Robodebt 2.0: Labor Moves to Hit Up the Unemployed for Debts Caused by Mismanagement

01/07/2022

Information on this page was reviewed by a specialist defence lawyer before being published. Click to read more.

The ultimate issue with Robodebt, the Coalition government’s illegal automated debt collecting scheme, was the resulting human cost, which involved harming many struggling to survive on the pittance that’s doled out as social security benefits, and in some cases, it saw recipients suicide.

Launched by then social services minister Christian Porter in July 2016, Robodebt, or the Online Compliance Intervention, saw the replacement of manual debt collecting with an automatic computer program that matched ATO and Centrelink databases to detect discrepancies in payment.

This system upped the previous annual 20,000 debt notices to 20,000 a week. But it soon became clear that it was resulting in false debts and, although its unsure how many can be attributed to the scheme, over 2,000 Robodebt notice recipients died over the 28 months to October 2018.

And it’s against this backdrop that new social services minister Amanda Rishworth announced on 16 June that her department is implementing a new debt collecting system because, due to Coalition mismanagement, 17 percent of JobSeeker payments over the last two to three years were incorrect.

So, despite highlighting its leader’s deep understanding of living on social security, the Labor cabinet considers, as government services minister Bill Shorten set out, it has “a responsibility to take steps to recover debts owing, and therefore, efforts to recover existing debts will need to recommence”.

Duty to collect and harm

“This looks an awful lot like Robodebt 2.0, because the problem with Robodebt was not the fact that they messed up the calculations,” said Antipoverty Centre spokesperson Kristin O’Connell, “the problem was with how it affects people’s lives when they are living below the poverty line.”

“On a very low income, they received a debt that they could not afford to pay,” she told Sydney Criminal Lawyers. “That has consequences, like people skipping meals, and we know from experience that sometimes they feel they had no option other than suicide.”

The social security recipient advocate set out that for decades successive Australian governments have used “aggressive debt collecting tactics in order to make budget savings off the poor”. And the fallout from Robodebt heightened the awareness around the harms of this practice.

As Rishworth pointed out, those currently on payments have been overpaid through no fault of their own, and whilst they’re surviving on below poverty line payments and trying to find a job, they’re to be hit up for this debt, some of which have been accumulating for three years.

Unemployment by design

In its budget forecasting, the Australian government uses the non-accelerating inflation rate of unemployment, or the NAIRU, which is a level of unemployment that’s necessary in order to avoid inflation. The Reserve Bank factors the NAIRU into its monetary policy settings.

So, according to this theory that government abides by, a certain amount of unemployment is desirable in order to keep the economy buoyant.

Yet, despite this factoring in of a necessary level of out-of-work constituents, successive federal governments have continued to keep the unemployment rate at a pitiful level, which currently sits at $321.35 a week, whereas the current poverty line is $609 a week for a single adult.

“Governments design unemployment into the system. They use unemployed people as economic fodder to keep down wages and ensure that they’re managing inflation,” O’Connell outlined.

“However, it doesn’t actually reflect the reality of what drives inflation. So, we have people being punished for something that’s not their fault,but is actually by design.”

Debilitating obligations

The Labor government is overseeing the implementation of a new points-based mutual obligation scheme for those on JobSeeker, which was crafted under Morrison.

The new Workforce Australia program involves a system of job seeking activities a welfare recipient must undertake in order to accumulate 100 points a month to ensure that they’re payments are not docked or cut off. But these schemes are known to act as a hinderance to finding work.

Employment minister Tony Burke has stated that despite advocates having called for the system to be scrapped or paused, $7 billion worth of contracts were finalised by the previous government, which necessitates its commencing on 1 July.

O’Connell, however, states that the minister is misrepresenting what has been asked for, which is a suspension of sanctions for at least three, if not six, months, as the evidence shows it takes time for people to understand such a system. Yet, Burke is only willing to allow a one-month grace period.

“We know that Labor support programs that force unemployed people to do activities that don’t help them,” O’Connell made clear. “But what he can do is something extremely simple, he can make sure that as a result of people having to learn a new system, they will not be penalised.”

“Dole bludger” bashing

Rishworth explains that the Albanese government has come to power only to find that the Coalition has mismanaged the welfare system so a large number of the over 805,000 Australians on JobSeeker have been overpaid, and, despite this being no fault of their own, they must pay it back.

But the obvious question is why the government continues to hound these people who are currently living way below the poverty line for relatively small amounts of overpaid money, when many of the richest citizens and one-third of big businesses avoid paying any tax at all.

O’Connell sets out a clear path that the government could take instead of shackling the unemployed with immediate debts, which would see them not having to pay them back until after they’re employed similar to student loans, and it could also correct its systems to avoid overpaying people.

The Antipoverty Centre spokesperson further outlined that the legacy of Robodebt is that the government unlawfully hurt many recipients who have never seen justice, despite a prominent class action, as it was settled out of court and therefore, the case against the scheme was never made.

“We will see some more of the same, in that we will see more people hurt by debt collection practices,” O’Connell warned in conclusion.

“But there is something that will be different about this. That is that we will not be able to find out at a later date exactly who was hurt, as these debts will presumably not be deemed unlawful.”