The senior bureaucrat who oversaw the rollout of Robodebt says she made a "significant oversight" when she submitted a potentially misleading document to a cabinet committee.
The royal commission into the illegal scheme is holding its final week of hearings in Brisbane this week.
Kathryn Campbell is the former secretary of both the Department of Human Services (DHS) and the Department of Social Services (DSS) and was in the top job at DHS during Robodebt's inception in 2014.
She returned to the stand for the third time on Tuesday.
After a morning of short "yes" and "no" answers to Justin Greggery KC's questions, Ms Campbell conceded due to an "oversight" by her, a document was put to the Expenditure Review Committee (ERC) which could have been misleading.
The inquiry saw emails which showed a document had been edited by someone at DHS to remove references to the need for legislative change to make sure Robodebt's income averaging methodology complied with the law.
The scheme later received $200 million in funding over four years.
"Is it your evidence that a document that was capable of misleading a subcommittee of Cabinet went unnoticed by you despite your involvement in those earlier briefings [about the scheme that became Robodebt]," Mr Greggery asked.
Ms Campbell replied: "Yes".
"Is that because you didn't pay close attention to the documents?" Mr Greggery continued.
"I cannot recall why I didn't notice," Ms Campbell told the royal commission.
Mr Greggery put to Ms Campbell she had been pressured by ministers to avoid discussing legislative change.
"Was there pressure placed on me to attend the ERC and say no legislation was required? No," Ms Campbell said.
"So, you're saying the drafting of this document, to the extent that is misleading, was not the result of pressure?" Mr Greggery asked.
"No, there was no pressure," Ms Campbell said.
When asked if she took responsibility for the drafting of the document which came out of DHS, Ms Campbell said: "As the secretary, I was responsible for the department … I did not notice the change in the document".
The former secretary was asked by Mr Greggery: "Was it your inadvertence that the document arrived in this form before … for the consideration of the ERC?"
"Yes," Ms Campbell replied, before conceding it was a "significant oversight" on her part.
Mr Greggery then asked if the edited document was actually provided to Cabinet as part of a "considered decision by your department … to avoid legislative change".
Ms Campbell did not agree, saying she'd been in a briefing earlier on where she discussed the need for legislative change with then social services minister Scott Morrison.
"If, as you are putting to me, that the Department sought to mislead … if that was the case, and I have never been in a department that sought to mislead … the government … but if that were the case, there would have been no need to put it [the need for legislative change] in the briefing in February [to Scott Morrison]."
'How could you not worry?'
Earlier, Ms Campbell said she did not believe it was DHS's responsibility to make sure Robodebt was lawful.
When asked if she sought legal advice about the new policy proposal for the program which became Robodebt, Ms Campbell said she did not.
"I accept that now … at the time I had relied on DSS advice to ensure the program was lawful," she said, adding it was her responsibility to implement the changes, not ensure they were legal.
She was probed on this by Commissioner Catherine Holmes, who said: "These were your department's customers. Close to one million interventions were proposed. What was entailed was a retrospective change to the basis of entitlement. How could you not worry about that? How could you not wonder how this was to be done and whether it would be done".
"Commissioner, at that time I relied on DSS to be responsible for legislation," Ms Campbell replied.
The former secretary was pushed about the "fairness" of the Robodebt scheme.
"Do you accept that it is unfair to calculate somebody's entitlement on a different basis to that which actually applied when they received the benefit?" Commissioner Holmes asked.
"If the legislation did not allow, yes," Ms Campbell replied.
Commissioner Holmes continued: "Well, you say legislation is somebody else's problem but the concept is a problem isn't it? Isn't it intrinsically unfair?"
Ms Campbell said from the stand: "At that time, I thought it was legal. I now know that not to be the case".
Earlier, the tension between the senior public servant and Mr Greggery was clear.
"I don't understand your question," Ms Campbell said at one stage.
"I'm trying to understand your answer," Mr Greggery replied.
Ms Campbell is now working in a defence role as an adviser with AUKUS on a salary package of nearly $900,000 a year.
DHS dealt with suicide 'frequently'
Ms Campbell was this afternoon accused of only reviewing the suicides of clients because journalists had asked questions of the department's handling of those cases.
She was asked about her response to suicides, linked to some cases where people had received debt notices, including Rhys Cauzzo, who took his own life after receiving a $28,000 Robodebt.
The royal commission has heard a review was undertaken after Mr Cauzzo's death and it determined the failure to place a vulnerability indicator on his file, which mean he never should have received a Robodebt, was described as a "minor error of an administrative nature".
Ms Campbell said "a person made a mistake" by not putting the indicator on the file.
The inquiry was shown an email between Ms Campbell and a communications adviser, that had discussed a journalist's inquiry about a separate suicide.
The email read: "We had a suicide issue recently that gave us a good basis for lines on this matter."
Mr Greggery put to Ms Campbell that the "tenor of the email … suggests it was just a prompt to generate a media response rather than any meaningful review of the system".
Ms Campbell denied this, saying suicide was dealt with "frequently" by DHS.
"I do not accept it was a media management issue," she said.
Campbell 'didn't understand' KC's legal background
The inquiry has previously heard an almost $1 million taxpayer-funded review undertaken by PricewaterhouseCoopers (PwC) found Robodebt needed to be completely remodelled.
But the report was later "not required" by DHS.
Last week, PwC director Frank van Hagen told the inquiry he believed former partner Terry Weber had a conversation with Ms Campbell, who said the report was no longer required.
But from the stand, Mr Weber said he could not remember a conversation of that nature taking place.
Ms Campbell on Tuesday also denied having ordered the report not to be delivered.
The royal commission has previously heard eminent silk Peter Hanks KC had warned Robodebt was unlawful at an administrative law conference in 2017.
Ms Campbell told the inquiry on Tuesday she "didn't understand Mr Hanks background" and put more weight on advice from DSS about the scheme's lawfulness.
She was asked by Commissioner Holmes about the conversation she had with another senior bureaucrat — former DSS secretary Finn Pratt — about the legal advice.
"In hindsight it would be preferable for me to contact Mr Pratt and tell him to get legal advice," Ms Campbell said.
It was put to Ms Campbell that staff did not want to question the legality of Robodebt because she did not want to "hear" questions about the program.
"You do seem to have been very shielded from a lot of bad news, would you agree?" Mr Greggery asked.
"There as bad news most hours of most days in those departments," Ms Campbell answered.
The inquiry continues.
