Government’s bill for failed scheme to be more than $720 million quoted

The true cost to taxpayers of the government’s bungled Robodebt scandal could blow out to a significantly larger sum than the $720 million quoted.

On Friday, Prime Minister Scott Morrison fronted the media to tout a new era of political efficiency, announcing the permanent formation of National Cabinet after its success in dealing with the coronavirus pandemic.

Just a few minutes after he stepped away from the podium, in a move described as “sneaky”, the government distributed a media release announcing it would repay all current and former debts raised by the automated Robodebt scheme.

Robodebt relied on Australian Taxation Office data and an algorithm, matched to Centrelink records, to detect welfare payments that were wrongly claimed, which saw hundreds of thousands of Australians relentless hounded for money they did not owe.

The Commonwealth will now repay $721 million to almost 400,000 people, in a disastrous bungle for the government.

But the bill for that failure will likely be much, much more, with a class action under way seeking damages and lost interest.

“It’s a very unfortunate outcome,” Attorney-General Christian Porter said on ABC’s Insiders program this morning. “There’s a large repayment, there’s litigation still on foot with respect to it.”

RELATED: Government’s $721 million refund to welfare recipients

Mr Porter attempted to share blame for the failure with the previous Labor government, which also relied on income averaging to detect potential welfare overpayments and amounts wrongfully claimed.

“In this instance, we used a method that had been used for many years. It later became clear that was an insufficient basis and we’re refunding the money,” he said.

But host David Speers pointed out that unlike the Labor government, the Coalition “removed the human element” of the process and automated it.

And it was Mr Porter, in his previous capacity as social services minister, who ushered in the program.

While he conceded the program was “flawed”, Mr Porter refused to apologise “because there’s litigation ongoing”.

That litigation will seek damages on behalf of thousands of claimants and mediation is due to take place on Thursday.

RELATED: ‘Like the mafia’ – government’s Robodebt scheme likened to extortion

“That’s something we’ll deal with in mediation and no doubt that’s a position put by the class action,” Mr Porter said of the pursuit of damages.

“There are other ways in which there may be compensation that may be acceptable. We’ll discuss those with the litigants in the matter. But there’s no position finalised on that yet.”

He described Robodebt as “legally insufficient”, but when pressed on whether it was illegal, he danced around the terminology.

“That’s a criminal term,” Mr Porter said. “Civilly, it was unlawful. There was no lawful basis for it.”

Labor leader Anthony Albanese yesterday called on the government to apologise for the pain the scheme inflicted on innocent Australians.

“There were suicides as a result of people who received these debt notices for a debt they didn’t owe, which were illegal,” Mr Albanese told reporters.

“The government should apologise. People were distraught, people receiving these debt notices in the mail, many of them having no idea what it was from – and many of them, getting notices from the government, just paid it.”

The final word on the matter on Insiders went to 6PR Radio host Gareth Parker, who described the announcement of the $721 million repayment on Friday as “sneaky”.

“It looked a little bit sneaky, didn’t it?” he said of Mr Morrison’s dodging of the damaging issue.

“It was ‘take out the trash Friday’ for the second Friday in a row. Everyone is eagerly anticipating what the next Friday will bring.”

It was on the previous Friday that the government conceded its controversial JobKeeper scheme had been significantly over-estimated by $60 billion.

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