The federal Department of Human Services’ move to dump the practice of raising toxic robodebts based on the controversial practice of income averaging, first reported by the ABC today, leaves egg on the face of Government Services Minister Stuart Robert. In an internal email seen by the ABC, the department wrote that it would “no longer raise a debt where the only information we are relying on is our own averaging of Australia Taxation Office income data”. It also wrote that there would be a sweeping review of all previous debts identified as part of the online compliance program, and a freeze of all debt-recovery actions based on income averaging. The move comes two weeks ahead of a Federal Court test case brought by Victorian Legal Aid, as well as a looming class action by plaintiff firm Gordon Legal.

The Greens’ family and community services spokesperson, Rachel Siewert, who chaired a Senate inquiry into the scheme, welcomed the move, which effectively recognised that reversing the onus of proof – by putting the burden on welfare recipients to prove they did not owe the government money – was “wrong and totally unfair”.

As Crikey’s INQ reported [$] two months ago, former Administrative Appeals Tribunal member Terry Carney lost his job via a blunt email some five months after he delivered a tribunal decision that declared Centrelink’s robodebt scheme to be illegal on the basis that the onus of proof could not be placed on welfare recipients – a finding that angered the federal government.

Asher Wolf, one of the original grassroots campaigners against the robodebt program, says the government’s move is tactical. “Don’t trust DHS to act in good faith not to ramp up robodebt again. If you back off from challenging the government – for even a minute – on mendacious data-matching schemes, they’ll slide right back into old patterns of cruelty.”

Today’s move could even endanger the government’s projected return to surplus, which relies on some $2.1 billion in prospective debt recoveries under the robodebt program over the 2019–20 to 2021–22 period. “The Coalition’s AAA credit rating is balanced off raising preposterous, erroneous, illegal debts,” says Wolf. “I have no doubt the Coalition will come after the same people they always attempt to hurt: the poor and the vulnerable.”

Robert was put on the back foot over the robodebt scheme at the National Press Club last week, when Guardian Australia’s Paul Karp asked why the government had never defended the legality of the scheme in court. After attempting to avoid the question, Robert reverted to a boilerplate answer: “As Australians engage with us and provide information to us, many times they can actually prove that they haven’t earned too much. And in fact in 19.9 per cent of cases Australians actually demonstrate through their bank account records or salary pay slips that they don’t have a debt.”

At a press conference in Sydney today, Guardian Australia reports, Robert played down the significance of today’s “refinement” of the program, saying that only a “small cohort” have a debt based solely on income-averaging, and refusing to specify the number of people affected. “There is no change to the construct of the onus of proof – we will still reach out to Australians to say that income-averaging indicates they may possibly have a debt,” Robert said.

Victorian Legal Aid executive director Rowan McRae welcomed the announcement, saying the scheme was “so clearly flawed and has caused hardship to hundreds of thousands of Australians, including some of the most disadvantaged members of our community. We are pleased that the worst elements of robodebt will be scrapped.” She confirmed the test case would still go ahead; Gordon Legal also confirmed its class action would proceed.

A surplus built by punishing welfare recipients was always immoral. The scheme was implicated in an untold number of deaths from self-harm, out of some 2030 people who died within two years of receiving a robodebt notice. But given the surplus has been the government’s major political priority, and today’s announcement comes amid pressure for extra stimulus spending, drought and aged-care funding, and falling prices for key commodities, it’s a major setback.

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