Robodebt royal commission live: Scott Morrison insists income averaging was ‘established practice’ as questioning continues

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Morrison received verbal advice that income average was standard practice from someone he can’t identify at a point in time he can’t pinpoint

Scott Morrison says he received verbal advice at some point that income averaging was standard practice.

Justin Greggery summarises it like this:

It was the information you’d received orally from someone you can’t identify at some point in time. You can’t identify anything new, which led you to not be troubled by the assertion that it was new.

Morrison interrupts to say it was seven years ago. But then responds:

Your opening statement refer to the fact that the notion of averaging was not [on a] scale … previously attempted, I agree with you. That’s that’s what we’re really dealing with here. This was taking a practice that had been used by the department and was doing it at a different scale with the use of new technology and new data sources.

And it is always the case in my experience in government, that the technology available to me as minister in 2015 was very different to the technology available to minister Richardson back in in the early 90s. And back then it was done with the transfer of a tape, I assume by a courier.

And in 2015, things were different. And the department rightly would always be looking for ways in which it could use new technology to better manage its responsibilities and that what they found was that by using the automated processes, that this could be … at least five times more cost effective in performing their responsibilities, that would seem to be … an understandable and proper thing for them to be doing.

Updated at 01.11 EST

Morrison to provide evidence income averaging had occurred since 1994

The commissioner then asks Scott Morrison to provide proof that income averaging had always occurred, as he has contended throughout his appearance at the royal commission (and previously, in parliament):

Catherine Holmes:

Alright, Mr. Morrison. I want to give you every opportunity and respect, so what I would invite you to do – because I am dubious about what you say is evidence of it happening as a regular standard practice, because all you’ve referred to in the past seems to be politicians saying we’re data matching, which seems to be a different thing – but if you would like to provide to the commission a list of evidence of previous use of averaging, we’d be very happy to receive it with reference to documents if you can.

Scott Morrison smiles with some satisfaction.

I thank you for that, commissioner. I suspect that will get us back in the same territory of PII.

Holmes:

I’m having trouble following that because I’m just going over the … evidence of the practice in the department.

Morrison says it is the “very evidence that I sought to table today”.

Holmes asks if this is the Stuart Robert statement from 2020 to the parliament. Morrison says:

No, what I’m talking about … is … these are letters from the mainframe of the Department of Social Security, which are addressed to people to whom debts are being raised on the basis of income averaging, in 1994.

Holmes says the commission will be getting those letters.

Justin Greggery picks it back up:

You were asked how you knew about this long history of income averaging. And you said, because you went through the briefings, and then a little later years it was because well, you relied upon it coming up early in the course of information at some point. Do I take it from your answer, that the practice of averaging was not referred to in any of the written briefings that you received?

And in terms of the oral information that you received, and you can’t identify who gave that to you?

Morrison:

No, because there were many discussions, but there’s just a foundational way of the way DHS worked.

Greggery:

And you can identify from which department that information came from?

Morrison:

That will not only have come from DHS, I assume in discussions that I had, but I can’t recall it. Specifically. It was not a controversial matter at the time.

Greggery:

And in the context of that oral information you received. You don’t recall being provided with any documentary support for the information.

Morrison says no.

Updated at 01.06 EST

Commissioner dubious on Morrison assertion averaging had been happening since at least 1994

Scott Morrison:

So the objective of the process is to understand what the actual fortnightly income was. And so the technique, method, process, call it what you like, that had been adopted by governments going back as far as 1989.

He goes on.

Catherine Holmes:

Well, we won’t go into how they’re obliged to provide it at assuming is no response. What happens next?

Morrison:

The same has been occurring for the previous 20 years … that is, manual intervention where possible, okay, and then averaging. That’s what was going on, as far back as 1994.

Holmes:

… You keep asserting that, but I’m a little dubious about your evidence for it. At any rate, coming back to the actual process of averaging, which you accept was going to apply if somebody didn’t respond: how could that accord with your understanding of the basis of entitlement under the Act, which is actual fortnightly income, in the absence of any other information provided by the recipient and the irregularity which has been identified by their annual income, and in the absence of any information provided by the recipient when they’ve been given the opportunity to do so?

Morrison:

Well, that was the approach the department took … the path that governments took for decades. Which … goes back to the Department of Social Security and minister Richardson [in 1991].

Holmes then goes back to how if nothing was changing, there was advice about the need for legal advice (which then changed).

Morrison goes back to what he had previously said about stakeholders – that no one was raising it as a problem – as proof that income averaging was normal practice.

None of these stakeholders [were] raising issues about the use of income averaging, none of them. There was no question really about this as being … an issue at that time … Now, in hindsight….

Holmes:

Would it be? Did you consider that they weren’t raising income averaging because it wasn’t happening on any regular basis?

Morrison:

Well, Commissioner, it was.

Holmes has had enough.

Updated at 01.02 EST

Morrison: I did not ask for legal advice on the practice of averaging

We then get back to Scott Morrison’s claim that averaging had been done for years before robodebt.

Catherine Holmes:

Did you ask DHS at any stage for advice about how averaging had actually been applied for the last 20 years?

Morrison:

It was a given in the system. It had been done for so long.

Holmes:

How did you know that?

Morrison:

Because I’ve gone through my briefings. This had been an established practice.

Holmes:

You had a briefing that said averaging was an established practice.

Morrison:

It was part of the DHS debt recovery operations. We were talking about welfare integrity as the executive minute and others demonstrate this is a matter that was discussed.

The issue is that you’re trying to find out what the actual income was, and getting that information from the recipient. And when the ombudsman undertook their inquiry to this they found that when the information was correct, the OCI programmes they referred found that the … debt accuracy was … very, very accurate. Or the objective here by the Department of Human Services was not to raise debts that didn’t exist. Quite the opposite.

Holmes:

I’m asking you about 2015. Had you received any advice from DHS? As to how averaging actually operated?

Morrison:

It would have come up in verbal briefings I’m sure. I mean, I was aware of it. I can’t give you a specific piece of advice or when or where, but it’s it had been around for a long time.

Holmes:

Did you ask at any stage for advice on the legality of this practice?

Morrison:

No, I did not.

Holmes:

Why not?

Morrison:

Because there was no issue that was being raised. There were no cases.

Holmes:

Mr Morrison, If I can stop you. You’re familiar with the Act, which I would infer meant that you also knew that for income support payments entitlement was worked out on the basis of actual income per fortnight? Here is a completely different approach which is just to take a year’s income and divide it by 26. Which common sense will tell you is not the same thing. You didn’t see the need over to check how that could happen.

Morrison:

It is part of a process.

Updated at 00.52 EST

Morrison: department said that legal advice was not needed

Justin Greggery:

Would you agree it’s also an unremarkable position to adopt that you would want clear legal advice if there was going to be a programme introduced which required significant taxpayer expenditure? And the question had been raised at any time about whether it required legislative change to implement it or not, if that position had been resolved?

So was it unusual to not seek legal advice on issues such as these? Or to check whether legislation would be needed?

Morrison refers to a 2019 speech he gave about the public service (which Greggery had previously raised):

I expected … and I respected the experience, professionalism and capability that the public service bring to the table, both in terms of policy advice and implementation skills. And as a minister, you have to make assessments and judgments about the capability of the people you are working with in order to fulfil your responsibilities and to be able to deal with the many matters that you have to deal with.

And I did have a strong relationship … I’ve had that with all the public servants I’ve worked with and and as a result, that is why I was able to make decisions and made decisions that I did in relation to this matter.

I take, obviously, responsible for submissions that go the cabinet and in in full, informing that view to go forward with that, I’d asked that this matter be progressed to be worked up. And it came back to me saying no legislation was required. If they’d come back and said legislation was required, then we may well not be sitting here at all.

Catherine Holmes:

So the answer is you didn’t think in those circumstances that clear legal advice was required.

Morrison:

The department was saying it wasn’t. I trusted their judgement.

Greggery:

When was that point reached in your mind?

Morrison:

When it said no legislation was required, 25 March. That was the ultimate cabinet submission put forward, but as you note, that was the position of both departments back [on] the third of March …

Greggery:

Now I didn’t know that at all. I know that the DHS had drafted a new policy proposal and sent it to your department on the on the third of March …

Morrison attempts to interrupt.

Please don’t interrupt me, Mr. Morrison, you’re doing it again. Courtesy please. You agreed to it.

Updated at 00.48 EST

Morrison: need to ensure welfare integrity a ‘rather unremarkable objective’

Justin Greggery, after outlining some of Scott Morrison’s other statements (cop on the beat etc):

Do you agree that going on the radio and talking about a tough welfare cop on the beat, the need to detect and deter fraud and the like, for you’d received all of the proposals … that is, the executive minute really adopted a policy position which you were expecting the departments to deliver … as it was your clear communication to the public that this was the position you were adopting?

So: given Morrison kept banging on about it to the public, did that then put pressure on it to become policy?

Morrison:

I believed that we needed to ensure welfare integrity. And I believe that was my responsibility as minister, as I had done in other portfolios, for the integrity of those programmes.

Greggery:

You set the pace on the policy direction: ‘tough welfare cop on the beat’. The crackdown language such as that – before receiving the executive minute, which contained the proposals that you’d asked for.

Morrison:

What you’re implying [is] that I had particular initiatives in mind at the time of saying, which I did not.

Greggery:

I’m talking about the tone and the policy direction in which you were taking the department. It was the policy you had.

Morrison:

The particular initiatives that were proposed by the department was the policy of the government. And it was my intention as minister to ensure the more than $100bn that are paid out [of] taxpayers money to people every year was done so properly, and accordance with the rules, and that it wasn’t defrauded.

That should be [a] rather unremarkable objective for a minister for social services, and a rather unremarkable objective for [a] department administering such taxpayers funds. I would say that is an important principle.

Updated at 00.40 EST

Morrison gives explanation about ‘welfare cop’ language

We get to a 2015 media release, where Scott Morrison welcomes “a strong welfare cop on the beat”.

Morrison is asked whether he agrees his language in the media release is similar to the language in his 2015 Sky interview in January. He says yes.

Yes, I do and we literally … in the initiative had a federal police officer in a seconded role to detect welfare fraud

(Which is him saying this is why I used ‘welfare cop’.)

Morrison had previously said he used that sort of terminology as he is a policeman’s son. I am a policeman’s daughter and can say I don’t speak in terms of “cops on the beat”, so it’s not a one size fits all.

Updated at 00.32 EST

You get the feeling that Scott Morrison has missed this – not answering questions in a variety of ways.

After admonishing Scott Morrison again for jumping in to cover issues not raised by the question, Justin Greggery points to what the Department of Finance advised:

The central point made by the finance department is that … there was an inadequate evidence-based business case for the costs and outcomes over the proposal.

Morrison says finance had questions over how it would achieve that much money, given manpower etc.

Greggery:

I asked you earlier about whether you ever asked the question about how 1bn+ dollars was going to be raised in gross saving terms, and you said that it would be worked out during the rigorous PRC process [in] consultation with the Department of Finance. Right.

Would you agree with me that by the 25th of March 2015, that rigorous, detailed consultative process reached the point where the Department of Finance didn’t support the measure?

Greggery is saying finance was questioning the costings.

Morrison, after a few detours (Greggry says at one point “Please let me finish, I can see you gearing up again”) eventually answers:

They they weren’t necessarily questioning that there wasn’t an outstanding level of overpayment. They were questioning as to whether the method that was proposed would actually be successful in recovering that overpayment, which are two different issues.

Updated at 00.27 EST

We now go back to 2015 and what the Department of Finance thought about all of this:

Updated at 00.17 EST