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Department drew up brief for robodebt scheme in 2015 despite legal advice

Former prime minister Scott Morrison wanted the Department of Human Services (DHS) to bring forward proposals to “strengthen the integrity” of the welfare system, including a plan for what became the robodebt scheme, a royal commission has heard.

Despite damning legal and policy’ advice from within the Department of Social Services (DSS) in late 2014, the Department of Human Services drew up a brief for what became the scheme, as well as other compliance measures, in early 2015.

The inquiry was told on Wednesday that DHS had indicated Morrison, who was then the social services minister, wanted the proposals worked up for the 2015 budget process.

Senior counsel assisting, Justin Greggery, said that by late 2014 the compliance proposal had “become part of the budget”. Referring to documents seen by the commission, Greggery said that was because the DHS had said “minister Morrison indicated he wants a number of the potential proposals” brought forward for the budget process.

The royal commission has not heard any evidence the legal or policy advice warning against the scheme reached Morrison, who has been granted leave to appear at the royal commission if he wishes.

Under questioning, Anne Pulford, a lawyer at the DSS who had warned against the plan in late 2014, agreed Morrison’s support for the proposal had limited the opportunity for “considered legal advice”.

That was because it had been swept up in the budget process and there was a tight timeline for the plans to be sent to the Department of Finance, the inquiry was told.

Greggery asked:

It appeared that the very tight timeframe and the pressure was coming from a clearance by minister Morrison to have a new policy proposal developed to the point that it might be submitted to the Department of Finance?

Pulford replied:

Correct.

The inquiry heard that while an initial draft proposal noted that what became the robodebt scheme needed “legislative change” to be administered, a later version said this was not needed.

Officials within the department of social services raised internal concerns about this significant change in position.

The inquiry heard that DSS officials noted “urgent advice” was needed as to the “strategies … cleared by minister Morrison for DHS to take forward as a [new policy proposal]”.

Greggery said:

And what we know now from the benefit of hindsight is that this particular proposal did become including in the 2015-16 budget … as the strengthening welfare integrity system.

While the DSS officials noted some of the assumptions used to form Pulford’s advice had “changed”, the royal commission heard that officials only two days to review their advice.

The overall strengthening welfare integrity system plan was expected to save $1.2bn. The inquiry heard that one of the measures was “broadly consistent” with the proposal that Pulford provided damning legal advice only a few months earlier.

Pulford’s evidence continues.