Legal concerns over what became the robodebt scheme were “watered down” but still included in briefing documents prepared for Scott Morrison, a royal commission has heard.
The inquiry into the botched Centrelink debt recovery scheme has previously heard the Department of Social Services in late 2014 held damning internal legal advice warning the key method used to raise those debts may be unlawful.
A crucial line of inquiry for the royal commission is what the Department of Social Services (DSS) and another department, human services (DHS), did with that legal advice, including whether legal concerns were withheld or shared with senior public servants and ministers. DSS is responsible for social policy, while DHS, which handles the administration of agencies such as Centrelink, was driving the Centrelink debt recovery proposal.
The inquiry on Monday heard that a draft briefing for Morrison, who was social services minister at the time, from February 2015 had warned the proposed debt recovery measures would have “fundamental impacts on social security policy and legislation”.
However, a later draft instead suggested it would have “significant implications”, which the senior counsel assisting Justin Greggery said had “watered down the language”.
“It appears as though the change in 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 a potential hurdle of significance,” Greggery said.
Greggery put the revisions to Matthew Flavel, a deputy secretary of the Department of Social Services who has been nominated to represent the organisation at the commission. Flavel was not at DSS at the time.
Flavel noted the brief “still says ‘significant implications for social security policy and legislation’ and it further goes on to say ‘will need to be assessed’”.
“[It was] at the stage of saying, in lay terms, ‘Do you want us to do further work on this to work up a proposal for the budget?’” Flavel said.
The inquiry heard the revisions were sent by a top DSS official to a senior member of DHS.
After giving officials the green light to work up a proposal in February 2015, Morrison received a formal policy proposal for what became the robodebt scheme – as well as other welfare compliance measures – in March.
Those budget measures were included in the May 2015 budget but the law was never changed, leading to an eventual $1.8bn settlement four years later after the government conceded the Centrelink debt recovery scheme was unlawful.
While the language was watered down, Flavel told the inquiry his recollection was that the executive minute document that went to Morrison had mentioned the potential need for legislative change.
Greggery said: “An executive minute to the relevant minister was developed irrespective of the policy advice and legal advice that was communicated by DSS to DHS. I’m trying to understand how that happens. Did DHS disregard the advice?”
Flavel replied: “My recollection from that minute is that it did refer to the fact that there may need to be legislative change.”
Morrison has been granted leave to appear at the commission. It is unclear in what terms the possible need for “legislative change” was communicated in the minute, nor what further advice was provided to Morrison.
Flavel, who reviewed internal documents before appearing on Monday, said once the proposal was finalised he’d found no evidence the risks of the plan were presented to ministers.
“I’ve not seen anything that suggests there was particular advice given from senior levels of DSS at the time … relating to the risks attached to the proposal,” he said.
Asked “why not” by Greggery, Flavel replied: “Yeah, it is a mystery.”
The inquiry has previously been told the same lawyers at DSS who warned the policy would be unlawful in late 2014 were given only two days to provide further feedback on the formal proposal in March 2015.
DSS lawyer Anne Pulford said it meant they didn’t have the chance to provide proper legal advice and were only able to raise potential legal issues. It is unclear how senior officials at DSS and DHS used the legal warnings Pulford’s team provided.
Christopher Birrer, the deputy chief executive at DHS’s successor agency Services Australia, told the inquiry on Monday the benefits of the scheme were exaggerated “and the risks understated” in the February 2015 executive minute to Morrison.
Asked if it had been “oversold” from the beginning, Birrer replied: “It was terribly oversold, commissioner … I’ve used the phrase, like a ‘slam dunk’, that this [debt] was out there to get. Even if averaging was lawful, DHS would never have recovered what was in that executive minute.”
Holmes said: “It’s the chemical weapons in Iraq, slam dunk sort of thing.”
Birrer only joined the agency in 2020, five years after the robodebt scheme was established, and also months after it had been wound up.
Birrer said another issue was a “demanding and difficult leadership environment” with “aggressive and demanding leadership”. He said this conduct was, according to the recollections of others, “inappropriate”.
“There was an attempt to essentially make it look like everything was fine,” he said.
Flavel was also criticised by the royal commission for failing to reference which documents he’d used to make various findings in his witness statement.
This had been requested by the royal commission and prompted the commissioner, Catherine Holmes AC, to ask: “Are you not taking the royal commission seriously?”
Flavel replied: “I don’t want to give that impression, commissioner.”
He was also questioned about why he was chosen to respond on behalf of DSS given he “wasn’t involved at the department at the time”.
Flavel said “all of the senior people involved” were no longer in roles at the department and the issues being investigated sat within his remit.
The royal commission continues.
