Robodebt referrals to the federal anti-corruption watchdog will now be reconsidered after an investigation found the body’s commissioner engaged in “officer misconduct” over a conflict of interest.

The National Anti-Corruption Commission (NACC) confirmed on Wednesday that it would be scrapping its decision to not investigate the six people referred to it by the Royal Commission into the Robodebt scandal.

It came after an investigation by the Inspector of the NACC that found the body’s Commissioner should have removed himself entirely from the decision-making process, rather than declaring the conflict and delegating the decision to a deputy.

The NACC will now appoint an independent “eminent person” to look at whether an investigation should be launched into the six people over their Robodebt involvement.

Robodebt was an automated debt recovery scheme launched by the former Coalition government which relied on the averaging of yearly income data from the tax office with fortnightly income data reported by welfare recipients.

If the system detected a discrepancy, an automated “please explain” notice was sent to the welfare recipient.

About 526,000 of these notices were sent to people under the scheme.

This process was eventually revealed to be flawed and unlawful, with debts generated that were inaccurate or non-existent.

The federal government went on to settle a class action lawsuit in relation to it for $1.8 billion, which included the refunding of debts and $112 million in compensation.

A Royal Commission was also held into Robodebt, which found the scheme was a “costly failure of public administration, in both human and economic terms”.

Further investigation

The Royal Commission also referred six people to the newly created NACC for potential investigation.

Earlier this year, NACC revealed that it would not be launching an investigation into the individuals involved with Robodebt.

It was also revealed that NACC Commissioner Paul Brereton had declared that he had a “close association” with one of the people referred to the watchdog, and that he had delegated the ultimate decision-making to a Deputy Commissioner.

NACC received more than 1,200 complaints about this decision, broadly expressing “profound disappointment”.

The Inspector of NACC, Gail Furness SC, then launched a probe, and found that while Brereton had delegated the decision-making, he should have removed himself from the process entirely.

Instead, the Inspector said that the Commissioner had “comprehensive” involvement in the decision-making process “before, during and after” a meeting in October last year when it was decided the referrals would not be investigated.

“The NACC Commissioner contributed to the discussions at that meeting, settled the minutes of that meeting and was involved in formulating the reasons for decisions and also the terms of the media statement,” the Inspector’s report said.

“A third-party, fair-minded observer might reasonably apprehend that the NACC Commissioner’s involvement might have impinged on the partiality of the decision-making of the delegated Deputy Commissioner.

“I found that natural justice or procedural fairness required the NACC Commissioner not to participate in the decision-making with respect to the referred person.”

Due to this, the Commissioner engaged in “officer misconduct”, the Inspector found, in relation to an error of judgement.

Reconsideration

The inquiry recommended that NACC reconsider the Royal Commission Robodebt referral with a new decision-maker in place, and this has been accepted by the Commission.

In a statement, NACC pointed out that the report found an “error of judgement” rather than an “unlawful” act, and that the definition of “officer misconduct” under law is “very wide”.

“Mistakes are always regrettable, but the most important thing is that they be put right,” Brereton said in the statement.

“This mistake will be rectified by having the decision reconsidered by an independent eminent person.

“Mistakes of law or fact are a professional inevitability for judges, tribunal members and administrative decision-makers.”

It comes just a month after the APSC found that 12 public servants had breached their obligations nearly 100 times over Robodebt, including the two presiding departmental secretaries.