Labor ditches Robodebt contract

The federal government has announced its final contracts with debt collection agents ARL Collect Pty Ltd, Milton Graham/Recoveries Corporation Pty Ltd and Probe Operations Pty Ltd will expire on 30 June 2023, with all debt recovery to be managed internally through Services Australia.

This will include a total of 10,800 welfare recipients, worth $43 million in debt, who will transition back to the government’s in-house service.

The federal government’s robodebt scheme ran for four and a half years, from July 2015 to November 2019, during which time $1.73 billion in unlawful debts was raised against more than 400,000 people.

Minister for Government Services and the NDIS, Bill Shorten MP, said the process of raising debts “needs to be lawful, customer-focused, and handled with care and respect”, and will ensure that Robodebt is “not repeated again”.

“We’re going to make sure that Australians who have a debt, an overpayment perhaps to the social welfare system, that they are not treated as crooks, that they are not treated as people who are guilty until proven innocent.”

The announcement comes ahead of the royal commission’s final report into Robodebt, which is expected to be delivered by 30 June 2023, after being extended from 18 April 2023.

Mr Shorten said: “The Royal Commission into Robodebt has put on full display the unfettered cruelty with which debt collection agencies were unleashed against vulnerable Australians.”

“We are not naïve to the fact that wherever there is government money, there will be some opportunistic behaviour, but Services Australia is already fully capable of recovering debts and has multiple tools at hand.

“However, the power to raise lawful debts against citizens needs to be exercised judiciously, and at every stage, afford citizens the right of reply and not reverse the onus of proof from the government to the individual.

“We have to look at the reality of who is affected; it’s often very vulnerable Australians, people who have gotten on government payments in the first place because they are at a vulnerable time in their lives.

“We have to stop giving their information to private companies and ensure the debt recovery process is lawful, fair and transparent.”

Mr Shorten explained that during the transition phase, external collection agents will contact people who have a payment arrangement with them and assist them in the transition process.

“People who do have a payment arrangement may also be contacted by Services Australia staff, who will help set repayments up with Services Australia instead.

“Flexible repayment options, short-term counselling and referrals to further support may be provided.

If anyone is experiencing financial hardship or is having difficulty repaying money, please call the Centrelink Debt Recovery Line on 1800 076 072.

[Related: Robodebt royal commission unearths mortgage impact]