Shadow Minister for Government Services Bill Shorten has called the federal government's Centrelink data-matching project "harsh and inaccurate", in a statement on Monday likening the scheme to having the same essential logic and ethics of a mob standover.
The former Labor leader said the project, colloquially referred to as "robo-debt", is not just immoral, but is also convinced the scheme may well lack any legal foundation.
The Department of Human Services (DHS) has been automatically issuing debt notices to those in receipt of welfare payments through Centrelink since 2016.
The Online Compliance Intervention (OCI) program automatically compares the income declared to the Australian Taxation Office (ATO) against income declared to Centrelink, resulting in debt notices -- along with a 10% recovery fee -- subsequently being issued when a disparity in government data is detected.
One large error in the system was that it incorrectly calculated a recipient's income, basing fortnightly pay on their annual salary rather than taking a cumulative 26-week snapshot of what an individual was paid.
"Our social security legislation holds that something is a debt only if proven. But robo-debt victims are not given the courtesy of the detail. They are given the figure that an automated algorithm arrives at but not shown the 'working out'," Shorten explained.
"Many are frightened into paying off debts that may be wrong or non-existent."
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Pointing to the experience of a woman battling several health problems, including undergoing chemotherapy for cancer, Shorten on Monday said she is being pursued to repay AU$9,000 in sickness allowance from four years ago.
"Labor supports debt recovery. We even support data matching with proper human oversight. But the robo-debt scheme is malfunctioning," Shorten said.
"National Disability Insurance Scheme and Government Services Minister Stuart Robert admits an error rate of at least one in five. Insiders know it is malfunctioning and are covering it up because the government wants the revenue apparently at any cost."
Shorten also said that some former debt compliance officers working for private contractors have reported their robo-debt concerns are being ignored.
"In the face of official cover-up, it is hard for robo-debt victims to get their voices heard," Shorten said, adding that when it comes to legitimate complaints about robo-debt, people whose lives are drastically being impacted are often keeping quiet.
Labor recently launched a website, Your Robodebt Story, with Shorten calling it a platform to allow "disempowered robo-debt victims" to be heard.
"The stories we have been told through that site reveal the cruelty and heartache of the scheme that is hurting people in every state of this great nation," he continued.
DHS in March last year told a Finance and Public Administration References Committee that its data-matching program went well because it produced savings, but this ignored claims from individuals the OCI system had caused them feelings of anxiety, fear, and humiliation, and reportedly even resulted in suicide.
Robert has also responded to pleas to stop the program by saying that the government has a lawful responsibility to collect "where citizens have mismatched what they said they'd earn versus what, through their tax return, they've been shown to earn".
"We may never know just how much it is hurting people, but at least one mother blames robo-debt for her son's suicide. Many targeted by robo-debt are battling giant obstacles in their lives and are at breaking point. Their welfare trickle drops like the gentle rain from heaven. It can be the difference between a life that is tough but functional and total destitution," Shorten continued.
"These Australians being treated like criminals are not lying on a beach in the Cayman Islands with a piña colada in one hand and a suitcase of ill-gotten cash in the other."
According to Robert, across Australia, as at 30 June 2019, there were 1.54 million outstanding social welfare debts he claims have a value just shy of AU$5 billion.
While the Coalition claims AU$1.9 billion has been returned funds thanks to robo-debt, the program has cost AU$375 million so far, but has only recovered a little over AU$326 million in overpayments, while at least 31,000 debt claims have been wiped.
Shorten said that many Australians want the plug pulled on the "malfunctioning robo-debt menace".
"Robo-debt may be delivering the government rivers of gold. But so much of it is tainted. It is dirty money and it is plunder that comes at too great a human cost. It must be scrapped. And quickly," he concluded.