Australia to probe scheme that ripped $1.2B from welfare recipients

Australia's Labor government will hold a wide-ranging inquiry into an automated debt recovery scheme set up by the former conservative coalition which wrongly calculated thousands of welfare recipients owed money to the government.

"We know that almost 400,000 Australians fell victim to this cruel system. A human tragedy with very real consequences for its victims," Prime Minister Anthony Albanese said during a televised media briefing on Thursday.

The Centrelink Robodebt programme, which was in place between July 2015 and November 2019 when Scott Morrison was social services minister, was introduced to ensure welfare recipients were not under-reporting their income and over-receiving government payments. It used computer algorithms to recover the money with little to no human oversight.

The Royal Commission, the most powerful type of government inquiry, will check the requirement for such a scheme, who held the responsibilities, the financial costs to the government and will look at measures to prevent similar events from happening again. 

The final report will be delivered by April 18, 2023.

'Shameful chapter'

Catherine Holmes, former chief justice of the Supreme Court of Queensland state, has been appointed the commissioner and will have the power to compel witnesses and recommend criminal charges.

"Robodebt was a shameful chapter in the history of public administration in this country. It was a massive failure of policy and law," said Government Services Minister Bill Shorten.

About $1.2 billion was "unlawfully raised" from 433,000 Australians because of the programme, Shorten said. 

Last year, a federal court approved an approximately $1.2 billion settlement after the Liberal-National coalition late in 2020 agreed to settle a class action brought by the victims.

Then prime minister Scott Morrison apologised in Parliament for the distress but did not admit any legal liability. 

Labor, which returned to power after a May federal election, had promised the inquiry during the campaign.