Former Prime Minister Scott Morrison has denied knowing that the infamous Robodebt scheme was unlawful prior to its implementation during his time as Treasurer and Minister for Social Services.

Morrison spent Wednesday being grilled by Senior Counsel Assisting Justin Greggery who presented a narrative in which the Former Prime Minister failed to identify and stop a scheme which raised unlawful debts against already vulnerable Australians.

The debt recovery program, now known as Robodebt, divided a welfare recipient’s annual income – which was provided by the Australian Tax Office (ATO) – by 26 to provide an estimated fortnightly income.

If the system determined someone had been overpaid because they appeared to have earned an income beyond a certain threshold, it would automatically raise a debt against them, send out a debt notice, and begin the recovery process.

But because income support payments are supposed to be determined based on a person’s actual fortnightly income, not their averaged fortnightly income, these debts were found to be unlawful.

The public service knew this and, in February 2015, when an executive minute about a proposed measure to recover funds from welfare recipients reached Morrison’s desk as Minister for Social Services it mentioned the need for “additional policy and legislative changes”.

According to the documents, Morrison circled that he agreed for the Department of Human Services and the Department of Social Services to carry on with their considerations for these necessary legislative and policy changes.

He also indicated that the policy be pursued further.

But when the full cabinet submission for the Robodebt scheme came back around, reference to legislative changes were absent.

Did Morrison ask why this was the case? No. He had “faith” in the department, he said.

Commissioner Catherine Holmes asked with frustration why Morrison had no concern that the department seemingly changed its minds about the need for new legislation.

“I do not consider the department and the professional officers that were there would have arrived at that decision lightly,” he said.

“It is inconceivable to me that [questions about legality] would not have been raised with ministers.”

He went on to say that there was ample opportunity for this issue to have been brought up with him, but it never was.

The Commission pressed the point that there had, in fact, been an indication that Robodebt was unlawful: the executive minute on which he’d indicated the department should pursue the policy further.

Taking responsibility

Greggery brought out a copy of the Cabinet Handbook and pointed to sections on ministerial responsibility, including a one saying that ministers “must ensure cabinet submissions provide enough detail on risk and implementation challenges to ensure the cabinet can make an informed decision on the efficacy of the proposal”.

The Commission brought evidence from the Department of Finance which wanted to see the measure returned with an “evidenced-based business case” that it would recover funds as intended.

Finance also warned that the statue of limitations would mean debts raised in this manner couldn’t be recovered beyond a certain point.

Did Morrison seek clarification on the statute of limitations? He did not.

Another area of contention was around the use of income averaging to raise debts. As the Royal Commission pointed out on day one, automatically matching ATO data with information reported to Centrelink had been standard practice since 2011.

What changed with Robodebt was the removal of human oversight, the reliance on income averaging, and shifting the onus of proof onto welfare recipients – overall, as Morrison admits, a vastly increased scale of the debt recovery operation.

The Commissioner asked if Morrison had sought advice about how income averaging worked, and whether it was legal to raise debts based on this. He did not.

“This was an established practice,” Morrison claimed, one that been in use for decades.

Simply trying to establish how exactly Morrison came to this knowledge – which the Commissioner insisted wasn’t true – was a matter of great difficulty for the Commission.

The Former Prime Minister said it was a sort of assumed knowledge about the welfare system, gathered in part through conversations taking place at a time he couldn’t recall with people he couldn’t remember. It has been seven years, after all.

Greggory questioned whether Morrison appreciated the irony that he was finding it difficult to remember what happened seven years ago about a policy he enacted which initially required welfare recipients to dredge up pay slips about their income from up to six years in the past.

Morrison acknowledged that he was glad the policy had been changed before it was scrapped to let people use bank statements.

Yet he insisted on making the point that income averaging was a pre-existing policy, a claim the Commissioner was dubious about.

At one stage, Morrison began reading from evidence tabled in Parliament, that appeared on Hansard, which triggered much concern and animation from the Commonwealth’s lawyers.

“Mr Morrison, you do understand about parliamentary privilege, don’t you?” an exasperated Commissioner Holmes asked.

Reaching conclusions

By the end of a long day, in which Senior Counselling Assisting Greggery had repeatedly asked Morrison not to interrupt, one which saw the Commissioner request time and again for Morrison to answer the question he was asked, the former Prime Minister refused to concede any responsibility for not knowing the scheme was unlawful prior to its implementation.

Morrison refused to concede that he had plenty of opportunities to question the efficacy of the scheme, or that he was ideologically and politically motivated to see it brought to fruition.

Greggery’s line of questioning ended with a set of propositions that cumulatively represented how Morrison as the Minister for Social Services had helped give rise to conditions that pushed Robodebt into action despite its unlawfulness and its potential to cause great harm and stress on a “cohort of vulnerable Australians”.

Morrison didn’t ask for legal advice about the scheme.

There was a short turnaround to get the measure in place, in part because of the statute of limitations.

The senate composition at the time was not conducive to legislative change, so he ignored the need for it.

And his public rhetoric in cracking down on supposed welfare fraud as a “tough welfare cop on the beat”, combined with estimations it would bring in $1 billion to help ‘balance the budget’, meant the policy was “attractive” to Morrison.

Morrison went through the points one at a time, disagreeing with each, before launching into his closing remarks.

“When the system doesn’t work, and there is a failure in the system such as the one we have discussed today … that is deeply concerning,” he said.

“I believe everybody, including the secretaries of the departments, through to the frontline people within services Australia – as well as all ministers and their staff – deeply regret how this program impacted on individuals.

“I certainly do.”