Transcript: RN Breakfast ABC Radio National

11 January 2017

The Hon Alan Tudge MP

Minister for Human Services
Topics: 
Debt and compliance letters, parliamentarian expenses
E&OE

HAMISH MACDONALD:

Alan Tudge is now back from summer leave. Minister good morning, welcome to the program.

ALAN TUDGE:

Good morning Hamish.

HAMISH MACDONALD:

How was the break?

ALAN TUDGE:

It was great, thank you.

HAMISH MACDONALD:

Good. Are you now ready to scrap the scheme or at least suspend it, given what we know to be large scale problems?

ALAN TUDGE:

No we won't be. There's an important principle here, Hamish, that we're trying to implement and that is to ensure that there is great integrity in the welfare system because after all the welfare system constitutes a third of the budget.

We want to make sure that people get the welfare entitlements that they're entitled to and no more and no less. Consequently we do have a robust compliance system in place and in the last six months alone, we've recovered over $300 million to the taxpayer through that process. So the system is working and we will continue with that system.

HAMISH MACDONALD:

But we know now that some of that money is from people that are paying this money back, even though they don't think they owe it simply because the process is so flawed.

ALAN TUDGE:

Well I disagree that the process is so flawed. The process which we're using…

HAMISH MACDONALD:

[Interrupts] Let me pick you up - do you acknowledge that some people are paying this money back even though they maybe don't owe it? Perhaps because it's too difficult to go through the process of challenging?

ALAN TUDGE:

Every individual has three opportunities to update their record: when they first get a letter requesting information; secondly they can request a review of any decision to imply a debt and thirdly they can appeal to a tribunal. At any stage they can update their information in relation to that.

But let me take you through broadly this process here, Hamish. What we essentially do is we look at the Tax Office income records and compare that to the information which the welfare recipient has provided to Centrelink when they're receiving welfare. And if there is a discrepancy between those two, we then go to the recipient and say “could you please explain this discrepancy.”

If they're unable to explain the discrepancy then a debt notice may be given to them and they will have to pay back that money. Of course in some cases people can explain the discrepancy because it may be, for example, that the employer said to the Tax Office that they were working for 10 months of the year when in fact they were only working for six months of the year and so it's an easy thing to fix.

HAMISH MACDONALD:

So you still didn't answer the question though, which was do you accept that some people are paying the money back even though probably they don't owe it simply because the process is too difficult for them. Do you acknowledge that that is happening or not?

ALAN TUDGE:

I'm not aware of individuals who are completely convinced that they don't owe money but have been given a debt notice, because as I said…

HAMISH MACDONALD:

[Interrupts] So you haven't read any of this press…

ALAN TUDGE:

[Talks over] No, no, they have…

HAMISH MACDONALD:

… you haven't read any of the media reporting of people expressing these experiences?

ALAN TUDGE:

I have read all the media reporting of this but as I said, people are given the opportunity to update their records when a discrepancy is found to be present. They have that opportunity then.

When a debt notice is issued to them, if indeed it is, they have a further opportunity to provide further information and then they have a third opportunity again if they want to appeal it to the tribunal. So, there are three opportunities for individuals to update their records if a discrepancy is identified.

HAMISH MACDONALD:

And when you're talking about this process being easy, are you talking about the same process whereby people are reporting that they're having to call Centrelink for example up to 350 times in order to get through?

ALAN TUDGE:

I am very surprised by that figure, I know that the call wait times at Centrelink can be long at times. The average call wait time at present is about 12 minutes. Obviously that's an average, it means that sometimes it's shorter, sometimes it's longer. People can also go to a Centrelink office and typically they'll be able to see a person in person within 10 minutes.

HAMISH MACDONALD:

But when people see people in person they're being told you have to go and do it on a computer aren't they? That's the truth of it.

ALAN TUDGE:

No, you can always at any time call up a Centrelink officer so even though we have got more…

HAMISH MACDONALD:

[Interrupts] No but hold on you are saying you can go into an office, people do go into offices, we've spoken to these people. When they go into the Centrelink office they're then directed either to their own computer or to one of the desktop computers at Centrelink and often those too are not functioning.

ALAN TUDGE:

I disagree with that, we did have an issue at one particular stage when the online system was down - for a very short amount of time - and that has been fixed and now that is working.

We do have self-service terminals in the Centrelink offices and there are people there who can help people to be able to get online in the system with that process. We've also got the ability for people to call the call centres so there are multiple avenues for people to go and get assistance.

HAMISH MACDONALD:

I'm just wondering why your account of what it's like trying to get through to Centrelink is so vastly different from what users of Centrelink's experience is and in fact what some of the data shows.

In 2014-15, Centrelink blocked 22 million calls, in '13-14, Australians spent a sum total of 143 years waiting on hold, that's according to the National Audit Office. It is not easy, is it, to get through to Centrelink if you have a problem with the notice that you're receiving?

ALAN TUDGE:

I know that sometimes you do have to wait time when you're calling Centrelink. As I said the average is about 12 minutes at the moment, but sometimes that means you're waiting for a shorter amount of time and sometimes a longer amount of time.

We get something like 59 million calls each and every year because we have 4.5 million people who are receiving Centrelink payments and often those payments are quite complex ones so we do have a lot of calls coming in.

Yes, sometimes people do have to wait longer than what they would like to wait and we simply ask them to be patient, they will get through or they can go into a Centrelink office.

HAMISH MACDONALD:

We spoke to Paul Shetler who headed the Government's Digital Transformation Office. He's clearly qualified to pass judgement on this system. He told us that this rollout was catastrophic, it was incredibly incompetent.

He's likened the failure rate to fraud. He said if this was a private organisation it would go out of business. How do you respond to those assertions?

ALAN TUDGE:

Well Paul Shetler in his time as the CEO of the Digital Transformation Office did not at any time work on the Centrelink system. So he was never working on this system, I make that first point. The second point…

HAMISH MACDONALD:

Sure, but he's talking about the problems.

ALAN TUDGE:

The second point I'd say is he was referring to the so-called “failure rate” and the Labor Party makes this point as well. When we first do the data matching between the Tax Office information and the information which the welfare recipient has provided to Centrelink, we then issue a notice to the recipient and say can you please explain this discrepancy.

On 20 per cent of occasions people can provide that explanation and that's the end of the matter, and on 80 per cent of the occasions they cannot or they do not. Shetler is saying that because in 20 per cent of the time people can provide an explanation, that that is the failure rate. And that's a completely inaccurate description of that figure.

What that figure is simply saying is that when we have asked for further information people have provided that information and that's cleared up the matter for them.

HAMISH MACDONALD:

Can you explain why it is that when some of the poorest people in the country receive taxpayers' dollars, you are threatening them with prison time if they don't pay it back. When your own colleagues get taxpayers' money and use it in ways perhaps that the community doesn't find acceptable they get due process, they get second chances, they get a simple apology and move on with the job. How do you justify that?

ALAN TUDGE:

If a person deliberately defrauds the system then yes, the full force of the law will come down upon them. That is if they deliberately defraud the system and deliberately get higher payments than what they are entitled to. Now there are many people who may inadvertently get more payments than they're entitled to and that's when we ask them to…

HAMISH MACDONALD:

[Interrupts] Sure, but ultimately you don't treat them any differently. If they don't respond to the first letter they get the debt notice then eventually they might get the debt collectors after them with 10 per cent rates of interest on it and you have gone on television and said we'll find you, we'll track you down, you'll have to pay the debts back and you may end up in prison and yet you're…

ALAN TUDGE:

And I said that…

HAMISH MACDONALD:

And yet your own…

ALAN TUDGE:

No, no, Hamish, I said that specifically…

HAMISH MACDONALD:

…colleagues…

ALAN TUDGE:

…and again this has been a mischaracterisation. I said that's specifically in relation to those people who deliberately defraud the system and that is right. If people deliberately defraud the system, they deliberately and knowingly put in income information which is incorrect, then that is a crime and they will be tracked down and we have a fraud tipoff line to deal with such people.

HAMISH MACDONALD:

So you want to be clear then I suppose this morning too, everyone else that's caught up in this situation that they won't go to prison I would suspect?

ALAN TUDGE:

Well, you go to a prison for a criminal offence and that is when there's a deliberate fraud. So that's been a mischaracterisation. When I said that it was specifically in relation to fraud, not in relation to inadvertent over payments.

HAMISH MACDONALD:

So why then when it comes to your own colleagues when they are using our same taxpayers' money, wrongly it seems, is there such leniency?

ALAN TUDGE:

Well, you're referring to a number of examples which have been in the press recently. Now we've had a review of the work expenses as you probably know Hamish. We're taking this review seriously. We've already implemented three of the 36 recommendations and we'll be implementing more of the review as a priority over the next six months.

Now most importantly that's going to be providing greater definitions of what a legitimate work expense is for parliamentarians, and so I think that will be welcomed by the Australian community…

HAMISH MACDONALD:

[Interrupts] Fine. We've all heard those talking points in the press conference and various other statements. Explain to me why it's fair that poor people get threatened with prison in situations where they've wrongly gotten taxpayers' money, but for you and your colleagues if you get taxpayers' money and do these strange things with it, you get second chances?

ALAN TUDGE:

Well, if you're referring again to the Centrelink recipients here, again I make that distinction. If you deliberately seek to get more money than you're entitled to then yes that is a fraud. If however you may have inadvertently put in incorrect income records, we're actually giving you that opportunity now because we're reviewing them, we're sending a letter and saying there's a discrepancy between what the information you provided to Centrelink…

HAMISH MACDONALD:

[Interrupts] Okay, so there's no…

ALAN TUDGE:

…the Tax Office. So we're actually giving you first opportunity…

HAMISH MACDONALD:

[Interrupts] So there's no apology then for the indifference?

ALAN TUDGE:

We give a second opportunity, we give a third opportunity in relation to those Centrelink recipients.

HAMISH MACDONALD:

Okay. And you don't want to sort of clarify why there's different treatment for politicians than what there is for the public?

ALAN TUDGE:

Well I don't think in relation to some of the examples that I have seen in recent times that people have deliberately sought to defraud the system.

HAMISH MACDONALD:

Okay. We'll leave it there. Alan Tudge thank you very much for your time.

ALAN TUDGE:

Thank you so much Hamish.

HAMISH MACDONALD:

Alan Tudge, Minister for Human Services.

[ENDS]