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Commissioner Catherine Holmes has written to the attorney-general to ask that her findings be delivered after the National Anti-Corruption Commission is operational, so she can make direct referrals. By Rick Morton.

Exclusive: Robo-debt findings delayed to allow NACC referrals

Commissioner Catherine Holmes during a royal commission hearing.
Commissioner Catherine Holmes during a royal commission hearing.
Credit: Royal Commission into the Robodebt Scheme

Robo-debt royal commissioner Catherine Holmes requested a one-week extension to the inquiry’s reporting date so she can make referrals directly to the new national corruption watchdog, which does not begin operating until July 1.

In the letter sent by Holmes to Attorney-General Mark Dreyfus asking to push back the June 30 deadline by a matter of days, the former Queensland chief justice noted she was unable to refer suspected or potential corruption to the National Anti-Corruption Commission (NACC) because it would not exist until a day after the report was meant to be handed to government.

This was the only reason given for Holmes’s request, which was subsequently granted by Dreyfus. The Royal Commission into the Robodebt Scheme will now hand its final report to the Albanese government on July 7.

Although Holmes did not disclose if she would be making referrals to the NACC, there is technically nothing stopping her from noting her concerns about potential corrupt conduct and recommending referrals be made to relevant bodies. Her move will ensure any such referral is actually made and carries the weight of an entire royal commission.

“To me, this shows you how serious she is,” a source familiar with the matter tells The Saturday Paper. “The commissioner is nailing down every last element of this inquiry.”

On Wednesday, Holmes updated non-publication orders for the royal commission to prohibit mention of any notices of potential adverse findings or potential referrals that may have been made and sent to affected people. Royal commissions are required, as a matter of law and procedural fairness, to give notice to people about whom such findings are likely to be made.

The Saturday Paper understands at least some of these notices have been sent to people who have featured at the hearings of this royal commission.

Critically, legislation for the NACC, which received royal assent on December 12 last year, is retrospective and contains a deliberately broad definition of corruption.

Under its key provision, section 8, corrupt behaviour includes acts by people, whether public officials or not, that “adversely affect … the honest or impartial performance of any public official’s functions or duties as a public official”.

The section also calls out “any conduct of a public official that constitutes or involves a breach of public trust [and] any conduct of a public official that constitutes, involves or is engaged in for the purpose of abuse of the person’s office as a public official”.

Additionally, corruption also includes “any conduct of a public official, or former public official, that constitutes or involves the misuse of information or documents acquired in the person’s capacity as a public official”.

In a single, explosive opening address last October, senior counsel assisting the royal commission, Justin Greggery, KC, revealed the Department of Social Services had legal advice as early as October 2014 that unequivocally showed the robo-debt scheme was not legal. It began seven months later.

Throughout nine weeks of public hearings and more than a million documents, 900,000 of which were produced by the Commonwealth, Commissioner Holmes heard testimony of a years-long and elaborate cover-up by two sister departments that prolonged the misery of illegal debt collection, deliberately misled the public and other officials, including the Commonwealth Ombudsman, and, in the case of ministers, saw the weaponisation of private Centrelink records and a statement under oath that cabinet solidarity required lies to be told.

Time and again Greggery made references to the reckless, and possibly deliberate, indifference of key players who were warned by whistleblowers, advocates and concerned staff that something had gone horribly wrong.

In submissions by the Commonwealth to the inquiry, Dominique Hogan-Doran, SC, asked that the royal commission downgrade the expert report of former departmental secretary and public service commissioner Andrew Podger to that of “submission” – meaning it could be considered but the commission was not obliged to take any particular note of it.

That report, which was ordered by the commission to look at structural and cultural issues related to the Australian Public Service at the time of robo-debt, was criticised by administrative law experts and advocates as being tepid, recommending more training for senior managers and changes to guidelines and protocols.

Even so, the Commonwealth is anxious that the report will be given too much weight.

“The Commonwealth submits that in considering what weight to attribute to Professor Podger’s report, the Commissioner would have regard to … the largely abstract nature of his opinions, noting the facts assumed are not described [and] the absence of an expressed connection between those opinions and the evidence of the design and implementation of the Robodebt scheme before the Royal Commission,” the submission says.

Further, the Commonwealth maintained a report by Deloitte Risk Advisory’s Dr Elea Wurth, prepared for the inquiry, did not consider documents provided by Services Australia in relation to the later iterations of the robo-debt scheme.

The Commonwealth urged strict commitment to the principles of procedural fairness, which has been “complicated by the dynamic and fast-paced nature of the inquiry”.

“In particular, the Commonwealth notes that in the course of the public hearings in this Royal Commission, a great many individuals have been questioned about their personal roles in the establishment, maintenance, oversight, and ultimately decommissioning of the ‘Robodebt scheme’ (as defined in the Amended Letters Patent),” the Commonwealth says.

“The Commonwealth anticipates that the Commissioner may be inclined to make findings and/or recommendations that relate specifically to those individuals – for example, a finding that Person A had a state of knowledge concerning the unlawfulness of the Robodebt scheme at a particular time, or a recommendation that Person B’s actions be further investigated by another body.”

The Commonwealth’s senior counsel was particularly concerned that any public servant against whom findings might be made would be notified ahead of time, with ample space to respond.

One of the questions at the heart of this royal commission is how much of robo-debt was new policy and how much was an evolution of past practice. The fact the program itself morphed from a “manual” pilot, through several iterations before becoming robo-debt, has often been touted as evidence the government wanted to fix its mistakes.

That is not the view of senior experts who have also made submissions to the inquiry. After all, every single iteration of the robo-debt scheme was built from the ground up on the illegal use of income-averaging to raise debts.

“The creators of the Robodebt Scheme relied on unproven workforce and debt modelling which was premised on high levels of averaging,” Dr Darren O’Donovan, a senior lecturer in administrative law at La Trobe Law School, wrote to the royal commission.

“The assumptions contradict directly later public defences which presented averaging as an unfortunate or unexpected anomaly resulting from people’s ‘non-engagement’ with the system.

“To the contrary, the lifetime of this programme underlines that its debt raising was rendered ‘economic’ only through reliance on averaging. The allocated workforce could not possibly cope with high rates of document submission or individualised analysis of cases.

“Despite the subsequent political rhetoric, averaging was an expected, designed feature of this scheme.”

University of Western Australia’s Professor Elise Bant – who studies corporate fraud and whose work was cited by Victorian and Western Australian royal commissions into Crown casino operations – wrote to the robo-debt inquiry to make a clear and unvarnished statement about culpability.

“The government knew the inherent (harmful) incidents of the Robodebt scheme and intended that conduct,” she wrote.

“The analysis also provides strong support for the view that the purpose of the Robodebt scheme was not to ‘recover’ overpayments, but to raise ‘fresh’ money from social security recipients to deploy for other, government purposes. This conclusion is open from objective assessment of the most basic outline of the scheme.

“Absent proof of relevant mistake or similar … neither a corporation, nor a government, can sleep-walk a system of conduct.”

Bant’s model of “systems intentionality” is a remarkably simple instrument used to establish corporate “states of mind” or, in this case, the knowledge of an entire government: they get what they want by deploying specific “systems of conduct”. Bant uses the example of a recipe being a system of conduct for making a cake.

“It sheds considerable light on the Government’s intention and knowledge manifested through the robodebt scheme,” she says.

“From these building blocks it is possible to understand the government’s level of culpability as being of the most significant, and egregious, kind.”

Certainly, voluminous testimonials provided by the Community and Public Sector Union, in addition to the evidence its officials gave on the stand during hearings, seek to establish a pattern of deliberate ignorance from the top down.

Front-line staff knew the program was most likely illegal and morally indefensible but if they raised these concerns they were told to leave, were moved to other projects or teams or bullied out of the then Department of Human Services entirely, the union says.

“I undertook initial testing in 2014 and we told them at the first instance that the system was flawed,” a staff member told the union.

“They did not care and they would not listen. Staff feedback [was given] at every opportunity and we were silenced and pulled into one-on-one [coaching sessions] telling us that we would do the work or we should look for new jobs, no one was forcing us to stay.

“The more technical you were the less you felt wanted, they would just hire labour-hire staff who would do as they were told.”

Scores of accounts detailed the vicarious trauma of dealing with robo-debt victims, who were pushed to the brink of survival, and in some cases, beyond.

“Lots of sleepless nights after speaking to customers who had been affected,” a public servant said.

“One poor woman who had cancer and never worked the whole time on benefits (and we had proof of this on system before debt was raised), was in tears when her debt was wiped. She paid it as she was too sick dealing with her cancer to even fight it.

“So many stories like this, that made me feel sick to my stomach. When we raised the issue time and time again we were called ‘trouble makers, wrecking balls’, and asked why can’t we just do as we are told, why do we have to keep bringing this up and bringing the whole vibe of the team down.”

With the final report now due in less than six weeks, this is not the end of the robo-debt failure. Experts such as O’Donovan are convinced there are still some debts that involved the illegal use of income-averaging and which have never been wiped or paid back. The department, he wrote, has never revealed how widespread the practice was.

“Quite rudimentary principles of administrative law applied here, and only detailed and specific legislative language could have sanctioned a robodebt approach,” he wrote. “The statute did not permit uncertainty to be answered by disregard.”

The robo-debt royal commission said it would not make any further comment about the extension to its reporting deadline.

This article was first published in the print edition of The Saturday Paper on May 20, 2023 as "Exclusive: Robo-debt findings delayed to allow NACC referrals".

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