The robo-debt royal commission has found the scheme was sustained by ‘venality, incompetence and cowardice’. By Rick Morton.
Robo-debt royal commission ends in criminal referrals
Scott Morrison. Kathryn Campbell. Alan Tudge. Stuart Robert. Malisa Golightly. Annette Musolino. Serena Wilson. Mark Withnell. Paul McBride. Emma Kate McGuirk.
These are the names of the politicians and public servants who lied, dissembled or participated in the active cover-up of a multibillion-dollar fraud carried out against more than 400,000 disadvantaged Australians, motivated by “venality, incompetence and cowardice”.
After almost a decade of deceit, the robo-debt royal commission, led by former Queensland Supreme Court chief justice Catherine Holmes, found all of these people were complicit in one of the most shameful chapters of Australian government history.
The royal commission will make some referrals to the Australian Federal Police, the National Anti-Corruption Commission and professional conduct bodies for public servants and practising lawyers.
Commissioner Holmes said the section containing these names was sealed as a means of holding individuals to account, noting she was “truly dismayed” at the revelations of “dishonesty and collusion” that were used to prevent the illegal status of robo-debt becoming public.
What Holmes has found is simple and devastating.
Robo-debt was born in the depths of the Department of Human Services and it was brought into the world by Scott Morrison as Social Services minister. Morrison “allowed Cabinet to be misled” following the sudden removal of language from a February 2015 brief that warned legislative change was required.
It was Morrison’s pathological incuriosity that allowed cabinet to be deceived.
“Mr Morrison allowed Cabinet to be misled because he did not make that obvious inquiry,” Holmes’s report says. “He took the proposal to Cabinet without necessary information.”
Mark Withnell, the Department of Human Services integrity branch general manager, “engaged in deliberate conduct designed to mislead Cabinet” as did his superiors up the chain, including deputy secretary Malisa Golightly, now deceased, and Secretary Kathryn Campbell.
Campbell, in fact, is implicated at every stage of the robo-debt saga. Not only did she know the scheme always contemplated the use of income averaging, which advice said was illegal, but she also took steps to prevent external legal advice from being sought while she was on leave. That advice was sought by acting secretary Barry Jackson.
“The Commission finds that Ms Campbell instructed DHS officers to cease the process of responding to Mr Jackson’s request for advice, motivated by a concern that the unlawfulness of the Scheme might be exposed to the Ombudsman in the course of its investigation.”
Critically, the commission also found it was Kathryn Campbell who ordered a $1 million report from consultants PwC not be released.
“The Commission concludes that Ms Campbell made the decision that it should not be finalised and delivered to DHS,” it says.
“The rational inference is that although the report was contracted for and all but finalised, Ms Campbell formed the view that its detail as to the deficiencies of the Scheme was damaging and that it would be better for the department’s reputation, and her own, if it were not produced.”
Similarly, the chief counsel for the Department of Human Services, Annette Musolino, played along in a game of hide-and-seek with the provision of external legal advice, blocking attempts to settle the question properly.
She did this “because she knew that DHS executives, particularly Ms Campbell and Ms Golightly, did not want to be told they should seek independent advice because of the likelihood of its confirming that income averaging was unlawful and the professional consequences that they would face in that event”.
Critically, Commissioner Holmes pinpoints the beginning of 2017 as the event horizon beyond which ministers and public servants could not escape the “unfairness, probable illegality and cruelty” of the scheme that had by this point been operating for almost two years.
This is the moment, she says, that these features of robo-debt “became apparent”.
“It should have been abandoned or revised drastically, and an enormous amount of hardship and misery (as well as the expense the government was so anxious to minimise) would have been averted,” she says.
“Instead, the path taken was to double down, to go on the attack in the media against those who complained and to maintain the falsehood that in fact the system had not changed at all.”
These findings put then Human Services minister Alan Tudge and his office in the frame for a significant failure of leadership but also capture the tail end of Kathryn Campbell’s tenure as secretary of the Department of Human Services, before she moved to lead Social Services.
Tudge, Holmes found, was motivated by a desire to “save face” both personally and on behalf of the government. He wanted to “minimise public embarrassment” after he had publicly trumpeted the new-era of debt compliance when he became minister the year before.
Holmes found he abused his power in the role.
“As a minister, Mr Tudge was invested with a significant amount of public power,” the report says.
“Mr Tudge’s use of information about social security recipients in the media to distract from and discourage commentary about the scheme’s problems represented an abuse of that power.
“It was all the more reprehensible in view of the power imbalance between the minister and the cohort of people upon whom it would reasonably be expected to have the most impact, many of whom were vulnerable and dependent on the department, and its minister, for their livelihood.”
At the same time, Christian Porter, who was then Social Services Minister, did nothing to check whether this scheme was operating as it was intended.
“Mr Porter could not rationally have been satisfied of the legality of the Scheme on the basis of his general knowledge of the [new policy proposal] process, when he did not have actual knowledge of the content of the NPP, and had no idea whether it had said anything about the practice of income averaging,” the report says.
Around this time, there was also a concerted effort in Porter’s department, by Emma Kate McGuirk, Serena Wilson and other officials, to engage in “deception of the Commonwealth Ombudsman” who had launched an investigation into robo-debt.
The result of this deception was to trick the Ombudsman into believing there was legal advice that declared all was okay with the scheme. It was Wilson’s idea to withhold the original legal advice, which declared the policy illegal and, when this option was overruled, the trio worked to come up with another plan to get around their predicament.
That plan was to engage the same in-house lawyer, Anne Pulford, to write new advice that came to a different conclusion.
“The Commission is satisfied that Ms Pulford’s advice was influenced by pressure placed upon her by Ms McGuirk,” the report says.
Robo-debt continued with minor revisions because the deception of the Ombudsman was so convincing it gave Alan Tudge political cover, and an independent report, behind which he could stand.
When Stuart Robert was appointed minister for Government Services, he was briefed on a Federal Court of Australia case concerning a robo-debt victim in which the Australian Government Solicitor had provided draft legal advice warning the scheme was almost certainly not lawful.
Robert denies being briefed on this advice in June 2019, but the royal commission does not believe him. This poses a significant problem for the former minister because it was another five months before the opinion of the solicitor-general was sought. This was the definitive, scheme-killing legal advice.
Why was there such a long wait? Officials argue it was simply a long process.
“In the Commission’s view, none of this justifies the five-month delay in preparing and delivering the brief,” the report says.
“The question that needed answering was a simple one – was the use of averaging to determine social security entitlement lawful? It should not have taken almost half a year for the question to be asked.”
The Albanese government has asked Department of the Prime Minister and Cabinet secretary Professor Glyn Davis, Attorney-General’s Department secretary Katherine Jones and the Australian Public Service Commissioner Dr Gordon de Brouwer to “lead the development” of advice in response to the report’s recommendations.
It has gone a step further in responding to the adverse findings against individual public servants. The Public Service Commissioner, who would ordinarily investigate if bureaucrats breached conduct codes, will delegate his powers to an independent reviewer, a former commissioner, Stephen Sedgwick, who will himself be supported by a taskforce set up within the APS Commission. Sedgwick will decide on breaches but will not get to choose what sanctions apply.
On Friday, after the report was released, Minister for Government Services Bill Shorten, who lobbied for and won the establishment of the inquiry, said the story of robo-debt was one where “previous government and senior public servants gaslighted the nation and its citizens for four-and-a-half years”.
“They betrayed the trust of the nation and its citizens for four-and-a-half years with an unlawful scheme which the Federal Court has called the worst chapter of public administration,” he said.
Prime Minister Anthony Albanese thanked Commissioner Holmes “for exposing in such a direct, clear way, the human tragedy that this represented”.
“My government will be committed to not just putting this report on a shelf but making sure that it can never happen again and making sure that the government responds in an appropriate, ordered and considered way,” he said.
A starting point, beyond wholesale renovation of the Australian Public Service, is the proper funding of community legal aid centres. As the commissioner notes, the litigation in two cases that preceded the scheme’s ending was conducted by Victoria Legal Aid “and played a crucial role in the demise of the scheme”.
“It succeeded in exposing the illegality of robo-debt where other possible forms of check on the Scheme – the Administrative Appeals Tribunal, the Commonwealth Ombudsman, the sound advice of some lawyers – did not or could not,” the report says.
In her closing remarks, Commissioner Holmes said the “disparate and unsatisfactory answers” to the question of how robo-debt was conceived and delivered “would have the makings of a child’s nursery rhyme if it were not so serious”.
“It was extraordinary that a program with an unlawful aspect could be passed through Cabinet, but even if that obstacle had been recognised and legislation passed to authorise averaging as it was used in the scheme, it would still have been problematic,” she writes.
“At the least, I am confident that the Commission has served the purpose of bringing into the open an extraordinary saga, illustrating a myriad of ways that things can go wrong through venality, incompetence and cowardice.”
Holmes “reluctantly” recommended against a compensation scheme because it would be simply unworkable. A better use of the money, she said, would be to raise the rate of income support payments from the Commonwealth.
“The evidence before the commission was that fraud in the welfare system was miniscule, but that is not the impression one would get from what ministers responsible for social security payments have said over the years,” she said.
“Anti-welfare rhetoric is easy populism, useful for campaign purposes. It is not recent, nor is it confined to one side of politics, as some of the quoted material in this report demonstrates.
“It may be that the evidence in this royal commission has gone some way to changing public perceptions. But largely, those attitudes are set by politicians, who need to abandon for good (in every sense) the narrative of taxpayer versus welfare recipient.”
This piece was modified on July 11, 2023, to remove reference to Jonathan Hutson, Karen Harfield, Jason McNamara and Craig Storen among the names of officials implicated by the royal commission in the cover-up of robo-debt's illegality. The Saturday Paper apologises for the inclusion of their names. The piece was also modified to make clear that not all named individuals have had adverse findings made against them or are to be referred for further investigation.
This article was first published in the print edition of The Saturday Paper on July 7, 2023 as "Robo-debt royal commission ends in criminal referrals".
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