Yahoo News Coalition won’t rule out passing new laws to reboot robodebt scheme
The federal government will not rule out using new laws to allow a future reboot of the botched robodebt scheme, an option Guardian Australia can reveal was explored in an opinion from its top lawyer last year.
Guardian Australia can reveal the opinion from the solicitor general – referred to in a ministerial submission that has formed the basis for the government’s response to an ongoing class action – was received in September.
It suggests the government was aware of serious legal doubts about the scheme two months prior to settling a federal court challenge and eight months before it announced it would refund 460,000 unlawful debts, worth $720m.
A spokesman for Stuart Robert on Monday declined to discuss “privileged legal advice” and twice failed to rule out the use of legislation to legalise the averaging of tax office income data for future debt recovery.
It is understood this option was discussed by ministers in March and last month, when the government finalised the announcement of 470,000 refunds, but no decision has been made.
In February, ministers were told of the possibility of using legislation in the context of defending the Gordon Legal class action.
Related: All Centrelink debts raised using income averaging unlawful, Christian Porter concedes
“This option was canvassed by the solicitor general in his opinion in September 2019 and could be modelled on taxation legislation,” the ministerial submission said.
“Legislative change could be prospective or retrospective. However, a prospective legislative change may not affect past debts, so may have no impact on the [Gordon Legal] class action.”
The opinion was also delivered well before a 19 November email provided to a Senate committee in which the Australian Tax Office confirmed it had been told by bureaucrats the scheme was unlawful.
It is the latest development in the robodebt scandal, which has forced the government to promise refunds to 330,000 people and face the prospect of further payouts for interest and compensation.
Asked to rule out seeking to legalise income averaging in the enforcement of future Centrelink debts, Robert’s spokesman would only say: “The government announced in November last year that debts would no longer be raised wholly or partially using averaged ATO income data.
“This remains the government’s position.”
He did not respond directly when pressed further to rule out the use of legislation, pointing to general comments from Robert about the future of the scheme made on Friday.
Despite the pledge to not use the averaging of annual pay data to allege welfare recipients misreported fortnightly earnings, the government has not closed the overall income compliance program.
The program is considered “no longer viable” on a large scale by the agency responsible, Services Australia, unless staff can once again raise debts based on averaged ATO annual pay information.
On 17 September, Robert said the government had not received “any comment from the department to say anything otherwise what we are doing is lawful”.
He added that the income averaging of ATO pay data was also used under Labor in comments made at a press conference following the announcement of the class action.
Asked if the comments were made before or after the solicitor general’s opinion was received in September, Robert’s spokesman said: “It is not the government’s practice to discuss privileged legal advice.”
It is likely the opinion was prepared for the successful federal court challenge brought by Victoria Legal Aid, which the government settled in November.
Separately, the opposition’s government services spokesman, Bill Shorten, appeared open to the prospect of a judicial inquiry into the robodebt fiasco on Monday, following calls from law academic and robodebt expert Darren O’Donovan.
“Yes, I think there should be some form of inquiry,” he said. “There has been a human toll.”
But he said the opposition would have to discuss whether that would be a judicial inquiry or other probe.
The prime minister, Scott Morrison, expressed regret about the botched scheme on Monday but stopped short of apologising, citing the class action.
Asked whether he would apologise over the robodebt scheme, Morrison said it was a “difficult issue to manage”.
“And the government has great regret about any issues or pain that has been caused but this is something we’re working through and we’re making it right,” he said.
The prime minister, who announced aspects of the robodebt scheme in 2016 as treasurer, also argued the unlawfulness of using income averaging did not mean “those debts don’t exist”.
“And I think all Australians would agree that it’s important that if there are overpayments of welfare or other things like that, then the government has to be diligent about taxpayers funds and make sure that we recover monies where it’s right to do so,” he said.
“But you’ve got to do it in the lawful way and we will ensure to continue to do that with our projects going forward.”
