Centrelink Debt

E&OE

MINISTER PORTER:

… recovery system inside Centrelink, we have the first results available from that system. And they do show that we have had a very solid success in recouping monies owed to the taxpayer.

The exact nature of that success can be measured very quickly. There have been 169,000 completed reviews, and they are initiated by a letter, there is a follow up letter and then after that a third and final letter.

Of those 169,000 completed reviews, there has been a complaint rate as low as 0.16 per cent – so 276 complaints.

We have raised monies owed back, and payable back to the taxpayer of $300 million. We are well and truly on track to reach the estimated amount of repayments of $4 billion over four years.

And of those result matters, in 80 per cent of the instances, the compliance letter resulted in a debt being raised for repayment to the Commonwealth. In 80 per cent of instances the debt is repayable to the Commonwealth.

In the final 20 per cent of instances, the matter is resolved, generally speaking, by people simply providing information online. That’s it.

Only in 2.2 per cent of occasions was documentary evidence, of any type, required.

So what this shows is THAT there has been overwhelming success in terms of the new debt recovery system. Monies are being identified and being paid back to the taxpayer – indeed, $300 million so far, with a tiny complaint rate, and only in a very rare and few instances, indeed 2.2 per cent, has there even been the requirement for documentary evidence to be provided.

So we’re very, very pleased with the results, and I would have thought all Australian taxpayers would be pleased with that kind of result.

QUESTION:

So are you saying that the particular concerns that have been raised, particularly over the last couple of weeks, are the minority of people?

MINISTER PORTER:

A tiny minority.

This is a three stage system. A letter, a very, I think, polite and fairly well drafted letter is sent out. It notes to the individual concerns that the information that they provided from Centrelink is different from the information that was provided to the ATO for the same period of time.

We simply say that there’s a 21-odd day period which they can go online and correct the information that we have if it’s incorrect, or accept the information that we have if it is correct.

So they simply go online and update their details. And as I say, in 80 per cent of the instances where those compliance letters have gone out, the information which indicates an overpayment is correct. In the other 20 per cent of occasions, the matter is essentially resolved by the person providing the correct explanation.

And only in a tiny number of those compliance letter instances is there actually a requirement for any documentary evidence.

QUESTION:

So it puts the onus of proof back on the recipient and given the time frame that may have passed, that documentation may not even exist.

MINISTER PORTER:

Well as I say, it’s only in a tiny number of instances – 2.2 per cent – where there is actually a requirement for documentation.

But when you talk about the onus being put on the recipient – the welfare system is a system based on mutual obligation. The basic mutual obligation, the basic responsibility of the recipient of welfare, is to provide information to the government to ensure that taxpayer’ monies has been properly spent.

We require that information of first instance – that’s a fundamental condition of receiving welfare payments. And there’s an ongoing responsibility to ensure that that information is accurate.

So that onus, to provide proper information, so that taxpayer money is accurately and properly spent has always been there.

And we’re a government who is checking that information.

The real issue here is; how did we get to a point where the previous government was so sloppy with this kind of thing, that there is $4 billion that we think we can recoup for the hardworking taxpayer over the next four years?

QUESTION:

Is there an issue with the system though, given that it’s looking at annual income, when people are actually reporting fortnightly income? So then the automated system is breaking down someone’s annual income into exact fortnight payments, when that’s not actually the case when people are reporting?

MINISTER PORTER:

As I’ve noted, in 80 per cent of the instances of compliance letters going out – we’ve had 169,000 matters so far – there has been a debt raised for the Commonwealth. There has been an overpayment.

There have been some issues that have arisen, whereby the information that we have has been easily explained by the person online. And if an issue arises where, what we think is an anomaly or a discrepancy actually is easily explained – you go online and explain it in a very easy, fairly convenient way.

But we have an ongoing responsibility to check on the best information that we have available, that a person’s payment has been received properly and in accordance with the rules.

QUESTION:

[INAUDIBLE] people are trying to go online and they can’t, and they’re missing timeframes?

MINISTER PORTER:

There was a very short period of time where there was a difficulty getting online. It was a very short period of time. That was fixed very quickly.

This system, as I say, is generating, so far, these 169,000 resolved compliance matters – there will be 1.7 million of these matters over the next four years. What is evident after the first six months, on all of the statistical information we have available, is that it is working exceptionally well.

If I can say with some of the comments that have come from the Labor shadow spokesperson, Ms Burney, she is saying that we should halt this system

Is the Labor Party position actually that we should not go out and successfully recover $4 billion worth of overpayments? Because the information that we have after the first six months of operation of this new system, is that it’s working exceptionally well. We’ve recovered $300 million so far, we’re on track to recover $4 billion over the next four years.

Is Ms Burney actually seriously saying that we should not recover that money? I mean that is absolutely absurd.

And I might say that that’s a relatively inexperienced member of parliament, what does Bill Shorten or Chris Bowen say? Do they say that we should stop this and not recover $4 billion worth of taxpayer money? That would be a very interesting question to put to someone who actually knows how these things work.

QUESTION:

So you make no apology to people who might be wrongly caught up, even though it might be a very small minority, and have payments suspended and then to have them reinstated later?

MINISTER PORTER:

Every government has an obligation to check the information it has and make sure that people have been properly paid.

We are doing this in an organised, fair and procedural way where if there is an explanation for a discrepancy that has arisen, you can go online very simply and sort that explanation out.

And in 97.8 per cent of instances, you can do that without providing any documents whatsoever.

Now if that is a fair and reasonable process that has to be measured against the result. The result here is $300 million worth of taxpayers’ money being returned to the taxpayer, and down the track we estimate $4 billion worth of taxpayers’ money being returned to the taxpayer. And that’s being achieved in a procedurally fair way, with the lowest possible impact.

But there will always be a requirement for anyone in Australia who receives welfare to continually provide information to the government so that we can check that the welfare is being properly applied.

QUESTION:

Is this fair warning then for people who might have been wrongly reporting their income in the past? That it will catch up with them?

MINISTER PORTER:

I think it’s a warning to people that there is a very strong responsibility on the person who receives welfare to ensure that the information that they provide to government is accurate, and it’s consistent.

So that where you have a situation arise where the information that a person has provided, through their employer, to the ATO is different from what is provided by the person directly to Centrelink – yes, we will check that information.

The fact is the Labor Party should have been checking that information at the rates that the government is now presently checking it, and then this problem wouldn’t have arisen in the first place.

QUESTION:

How important is this debt recovery to the budget bottom line?

MINISTER PORTER:

It’s very significant. $4 billion dollars over four years is evidently a very significant amount of money.

That is helping us get back to surplus.

So when I see Linda Burney out there saying that we should stop this process, what she is effectively saying is that we should forgo $4 billion worth of taxpayers money, that was incorrectly paid out to people on welfare, which can be recovered, which can be paid back.

That’s why I say, what are people who are actually in control of finances, or allegedly in control of finances in the Labor Party really saying about this? Are they seriously saying, is Chris Bowen seriously saying, is Bill Shorten seriously saying, that they want to stop what now appears to be an exceptionally successful debt recovery system, which is on track to recover $4 billion worth of debt owed to the Australian taxpayer.

QUESTION:

Ms Burney is saying that you should stop the system altogether. Is it perhaps time the government reassessed the effectiveness of the data matching system?

MINISTER PORTER:

How much more effective can you get than $300 million repaid in six months, with a complaint rate of 0.16 per cent – 276 persons out of 169,000 compliance actions. Where in 80 per cent of the instances of there being a discrepancy being identified by the Commonwealth, a debt has been raised, and in the other 20 per cent there being a relatively painless way for people to explain why the discrepancy arose.

How much better a system can there be than a system that has such a high rate of recovery with such a low and modest impact on the people whose information we’re checking?

QUESTION:

Is it perhaps time for the Minister, Alan Tudge, to break his leave and come back and deal with the situation?

MINISTER PORTER:

All Ministers have short periods of leave, I’m the Minister for Social Services, and I think quite well adapted to deal with the issue.

But the issue is a success story.

Anyone who says that this is not a success story needs to explain why they say that. On what possible basis can you say that $300 million of taxpayer money already recovered – on track to meet the estimated $4 billion, in a way that has a tiny proportion of complaint and a very high proportion of success, is anything other than a success? It’s a beat up frankly. And why would you come back and deal with a beat up? I’m very happy to deal with it, and I think we’ve dealt with it pretty accurately today.