Transcript: Doorstop: Settlement of the class action relating to Centrelink debts
The Hon Stuart Robert MP
Good afternoon and thank you for coming out. 12 months ago, almost to the day I announced the Government’s decision to cease its income compliance program where any debts was solely or partially raised based on averaged income or ATO averaged income data. I then subsequently announced after that, that the Government would refund Australians who had debts and monies collected from debts that were raised by ATO averaged income data, either solely or partially.
As at yesterday, $705 million had been repaid to 405,000 Australians, and this represents 95 per cent of all Australians who had debts raised using partial or wholly ATO averaged income data.
As you'd be aware, today the Commonwealth has reached agreement with Gordon legal, who have been running a class action against the Government on the income compliance program, as part of this agreement in principle, a further $112 million will be made available to those approximately 430,000 Australians, for the most part, for interest payments for money held.
Now I appreciate the Gordon Legal will seek to have its costs come out of that amount of money. But I think we'd all want the vast bulk of those funds to be returned to Australians and those involved. I also note as the joint statement that the Commonwealth has not accepted or admitted any liability in the matter.
As we all recognise the process of using ATO averaged income data has been a process that has been used for decades and decades, indeed right back to the Hawke and Keating Governments, this approach has been used as part of collecting debts. However, as a 12 months ago that process has ceased. And as of today, agreement has been reached.
Minister how sorry are you?
Well the Prime Minister has made it very clear when he apologised in Parliament.
Why has none been held responsible for this [inaudible]?
Because the use of ATO averaged income data has been used for 20, 30 years. It's been a standard practice of debt collection processes of numerous government's going back to the Hawke and Keating government, but it is simply this Government now that is ceasing using this practice.
Moving forward what changes so this doesn't happen again?
Good question. 12 months ago we, I made the point that will no longer use solely or partially ATO averaged income data that we would use further proof points, that we would be very transparent, especially through the myGov account for citizens, how it was raised, and what proof points are being used to raise that debt.
Furthermore, the Single Touch Payroll construct is now being implemented across all Australian employers, where there's greater veracity of what income has been earned on a fortnight by fortnight basis. So the use of Single Touch Payroll, plus other proof points is the greatest surety Australia's got that the solely, or partially use of ATO average data won't be used as the sole means of raising a debt.