Warnings about legal and policy problems with the proposed Robodebt scheme were "watered down" in a brief being prepared for then social services minister Scott Morrison, according to evidence given to the Robodebt royal commission.
A copy of a draft executive minute, drawn up in February 2015 for Mr Morrison containing a watered-down warning, was made public at the commission of inquiry into the bungled Commonwealth scheme to recover Centrelink debts from welfare recipients.
The minute, which noted the need for legislative and or policy changes, had crossed out a phrase warning of the issues with the proposals and replaced it with the reference that they may have "significant implications".
The crossed-out phrase had flagged the "fundamental impacts" on social security policy and legislation, stating "it could be expected that some of the proposals will come under significant scrutiny as not being consistent with the overall beneficial nature of social security law".
A following phrase noted the "proposals will also need to be assessed in their consistency with the policy directions being pursued for all payments under welfare reform and the government's commitment to reduce regulatory burden".
Language made issues 'less obvious'
The draft was located by Deputy Secretary of Social Security Matthew Flavel in response to a request by the commission to find all relevant documents and emails relating to the Robodebt proposals.
Mr Flavel agreed with Counsel assisting the inquiry Justin Greggery KC that the document showed amendments made by "someone in DSS (Department of Social Services) in respect to the potential legislative consequences of some of the proposals".
He agreed that "the language has been in effect watered down from a very clear position that it would have fundamental impacts on social security and legislation to significant implications".
Asked who prepared the draft, Mr Flavel said he would "be staggered if it didn't come from DHS (Department of Human Services)".
He said he did not know "who actually [had input to] the document" and agreed the language made the issues with the income averaging proposal "less obvious".
The inquiry has previously heard that government lawyers had internal legal advice as early as 2014 warning of legal issues with the proposal.
Asked whether the senior person who sent the edit would have had knowledge of the 2014 legal advice, Mr Flavel agreed that "you could draw that conclusion".
Mr Flavel disagreed however with Mr Greggery's suggestion that the language "had the effect or was designed to have the effect that the minister would be more inclined to give the proposal his approval, as it reduced the potential hurdle of significance".
He also said he believed the use of the words "significant implications" as fundamental.
The inquiry before Catherine Holmes SC is examining how the scheme, which used tax office data and income averaging, was developed and implemented.
It was scrapped in 2019 after being found to be unlawful as a result of legal action undertaken by some of those targeted for debt recovery.
A class action by lawyers for those wrongly targeted for debt collection led to a settlement with the Commonwealth and the repayment of $721 million in recovered debts.
