Morrison apologises for 'hurt or harm' in how robo-debt was handled

Australian government remains determined to collect AU$5 billion in debts once the COVID crisis is over.

It took two attempts in Question Time on Thursday, but the Prime Minister of Australia, Scott Morrison, has issued a form of apology over the bungled robo-debt scheme that will see the government hand back at least AU$721 million after admitting it got 470,000 debts wrong.

Initially responding to a question from Opposition Leader Anthony Albanese, Morrison accepted responsibility before launching an attack on Labor for doing the same thing when it was in government.

"The issue of legality goes to one single point, and that is the use of income averaging as the sole purpose upon which a debt may be raised for the purposes of reclaiming that debt where money has been made in excess of a beneficiary's entitlements," Morrison said.

"It is true, as a minister in previous portfolios and indeed as Prime Minister, I always accept responsibility for the decisions we take and the policies we support, and that policy was to use income averaging as a determinant to raise debt.

"It was the same policy that the Labor Party used and would account for some or more than 20% of the debts they raised on exactly the same basis."

While the charge that Labor used income averaging is true, it was under robo-debt that the use of the technique was ramped up and automated.

After Albanese, former Opposition Leader Bill Shorten stepped up to the dispatch box and relayed the story of one grandfather with cancer, who moved into his shed to afford medical treatment and was hounded by debt collectors over AU$2,300 while he was in hospital.

In February, the department responsible for robo-debt, Services Australia, revealed it had spent AU$130 million on contractors tasked with chasing down debts.

"The business of raising and recovering debts on behalf of taxpayers is a difficult job and it deals with Australians in many very sensitive circumstances. Of course, I would deeply regret -- deeply regret -- any hardship that has been caused to people in the conduct of that activity," the prime minister said.

"The government has many difficult jobs that it has to do dealing with Australians in very sensitive circumstances and that is true particularly at this time. It is our instruction that we would hope that all agents of the government when pursuing the debt recovery option that they would be sensitive to people's circumstances.

"In relation to the particular gentleman that you referred to, that is a very distressing situation that you have raised.

"I would apologise to any hurt or harm in the way that the government has dealt with that issue and to anyone else who has found themselves in those situations."

Following Morrison, Minister for Government Services Stuart Robert said MPs should refer any cases of hardship through him, before stating that the government would restart its debt collection after the COVID crisis was over.

"Just so that colleagues are aware in the House, 939,000 Australians have debts over AU$5 billion that the government lawfully has to collect across a whole range of programs -- and governments of all persuasions have done this across the divide," he said.

"The government has paused all debt collection across all programs as we work our way through the COVID crisis but government will have to restart that debt collection and will do it sensibly and do it engaging all people -- do it in a very transparent manner."

Shorten later asked if the government was aware of how many Australians had suffered "severe psychological trauma or attempted to take their own life or indeed sadly did take their own life" over a robo-debt, but Robert did not provide details.

"I will again reiterate to members of the House that mental health and suicide are delicate areas and there are many factors that contribute in these circumstances. We all know that talking about suicide and talking about issues of mental health require sensitivity and can I caution the House before jumping to any unfounded conclusions," Robert said.

"As I say again, Services Australia runs a very large social network support for people in times of crisis and ... I encourage members to point those experiencing issues to those services."

Morrison later agreed to a Shorten question that the government owes Australians a duty of care to behave lawfully.

"The government ... in all of its activities, seeks to do those in a lawful manner. That is the responsibility of every citizen, let alone every government, and that is what the government will always endeavour to do," Morrison said.

"Where we have advice and where matters indicate, as has been the case in relation to the use of income averaging as the sole determinant of raising a debt, then obviously government practices change."

Last week, lawyers acting on a robo-debt class action reportedly said that if the government apologised, that it would not use the apology in litigation.

The Australian Greens have called for a Royal Commission into the robo-debt scheme.

It was reported on Wednesday by The Guardian that the total value of unlawful debts raised could reach AU$1.5 billion.

In November, the government conceded in a single case that its income averaging process, a 10% penalty fee and seizing of tax returns, were unlawful.

Robo-debt, or the Online Compliance Intervention program, previously compared the income declared to the Australian Taxation Office against income declared to Centrelink, resulting in debt notices, along with a 10% recovery fee. The system had one large error where it would incorrectly calculate a recipient's income by basing fortnightly pay on their annual salary rather than taking a cumulative 26-week snapshot of what an individual was paid.

If you or anyone you know in Australia needs help contact one of these services:

  • Suicide Call Back Service on 1300 659 467
  • Lifeline on 13 11 14
  • Kids Helpline on 1800 551 800
  • MensLine Australia on 1300 789 978
  • Beyond Blue on 1300 22 46 36
  • Headspace on 1800 650 890
  • QLife on 1800 184 527

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