Debt debacle is a perfect storm

James Riley
Editorial Director

Shadow Human Services minister Linda Burney has accused the Minister responsible for the Centrelink debt recovery debacle of “going into hiding” over the issue as an independent investigation into the process has been announced.

Ms Burney says that Minister for Human Services Alan Tudge has returned from holidays but has not addressed the issue, leaving it to the department to respond to the barrage of public criticism.

“The minister got back today and the first thing he’s done is go into hiding,” Ms Burney told

Linda Burney: Says Minister Alan Tudge has been missing in action as a perfect storm has brewed

“There is no excuse now. The holiday is over and the minister must suspend the system until it can be fixed. The complaints to my office are not slowing down, we are getting more and more. The minister must act.”

It comes as the Commonwealth Ombudsman has announced that it will be conducting an independent investigation into the accuracy and use of automated data-matching technology by Centrelink to identify over payments to welfare recipients.

The system checks for discrepancies between information provided to the ATO and information provided to Centrelink by welfare recipients, and is currently sending 20,000 ‘please explain’ letters each week.

Individuals who receive these letters have 21 days to prove they were eligible for Centrelink payments, sometimes stretching as far back as six years.

The government has said that 20 per cent of these letters turn out to be for false debt, with 4000 letters sent out each week to Australians who do not actually owe anything.

The Commonwealth Ombudsman will now be launching an inquiry into the issue following numerous complaints and the matter being referred by independent MP Andrew Wilkie and Senator Nick Xenophon.

The Ombudsman, while not able to enforce change, will release a public report on the scheme after considering “systematic level” issues.

“Commonwealth Ombudsman Colin Neave confirms he is aware of the concerns raised about the automated data matching system used by Centrelink,” the spokesperson says.

“Mr Neave has commenced an own-motion investigation into the matter and is considering the issues on a systemic level. The Ombudsman conducts own-motions in private and accordingly, cannot comment on any specific details.

“The Ombudsman will make no further comments at this stage.”

In statements provided to Guardian Australian, Deputy Ombudsman Richard Glenn says the investigation will be looking at the broader issues rather than one specific complaint.

“Certainly there’s enough information from complaints we’ve received and it’s an issue of significant interest to this office, and we’ll be pursuing it,” Mr Glenn said.

Ms Burney said earlier that there is a “perfect storm brewing in Centrelink”.

“Centrelink is at breaking point – the numbers have been slashed and the workforce has been casualised and demoralised,” Ms Burney said. “This is nothing but a money grab by the government.

“They are using the most vulnerable people in our community, falsely accusing them, terrifying them, that they have bills with Centrelink to fill their budget black hole.”

Mr Wilkie has also welcomed the investigation.

“My office continues to receive a large number of complaints from the community from people who are being wrongly accused of owing Centrelink money or at least finding it near-on impossible to substantiate their income going back as far as 2010,” Mr Wilkie said. “The scale of this problem is beyond doubt.

Despite heavy criticism from the Opposition and tech heavyweights, the government has continued to back the system, saying it is “confident” in its operations and accuracy.

“The Department is committed to ensure that people get what they are entitled to, nothing more, nothing less,” a Human Services spokesperson said.

But the automated data-matching system has been slammed by former Digital Transformation Office chief Paul Shetler, who labelled it “appalling” and said it would have already been shut down for fraud if it were a private company.

The new investigation comes as the Community and Public Sector Union (CPSU) has also called on the government to suspend the Centrelink system, saying the Centrelink workers are already “desperately overstretched”.

“The serious problems with this debt recovery program are piling on even more pressure, and feeding more aggression from understandably frustrated customers,” CPSU Assistant National Secretary Michael Tull said.

“This scheme is an absolute nightmare for thousands of Centrelink customers who’ve done absolutely nothing wrong, and the staff who are bearing the brunt of this mess. We hold very serious concerns about Centrelink’s ability to cope in coming months.”

Mr Tull said the current system is nearly at breaking point.

“There’s a perfect storm of work coming, with this debt recovery system likely to be just part of the problem,” he said.

“This debt recovery scheme needs to be urgently suspended until the significant problems with it can be identified and fixed.”

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