January 10, 2017





NARELLE GRAHAM: Federal Member for Port Adelaide, Mark Butler, has joined a growing number of politicians calling on the Government to suspend the Centrelink data matching and debt recovery program. Welcome to you Mark Butler.



GRAHAM: I’m well, thank you. What is the issue?

BUTLER: Well the issue is that over the course of the week or two leading into Christmas, tens of thousands of Australians received pro forma letters from Centrelink accusing them, or alleging there was a debt owed by them to Centrelink.

Now on the Government’s own admission, about 20 per cent of those tens of thousands of letters have no basis in fact whatsoever. What we have seen in the Christmas/New Year period is tens of thousands of Australian’s, here in Port Adelaide and across the nation, being accused of debts. Being told they have the responsibility to prove that they don’t have the debt, even though some of them go back many years, and given just 21 days to either convince Centrelink there is no debt or to pay what in some cases is alleged to be thousands of dollars.

GRAHAM: What effect is that having on people that you are seeing?

BUTLER: Well we are getting inundated by calls in our office and I know that other members of Parliament across the nation are experiencing the same thing. People that are on low-incomes that are requiring a bit of support from Centrelink, find it very tough to get through Christmas and New Year, and to have a letter sent to them alleging they have a debt of thousands of dollars when in about 1 in 5 cases there is no debt at all has caused enormous distress. I think there have already been reports across the country of people getting to the point of thinking about self-harm and I know that I have had a few constituents indicate that they were at that point because of the distress that these letters have caused.

GRAHAM: We have been told that Centrelink is tweeting out the Lifeline number from its own account.

BUTLER: I’m not going to criticise that. Whenever there is a person in public office and public position who comes across a person who is in distress, it is important they do all that they can to ensure that person is able to avail themselves of support from Lifeline or many of the other organisations. So I don’t criticise that, what I do criticise is the system that the Federal Government has put in place –

GRAHAM: So how is Centrelink getting it wrong?

BUTLER: Well it is actually quite simple, and how the Government has designed a system that has a 20 per cent failure rate is utterly beyond me. What they’ve done is essentially set up a computer system that takes data from Centrelink and also from the Tax Office and melds the data together. It then comes up with a conclusion on whether or not you have a debt.

Now there are two problems with that. Firstly, Centrelink entitlements are based on income that is assessed on a fortnightly basis because we know people in casual employment, people who are on the aged pension, will often work at very different rates throughout the course of the year. This new system that the Government has designed just takes an annual rate and divides it by 26, to get a flat fortnightly rate. In spite of the fact that has never been how Centrelink entitlements have been assessed. The second problem is that if your employer is described in a different way in the tax office to the way in which it is described at Centrelink, this new system will assume you have got two jobs.

So a great example, well a terrible example I should say, would be if you work at one of the hospitals in Adelaide, the Queen Elizabeth, the Royal Adelaide etc. The tax office might have you working for the Royal Adelaide Hospital but the Centrelink office might have you recorded as working for the Department of Health. In that case, this new system is accusing you of having two jobs and leaving a debt against you as well.

GRAHAM: That is interesting isn’t it? I just want to read you a statement from Alan Tudge. It says, “Labor is demanding we cease a process that has successfully recovered more than $300 million of incorrectly paid taxpayers’ money since July. Frankly, I don’t think many taxpayers would support that call”.

He goes on to say, “Centrelink has simply gone on doing what it has done for years, crosschecking tax office income information against what welfare recipients have reported to Centrelink”. “The only major change is that it is more automated so that we can complete more checks”. “People who work hard to assess those in needs expect there to be integrity in the welfare system and is exactly what we are ensuring”.  

Michael from Adelaide has gone but he has a reasonable question that I was going to ask you anyway. Have you ever heard of a case where Centrelink goes to somebody and says we underpaid you, we need to give you more money?

BUTLER: Look not off the top of my head I have to say, and certainly I haven’t gotten any complaints from people that have said they have had that approach from Centrelink.

GRAHAM: I wonder if it has ever happens. Somebody else is saying on the text line Mark Butler, “So 4 in 5 were rorting”.

BUTLER: No it’s not a question of rorting. Often, people because their income will change dramatically over the course of the year, often on a fortnightly basis, particularly if you are in casual employment, there is a need to constantly update your reporting and that is the way in which Centrelink has worked. So to Alan Tudge’s point, I don’t think anyone is saying there shouldn’t be a situation that ensures that if someone is overpaid by Centrelink there is a way in which you get that money back. But I think most reasonable people can say surely it is not beyond the wit of a Federal Government to design a system that doesn’t pick up 1 in 5 people wrongly. So of course Centrelink has always done that but they used to do it on a human basis so that someone would look at Tax Office data that said you worked for the Royal Adelaide Hospital and Centrelink data that said you worked for the Department of Health and made the very reasonable conclusion that is the same job; whereas this computer system is automatically accusing you of having two jobs and failing to report that to the Government.

GRAHAM: Thank you Mark Butler, Federal Labor Member for Port Adelaide.