Serena Wilson paused for a long time before answering in a quiet voice: “Yes, I think you’re right.”
Wilson had made the dramatic concession in response to senior counsel assisting the royal commission into the robodebt scheme, Justin Greggery, that she knew the Coalition government’s welfare debt recovery program was operating unlawfully and that: “I took no steps to stop it.”
Now long retired, Wilson was a senior official in the Department of Social Services, one of six deputy secretaries, and she had seen a summary of damning 2014 legal advice that indicated what became the robodebt program was unlawful.
The scheme led to a $1.8bn settlement between the commonwealth and hundreds of thousands of victims sent unlawful welfare debts. It is now the subject of the royal commission.
“Now I’m ashamed, and in hindsight, I could have spoken up,” Wilson said.
With her frankness in the witness box – she said she lacked “courage” and accepted breaching the APS code of conduct – Wilson’s admission offered an explanation to a question essentially put by Greggery and the commissioner, Catherine Holmes, several times over the past two weeks: how could this happen?
Central to the commission’s investigation is how a proposal that one government department thought might be unlawful could be included in the 2015 budget and then implemented? And, given crucial moments in 2017 and 2018 when officials were confronted with the possible reality of their shaky legal position, how the scheme continued until November 2019.
For some time, and particularly before it was wound up, the robodebt scandal was presented as portending the risks of automation and of an ideological desire to demonise welfare recipients. And it did.
In fact, among the then secret briefs raised with ministers at the time and aired this week was a “taskforce” pitched as warning supposedly fraudulent welfare recipients: “You’re next”. On the day of a key meeting between then minister Scott Morrison and his top officials, he’d expressed desire to be a “welfare cop”.
But the commission’s first two hearings these past two weeks have also raised direct and distinct questions about integrity. Whether a “stuff up”, or “conspiracy” or, as Holmes asked, “a conspiracy to conceal a stuff up”, remains to be seen.
Public servants knew there were problems
The significance of what became the robodebt scheme – being “unethical” and its potential unlawfulness – was not lost on the policy and legal experts working in the public service. They had noticed from day one in late 2014, and some put their warnings to paper. The commission is tracking how far up the chain the paper was passed.
Wilson’s boss, Finn Pratt, the former secretary of Department of Social Services, insisted those warnings never reached him. While saying he was not shirking responsibility (his department was responsible for social security law) Pratt emphasised the scale of his role, covering multiple policy areas and with new initiatives in childcare and disability policy. He noted pointedly that his department was at its height responsible for about a third of all government spending. He defended Wilson as a fine public servant, but said he relied on her to advise him.
Invoking the fact the robodebt scheme was administered by the Department of Human Services, now known as Services Australia, he said, memorably: “This was one headache which wasn’t my headache.”
Implicitly, Pratt put the ball in the court of Kathryn Campbell. For many, Campbell has become the bureaucrat most associated with the robodebt scheme.
In 2017, at the initial height of the scandal, she defended robodebt in Senate estimates as the secretary of the Department of Human Services. She took a few swipes at the media. Later that year Campbell took over from Pratt as secretary of DSS.
Even after the scheme was wound up, Campbell sparred with senators over the language used to describe its unlawfulness. She favoured “legally insufficient”.
In the witness box, Campbell was more muted. But even as she was making concessions, she was particular about the language. She would not accept, as federal court justice Bernard Murphy had said and Greggery put to her, twice, that the scheme was a “massive failure of public administration”. Campbell insisted on “significant”, not massive.
Legal warnings made it to Morrison
As the inquiry heard, it was Campbell’s department that was responsible for the administration of social security policy. This included ensuring whatever the department did, such as how it raised welfare debts, was legal.
After meeting with the then new social services minister, Morrison, in late 2014, Campbell worked on an executive minute for Morrison with one of her deputies, Malisa Golightly. The executive minute has long been sought by robodebt observers and was revealed for this first time this week.
Morrison had asked for some proposals around welfare compliance. In the resulting minute, signed by Morrison on 12 February 2015, there is specific reference to the use of ATO data for debt compliance measures that became the robodebt scheme and, importantly, an acknowledgment that DSS said such a plan would need legislative change. The document authorised the departments to come back with policy proposals that could be considered and then implemented in the budget.
Campbell accepted that, given what the minute said, she was aware of DSS’s position: that the proposal that became robodebt would need law change to be legal.
From this crucial point in February, Campbell said the process to craft the policies and finalise them carried on without her involvement. It was presumably being worked through between her department and DSS.
She said she did not see the new policy proposal documents – either the drafts or final version – so she did not know how these “landed”.
Greggery asked how she thought the scheme was operating legally when it was properly launched at scale in 2016 by her department. She said she had not turned her mind to the issue, but that it was DSS who had been handling it.
“In the absence of positive knowledge [the scheme] was lawful, you assumed it was despite the earlier advice?” Greggery asked.
Campbell replied: “I did.”
She added: “In hindsight it was a big assumption to make … There were many decisions, many programs, that we delivered on behalf of other agencies. I relied on other agencies giving policy advice … Of course it would have been preferable to have sought external legal advice.”
Questions remain over 2015 proposal
March 2015 appears to be a crucial period under investigation by the royal commission. By 2 March 2015, a version of the policy proposal was sent to lawyers at DSS. It noted there was no need for legislative change, and that raised alarm bells with officials.
How the acknowledgment for legislative change had dropped off the proposal remains unclear.
The royal commission has heard that over two days in March, the same DSS lawyers who warned against the idea in 2014 were reiterating legal concerns and raising new ones. They were racing the clock as the proposal had to be submitted to the Department of Finance for costing. The welfare compliance measures were taken into the budget process because Morrison was keen on it.
Again, what officials at DHS did with the legal warnings remains a mystery.
Pratt says he never saw the robodebt proposal and was generally not made aware of the robodebt issue until 2017 when it became a media story and the then minister, Christian Porter, rang to ask words to the effect of: “What the hell is all this?”
Wilson, for her part, said she only realised the unlawful “income averaging” method used in robodebt was occurring in 2017. Before that she thought the idea had been “killed”. She claimed DHS deputy secretary Golightly had assured her the “income averaging” was not being used. Golightly was her direct counterpart. She has since passed away.
As she faced increasingly pointed questions from Greggery over what she did with her understanding of the potential legal consequences of what became robodebt in early 2015, Campbell said: “I accepted the advice and passed it to the minister [Morrison].”
Greggery replied: “It sounds as though you are also passing responsibility to the minister, rather than bearing it yourself.”
Campbell denied this. She will return to the witness stand on 5 December.
The royal commission continues.
