These days the butt of jokes, the Leyland P76 started out as a good car. The only one specifically designed for Australia, it had a roomy interior, good stability, excellent fuel economy for a car of its size and excellent prospects. In 1973 Wheels magazine named it car of the year.
In part that was because of the fanatical devotion of its quality control team. Nothing left the yard unless it was perfect. But then its parent, British Leyland, ran into financial troubles. It sent over a new Australian chief who over-ruled the quality control team and released onto the market a flood of cars with faults. British Leyland got the cash, destroyed the car's reputation, and wound up the entire operation, costing 5000 jobs.
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The machine relied on by the government to recover welfare overpayments has actually misapplied the law. The Age's Economics Editor Peter Martin explains.
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Government's robo debt recovery
The machine relied on by the government to recover welfare overpayments has actually misapplied the law. The Age's Economics Editor Peter Martin explains.
The Centrelink robo-debt debacle won't cost as many jobs, but its impact will be worse. It'll dwarf that of the bungled census, for which the Prime Minister declared that heads would roll.
In the lead-up to Christmas tens of thousands of Australians received notes embossed with the Centrelink logo telling them the income their employer had reported to the Tax Office was different to the income they had reported to Centrelink. Unless they explained why within 14 to 21 days, they would have an assessment made against them and be hit by a 10 per cent recovery fee.
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Some of the letters dealt with Newstart, sickness and other payments going back six years, beyond when most people keep records, and way beyond the six months the Centrelink website asks people to keep pay slips.
If they could get on to the right part of my.gov.au (which was difficult in the lead-up to Christmas) and if they entered the correct information, they were often still told they owed money, and sometimes told to pay it even if they disputed it in order to avoid debt collection.
In a reversal of the usual onus of proof, they were guilty and sentenced until later proven innocent.
Many are entirely innocent. An internal Centrelink check is said to have found that only 20 out of hundreds of cases reviewed are genuine debts. Social Services Minister Christian Porter uses a different metric to say that eight in every 10 letters has uncovered a legitimate debt. But they've done it by the equivalent of spamming, by sending out thousands of obviously wrong assessments in the hope of getting money while they are contested. They are assessments that never would have got past quality control had humans been in charge of the process, as they used to be until Centrelink put it in the hands of robots mid last year.
One of their stupidest mistakes is to calculate fortnightly income by dividing annual income by 26. If the figure is too high the robots say someone wasn't entitled to benefits during the weeks they received them, even if during those weeks the person earned nothing. In other words, they misapply the law. Another is that they are not too bright. If the name of an employer is spelt one way by the Tax Office and another way by Centrelink, the robots assume it's a different employer and that it's undeclared income. In other words, they shouldn't have been let loose.
How they came to be let loose, how they were allowed to shake down vulnerable people in the lead-up to Christmas, will doubtless be the subject of a Senate inquiry and probably an Audit Office inquiry.
There were clues on the Tuesday before the election. That's when Porter and Treasurer Scott Morrison said they had found billions to pay for their promises. Through "the smarter use of technology" they were going to "improve the capability for the identification and recovery of debt owed to taxpayers".
Automated compliance systems would "minimise red tape, and avoid mistakes that may adversely affect a recipient's payments".
In a reversal of the usual onus of proof, they were guilty and sentenced until later proven innocent.
It was a worthwhile aim. None of us should want either overpayments or underpayments. But the delivery was appalling. Morrison and Porter had promised all the P76 promised and somehow delivered what the P76 delivered.
One of the wilder theories is that they intended to. By inflicting a faulty debt recovery system on the public, they wanted to persuade ignorant, scared and busy people to hand over money they didn't owe and dissuade others from ever applying for benefits again.
A more likely explanation is that they didn't know what they were doing. Asked about the letters sent out by his department threatening a 10 per cent recovery fee, a surprised Human Services Minister Alan Tudge told the ABC: "A 10 per cent recovery fee is new to me, and I don't believe that does occur."
But they might not have reckoned on the extent to which people can fight back. Many of those wrongly hit up have in the intervening years qualified as lawyers. They are talking about a class action. They are going to use the freedom of information process to document how robo-debt was set up and to get the medical and other records that the department already had but chose not to share with robo-debt.
Tudge, Morrison and Porter could do worse than look beyond our shores to Michigan in the US. It backed down after sending out tens of thousands of robo-debt notices in error and announced that in future assessments would be overseen by human beings.
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