The tax office stonewalled questions from the media despite being aware the annual pay data it provided to the Department of Human Services for the robodebt program was “not fit for purpose”, a royal commission has heard.
Separately, on Monday, two Australian Taxation Office officials, Tyson Fawcett and Michael Kerr-Brown, told a royal commission they had concerns about the way the PAYG data was being used by the department once the robodebt scheme hit the headlines in late 2016.
Senior counsel assisting, Justin Greggery KC, said the tax office provided the PAYG pay data of Centrelink customers to DHS under a voluntary guideline, meaning it could have stopped doing so when it learned of problems with the scheme.
The royal commission has previously heard that Fawcett, director of data management at the ATO, fired off an email to DHS counterparts in early 2017 telling them to “cease and desist” until the tax office was assured the data was being used legally.
Appearing at the royal commission on Monday, Kerr-Brown said DHS officials had repeatedly insisted the PAYG data was being used as it had been previously.
“I was being given assurances they weren’t doing anything different with the data,” he said. “They were just doing more of the same.”
In fact, DHS was now using the annual ATO data to raise welfare debts after calculating whether people had underreported their fortnightly income to Centrelink. Previously the annual data was only used as a trigger to investigate a case, given it provided no proof of what a person had earned in a fortnight.
A briefing Kerr-Brown prepared for his superiors showed the ATO understood the problems with using annualised data to calculate fortnightly overpayments, as occurred in hundreds of thousands of cases under the robodebt program.
Greggery accused the ATO of “putting its ethical concerns to one side and allowing the scheme to continue”.
“We were raising our ethical concerns and kept getting fobbed off,” Kerr-Brown said.
Kerr-Brown, who still works at the ATO, said the tax office had no “basis to believe what they were doing was unlawful”.
Greggery replied: “But you found a view that it was unethical. Why wasn’t that sufficient reason for the ATO to speak up?”
Greggery said it was the agency’s decision to share the data with Centrelink. While the data had been provided in the past, he said this “didn’t stop the ATO saying ‘no more’ once it had actual knowledge of the problem in January 2017, did it? Or was it too hard to stop and no one wanted to confront the issue?”
Kerr-Brown said the data was also used for other Centrelink programs such as the provision of family payments.
The inquiry also heard the tax office failed to participate in the creation of a protocol for data-matching between it and the Department of Human Services, despite this being recommended by the information commissioner.
Greggery said that if the tax office had done this, the issues with the scheme may have been avoided.
Fawcett, who also still works at the ATO, told the royal commission he was unable to independently recall specific details about why he had sent the strongly worded email.
Greggery said Fawcett was essentially threatening to stop the robodebt program.
He questioned whether Fawcett felt pressure from the ATO in giving his evidence. Fawcett said he did not, and was simply unable to recall much detail about the period given the passage of time.
DHS officials agreed to meet Fawcett after his email, but noted the government’s support for the robodebt program.
The commissioner, Catherine Holmes AC, said it appeared the DHS official was telling Fawcett to “back off” because of the government’s support.
Fawcett said he was unable to comment on the official’s motives but “it definitely could imply that”.
While the ATO was internally frustrated with DHS’s conduct, Greggery said the agency had embarked on a public media strategy of “avoiding the issues and letting DHS speak for it”.
The royal commission was shown email chains revealing the ATO, which is an independent statutory agency, had allowed DHS to clear media statements it provided to journalists enquiring about problems with the scheme.
It did not respond to journalists who’d asked if the ATO had concerns about the use of the data, even though this was the case. Instead, it referred those questions to DHS.
The royal commission continues.
