ABC News Radio Drive

18 January 2017


SUBJECT/S: Centrelink debt debacle

STEVE CHASE: Jim Chalmers is the Opposition spokesman for Finance and he joins us now. Jim Chalmers, thanks for coming on.


CHASE: Alright. Now the Government says it's shaking up Centrelink to improve the Budget bottom line. It's already garnered some $300 million from this process. You in Government would bank that, wouldn't you?

CHALMERS: This has been a debacle from go to whoa. It must be suspended and then it must be fixed before it ruins the lives of even more vulnerable Australians...

CHASE: …That's not the question I asked you. You'd bank that $300 million if you garnered it from this process, wouldn't you?

CHALMERS: Well it remains to be seen whether they will get that $300 million that they've claimed. Indeed, the whole $4 billion program is in jeopardy and is in doubt because it's based on a whole series of misjudgements and missteps. So it remains to be seen how much money will be recovered, whether that money proves to be justified or not and how many lives it ruins in the interim…

CHASE: …Excuse me for interrupting, but the Social Services Minister Christian Porter says they've already got that $300 million, he says.

CHALMERS: He's said a lot of things in this conversation, Steve, over the last few weeks. He said first that there was no problem whatsoever, then he had to back track. The Government has made a series of statements about this which shows they are hopelessly out of touch with the problem and with the anger that they've created. We will see how much of that money is recouped from the public. It is based on a series of misjudgements and missteps, so it would be unwise for us to take the Government's word for it when they claim a certain amount of savings. 

CHASE: Let's go to this Senate inquiry. I know you're not in the Senate, but you'd be across what is being proposed here. What would be the terms of reference specifically to your knowledge?

CHALMERS: Some of the specific things we need to get to the bottom of, Steve, are things like the nature and extent of the issues that have been experienced by people; the issues that have been raised with us in our electorate offices right around the country. The main things that I've been getting here in my office are the automated nature of the debt issuance notices, which don't have that manual review anymore; the fact that Centrelink's been asked to average income over 26 fortnights, which creates a whole series of predictable problems; and the fact that we are relying in some cases on outdated postal addresses. When you think about all of those issues together, you can see that what is warranted here is a proper look, a proper investigation of what's happened. That means first suspending the program, then getting to the bottom of it, including via a Senate inquiry, and then fixing it.

CHASE: Why would you suspend the program when it's quite clear that some people, it's being found, actually do owe money. So if you suspend the program you lose the money as well?

CHALMERS: The change that's happened here, Steve, which is important to understand, is that now people in the system are guilty until proven innocent, which is a key change that is causing a lot of angst in the community. We have…

CHASE: …Wouldn't that be open to interpretation? Because the Government is characterising these letters as clarification letters; basically you're not being accused of anything, you're just being asked to provide information.

CHALMERS: I think that's a deeply impersonal and misleading description of what's going on here. I wish that you could see some of the angst that it's causing in the community. Let me put it this way, Steve – we have always said that we have no objection to recouping debts where there's been overpayments and where there's been fraud and, of course, people should repay money if they've rorted the system. We need to make sure that public money is going to those who need it most. But in this case, none of those objectives are being met because we've got a Government which is habitually and horribly mismanaging this program in a way that is causing so much anxiety in the community among people who are doing the right thing. 

CHASE: Well you've got the man in charge, Malcolm Turnbull, saying that he stands by this program. It's Centrelink's duty to recover debt.

CHALMERS: There are ways to recover debt that doesn't ruin the lives of people who are doing their best to do the right thing. I don't think anyone involved in this system would conclude that the operation of it since the 1st of January this year has been anywhere near appropriate. There are a whole range of issues, some of them I ran through with you a moment ago. But it is very troubling, whether it's the Prime Minister or Minister Tudge, that they don't seem to think that there's a problem here. They're so out of touch that they can't see the human impact of this debacle or understand the anger that people are feeling and what makes it even worse is that now they've flagged, having gone after people on Newstart, now they'll come after people who are on the age pension and people with disabilities. So this is really the beginning of the problem and not the end.

CHASE: When you say "go after people", I wouldn't have thought a letter being received in the post asking for information is actually quote "going after someone".

CHALMERS: I think it is, Steve, when you think about the sort of shabby accusational nature of some of what's been going on, based on a series of miscalculations and misjudgements and missteps…

CHASE: …How many?

CHALMERS: Well things like…

CHASE: …How many?

CHALMERS: How many people?

CHASE: No, how many misjudgements and missteps. Have you got them calculated yet? 

CHALMERS: Well we need to get to the bottom of it, but at least those three that I mentioned – the lack of a manual review; the fact that they average income over 26 fortnights; the fact that they're relying on outdated postal addresses.

CHASE: But you don't have numbers of actually how many people it's involving?

CHALMERS: We think it involves tens of thousands of people, Steve, but that's one of the reasons we need to get to the bottom of it. A Senate inquiry is the best available mechanism for us in Opposition to do that. We think that's a very important exercise. And while we get to the bottom of it, we think the system should be suspended, because it's not working as the Government intended and it's jeopardising some of those objectives that I mentioned before, which are understandable objectives. We do want to make sure that we get to the bottom of people who are rorting the system or being overpaid. We want to make sure that the money's spent in the most effective way to people who need and deserve and are entitled to it. Those objectives are being compromised by a Government which can't get anything right.

CHASE: And one final question to you, Jim Chalmers. Are you confident that on the first week back in Parliament that this would sail through the Senate, or is that yet to be determined whether you've got the numbers for this inquiry?

CHALMERS: I'm very encouraged by the support that's been voiced by members of the smaller parties in the Senate, so I'd be confident that we can get an inquiry up of this nature. I think that people do understand the mess that's been made of this from go to whoa and I'd be confident that we can get the outcome that we want and that we can do our best to get to the bottom of this debacle.

CHASE: Jim Chalmers, thanks very much for giving us the Opposition's viewpoint this afternoon.

CHALMERS: Thank you, Steve.