The federal government paid the contractor Infosys $191m for an automated welfare payment calculator that only processed 784 claims for one type of payment during a trial before it was abandoned as a failure.
The “entitlement calculation engine” was supposed to help Centrelink determine how much welfare recipients should be paid, based on their individual circumstances. It was one part of a much larger effort to overhaul Centrelink’s payment infrastructure.
The contract was awarded in November 2019 by the then minister for government services, Stuart Robert. The money was subsequently paid over four years in instalments of $23m, $44m, $67m and $57m.
The project was paused on two occasions. The first in December 2020, when the company and Services Australia realised it was more complicated than expected. The second, in late 2022, came after Services Australia took over management of the program from Infosys.
By that stage, the system was already operating in “shadow mode” alongside Services Australia’s existing systems, as first reported by ITnews, which has covered the contract in detail for many years. Shadow mode is when software is tested alongside existing systems, before they are replaced.
In late June, Services Australia confirmed the calculation engine had processed only 784 claims, more than three years after the project started. Those claims related to aged care.
Government officials had earlier told Senate estimates that it expected the system to eventually process around half of Centrelink’s payments.
The government services minister, Bill Shorten, abandoned the contract in late July and said the government could not keep throwing money at a program that was of limited use.
“Infosys could not deliver a new entitlement calculation engine for all social security payments as originally envisaged,” a spokesperson for Shorten said.
“Under a very reduced scope contract, they delivered a single payment type but it wasn’t fit for purpose going forward so Services Australia stopped the program and has had to write off the asset.
“Services Australia is now analysing learnings and considering next steps.”
An Infosys spokesperson told Guardian Australia it was awarded the contract after “a 14-month-long stringent government procurement process”. They said some of its work on the calculator informed a similar tool now being used in the aged care sector.
The spokesperson said it had demonstrated the system could “calculate entitlement payments accurately in preparation for moving into live operation” before the project was ceased.
“We are proud of the work we do for the government of Australia and other Australian clients, and we are committed to the highest level of compliance, integrity and ethical business practices across all markets in which we operate.”
The Greens senator Janet Rice said successive governments had “funnelled hundreds of millions of dollars of taxpayer money on technology that punished people on income support”.
“Automation has no place in our social security system, especially after robodebt,” she said. “Not only is it demonstrably cruel, but we now have almost $200m of public money wasted.”
Shorten’s spokesperson said the Infosys contract had been identified as warranting further investigation in a review by a former senior public servant, Ian Watt.
Watt was commissioned to investigate procurement processes leading to the awarding of contracts to lobbying firm Synergy 360, the company that reportedly was asked to send profits to a trust that Robert had part-owned, a parliamentary committee has heard.
Last month, the joint committee of public accounts and audit heard Infosys paid $16m to Synergy 360.
The Watt report identified 14 contracts with Services Australia that warranted “further investigation due to inconsistencies with the commonwealth procurement rules or good practice”, according to a statement by Shorten earlier this year. It is not clear why this particular Infosys contract was identified.
Infosys’ executive vice-president, Andrew Groth, told an inquiry hearing in June that his firm no longer engaged Synergy 360, had not been aware of anything untoward and that Synergy claimed it didn’t have to register as a lobbyist organisation.
“At Infosys our code of conduct, dealing with integrity, with transparency, is absolutely core to our business,” Groth told the inquiry. “That’s the way we operate. I’m not aware of anything that departs from that.”
Robert has denied any wrongdoing. He has previously rejected any “implied imputation” that he had influenced procurement, declaring he had “zero involvement” and that departmental procurement was conducted with the “highest levels of probity”.
Robert has also said he had never “part-owned any company that ever received anything from Synergy 360”. He has also said it was “patently incorrect and outrageous” to suggest any money had been sent to any company he part-owned.
