A senior public servant who was given damning legal advice for the Robodebt scheme has told a royal commission she breached her code of conduct by doing nothing to stop it despite knowing it was illegal.
Day eight of the commission, before Catherine Holmes, heard from Serena Wilson, the former deputy secretary at the Department of Social Services (DSS), which was responsible for getting legal advice on behalf of the Department of Human Services (DHS) for the welfare debt recovery scheme.
The inquiry heard Ms Wilson received legal advice when the scheme was being designed showing the "income averaging" method was unlawful but she lacked the "courage" to tell anyone, including then-social services minister Scott Morrison.
Ms Wilson told the inquiry she was "consumed" with other government "priorities" at that time.
In the hearing on Wednesday, Counsel assisting the commission Justin Greggery KC put to Ms Wilson that because of this, she "disregarded the consequences of the unlawfulness" of the scheme.
"You knew it was unlawful, you knew averaging was unlawful and you did nothing, correct? You took no steps to stop it," Mr Greggery said.
"I took no steps to stop it," Ms Wilson replied.
'You were in a position to do something as deputy secretary of the relevant department," Mr Greggery said.
"Yes … I took no action," Ms Wilson replied.
Mr Greggery said: "You could act consistently with the code of conduct which applies to you as an Australian public servant and give full and frank advice or you could go down the road of doing things, taking steps which ensured the continuation of what you then believe to be unlawful."
"I could have done something then … I wish I had," Ms Wilson said.
Mr Greggery interrupted: "You were duty bound to … you were supposed to act with integrity … with honesty."
"You breached the code of conduct by your deliberate choice," he said.
After a long pause, Ms Wilson admitted she had.
"I could have acted but I didn't," she said.
Mr Greggery said: "That means that you did that with actual knowledge of the consequences of the raising of unlawful debts on a large scale."
Ms Wilson: "I took no action."
Mr Greggery told the inquiry it was Ms Wilson's responsibility to ensure "unlawful proposals were prevented from being advanced to the minister".
"It's your responsibility isn't it … as the deputy secretory to ensure proposals which are neither supported in law or policy don't get some traction?" Mr Greggery asked Ms Wilson.
"In hindsight, it was my responsibility to ensure that the department that was briefing the minister was sufficiently reflecting those concerns," Ms Wilson replied.
'I thought we killed it'
Mr Greggery told the commission Ms Wilson met with then-minister Morrison in 2015 but did not raise her concerns with him.
Ms Wilson said she had no recollection of the meeting.
Ms Wilson said she thought they had "come to an understanding" that what became Robodebt – in particular, the income-smoothing or averaging method – would not go ahead.
She said she "believed at the time" that Mr Morrison had been told the use of "data to calculate entitlement and as the basis for raising debts would not proceed".
"I thought we'd killed it.
"In hindsight, I was clearly wrong."
Mr Greggery asked why Ms Wilson did not do more to stop the scheme from progressing, knowing it was unlawful.
"Did you … say as a deputy secretary – this is unlawful and this is against policy and it needs to stop?"
"No I didn't," Ms Wilson replied.
"Why not?"
"I find it hard to explain now," Ms Wilson said.
"What's your best effort?"
After a long pause, Ms Wilson replied: "Lack of courage.
"I had been assured, immediately after the measure was implemented, that income smoothing was not occurring," she said.
Mr Greggery asked: "You say … lack of courage was one of the reasons you didn't speak up … was there something you were fearful of?"
"My gut was telling me something was wrong," she replied.
Mr Greggery said: "Well, you had legal and policy advice, it wasn't a matter of intuition or guess work, was it?"
"No."
"Was it something you were fearful of or troubled by?" Mr Greggery asked.
"My secretary had changed and I had a different relationship … with Ms [Kathryn] Campbell," Ms Wilson said.
"Were you fearful of her?" Mr Greggery asked.
"It was a less warm and mutually respectful relationship … it was [a] more authoritarian environment, I found it a difficult period," Ms Wilson said.
She told the commission she was "ashamed" and "in hindsight" she should have spoken up.
Ms Wilson also described "role confusion" between the responsibilities of the DHS and DSS.
Commissioner Catherine Holmes told Ms Wilson: "You seem to be speaking in code, almost."
"You're saying that DHS were encroaching on DSS's jurisdiction?"
"That's how it looks in hindsight to me, Commissioner," Ms Wilson replied.
