteed very clearly, that at no time was any legal advice or any legal position advanced to ministers that the program was unlawful.”
Except, of course, in the February 12, 2015, executive minute developed by DHS secretary Kathryn Campbell and her deputy, Malisa Golightly, which said legislative change was required.
This is the essential contradiction at the heart of the policy and Morrison’s role in its creation: How did it come to be that the obvious need for legislative change noted in the executive minute, signed by Morrison, disappeared in the two to five weeks between then and the new policy proposal itself?
“I had great confidence in my officials and I had every reason to have that confidence, I believe,” Morrison said this week.
The senior counsel assisting the inquiry, Justin Greggery, noted that “your belief was proved wrong, with history”.
“Unfortunately, yes,” Morrison said. “As I said, the suggestion to me that even internal department legal advice was not conveyed to ministers was unthinkable.”
Greggery shot back: “And yet it happened.”
Throughout the hearing, which lasted seven hours, Morrison was repeatedly pulled into line by both the senior counsel and Commissioner Catherine Holmes. His transgressions were diverse: he answered questions he thought were coming instead of the ones being asked; tried to argue the detail of the Social Security Act with Holmes; suggested Greggery was personally motivated or at least borrowing his line of questioning from the Labor Party; and frequently went on evidentiary detours to as far back as 1989.
At one point, after this pattern of Morrison-as-history-guide became apparent and he offered yet another example from the 1990s of data-matching – not income-averaging, which is at issue – Commissioner Holmes interjected: “Please don’t give us an example.”
Morrison claimed the brief that went to him in February 2015 contained “new elements” but “the fundamental proposition of using income averaging and automation for the purpose of identifying and raising debts was not new”.
Did this mean, Greggery asked, Morrison disagreed with what the Department of Human Services called “a new approach”?
“I think there were new features,” Morrison said. “The new approach, I think, related to the additional technologies now available and that this was being done at a scale not previously done.”
By the time the brief had become a new policy proposal, or NPP, reaching the Expenditure Review Committee (ERC) on March 25, it was the subject of a “Finance Green Brief” containing a checklist of features required by the budget process operational rules. The checklist, lifted directly from the NPP developed by the departments, had been completed: yes, a constitutional risk rating was done; yes, that constitutional advice from the Australian Government Solicitor was provided as required; no, the measure did not require legislation.
According to those budget rules, shown to Morrison on the stand, “all NPPs must include the following information … the proposed source of legislative authority for the expenditure (if required) as informed by legal advice from the Australian Government Solicitor as to whether primary legislation or an item in the [Financial Framework] regulations may be appropriate.”
Morrison said ministers had the AGS advice relating to constitutional risk, but there was no AGS advice provided to that ERC meeting about whether legislative authority for the measure was required.
In Morrison’s view, Greggery said, the answer of yes or no against the three elements of this checklist “is itself both the position and the advice”. This, at least according to Morrison, is why he never asked any other questions to square his earlier briefing about changes that would need to be made and the lack of action required on the checklist.
The final proposal included a now infamous phrase, indicating that there was “no change to how income is assessed or overpayments calculated”. This was categorically untrue, as many later external legal opinions would declare, but it was relied on by Morrison.
This week, the former prime minister argued that he was of the belief that income averaging had been happening for 20 years. He was unable to explain how he “knew” this was the case in 2015, however.
“Do I take it from your answer, that the practice of averaging was not referred to in any of the written briefings that you received?” Greggery asked.
No, Morrison said.
“And in terms of the oral information that you received, you can’t identify who gave that to you?” Greggery pressed.
Morrison said: “No, because there were many discussions. But it was just a foundational way of the way DHS worked.”
Greggery continued: “And you can’t identify from which department that information emanated?”
“And in the context of that oral information you received, you don’t recall being provided with any documentary support for that discussion?”
“But it was this information that you say you had, about it being a long-time practice of the department, which led you to question whether there was anything new about the proposal in the executive minute other than the question of scale?”
“It was the information you’d received orally from someone you can’t identify, at some point in time you can’t identify, which led you to not be troubled by the assertion that it was new?”
Despite agreeing to go away after this hearing and provide any evidence he can to the inquiry about how he came to believe income averaging was a longstanding practice, Morrison later became angry at the line of questioning.
“You’re asking me to recall an oral conversation of seven years ago,” he said.
Greggery exploited this powerful man’s haplessness. “Do you appreciate,” he said, “the irony of the position that you are now in, having to recall events from seven years ago, to the position that this measure placed welfare recipients or former welfare recipients in, in having to prove evidence of fortnightly income from as much as six years earlier, in order to avoid the raising of a debt?”
Morrison said he could always go and get a bank statement, but he can’t do that with an oral conversation. Greggery pulled him up again on the bogus comparison.
“You’re, of course, comparing your position to someone who might have casual work, seasonal work, intermittent income, work for multiple employers, some of whom might no longer be operating businesses,” Greggery said. “You’re well educated. It might not be a big matter for you to get bank statements from years ago but as you identify, that wasn’t permitted in the early stages of the scheme.
“People had to find payslips. It presented some real challenges, didn’t it, to people who you’re asking this very high bar of?”
It did, Morrison said. “And that’s why,” he added, “I’m pleased that they altered the program.”
On Tuesday, Senator Marise Payne, who served as junior minister to Morrison around the time this proposal was concocted within her department, proved a more amenable witness. Although she was frequently unable to recall details of her time dealing with the robo-debt scheme’s embryonic stages, she was clear and direct in her answers.
“Essentially,” she said at one point, “responsibility is always borne by ministers.”
Still, the points Payne made were broadly similar to Morrison’s. “It’s not clear to me at all from this material – and I do not recall being the recipient of any brief on this matter – that there was ever specific advice provided to ministers, who, as I said, are ultimately responsible, but must receive advice from their departments,” she said.
Both former ministers were shown excerpts from the Department of Finance “Greens” prepared for the March 25 Expenditure Review Committee, in which the agency refused to agree to the proposal, querying whether the net savings of $822 million would even be achieved. It added that: “The recovery by DHS of incorrect payments made in 2010 needs to occur during 2015-16 in order to avoid the statute of limitations applying to the collection of debts arising from those payments.”
Neither Payne nor Morrison asked for any further advice on what this meant, and Payne said she could not recall whether it had ever come up before or since.
Towards the end of Morrison’s evidence, Greggery put seven “propositions” to him about how the budget measure came to be implemented without the department drawing to his attention the damning legal advice it had prepared in late 2014.
The first was that Morrison simply did not ask for it when he had the opportunity to do so. The second was that the window between the brief and the new policy of at most five weeks didn’t allow time to seek legal advice. The third was that legislation couldn’t “practically” have been passed prior to the measure’s start date on July 1, 2015. The fourth was that the senate was not an easy place to pass such legislation anyway. The fifth was that he “had communicated a policy position prior to receiving the executive minute, on the radio, which used strong language about welfare reform and cracking down and dealing with fraud”. The sixth was that the matter had “real attraction” to Morrison “because of its significance as a savings measure towards a balanced budget”. The seventh, finally, was that the issue of statute of limitations of old debts identified by Finance only served to increase the “urgency” of forging ahead.
“Had that [legal] advice come forward, I sincerely believe we would not be sitting here today,” Morrison said, adding that if legislation were required it is “likely” they would never have pursued the measure.
Morrison’s evidence was starkly different to another witness who faced the royal commission this week, an unassuming woman by the name of Colleen Taylor. Taylor was a career public servant who began her working life in 1984 and became a Centrelink compliance officer, now retired.
Despite being older than almost any other witness at this inquiry, she has not been troubled by unexplained memory loss.
She reported her concerns about robo-debt to her team, then her local boss, throughout 2016. Finally, in early 2017, she reported them to DHS Secretary Kathryn Campbell. The explanation for her alarm was detailed, urgent and correct.
“I mean, if you know there’s no debt and you’re sending out a debt notice expecting them to pay that back, how is that not stealing, is the way I saw it,” she said on Tuesday.
“And particularly as we were a compliance unit. The whole point of our unit was to make sure that people were doing the right thing. And here we were doing the wrong thing.”
Campbell had all of this, in her email, seven months before Scott Morrison went looking for updates to sell to Pauline Hanson. Robo-debt ran for almost another three years.
This article was first published in the print edition of The Saturday Paper on December 17, 2022 as "Morrison and Porter sought robo-debt advice to woo Hanson".
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