Robodebt royal commission highlighted flawed processes

If you haven’t been playing close attention, you might have missed the disturbing findings coming out of the robodebt royal commission.

The emotional toll on those caught in the system was significant. People were clearly pursued for incorrectly-assessed debt. Even for those who should have been correctly identified as having received overpayments, debts were inflated by a deeply flawed process that used income averaging.

Beyond the stories highlighting this suffering — which shouldn’t be minimised — to the extent there has been coverage, it has focused on the potential misdeeds of senior bureaucrats and former ministers.

In several respects this is logical.

Obviously, deliberate wrongdoing by a minister or senior public servant would be big news. The arcane processes of many bureaucrats shuffling responsibility and accountability backwards and forwards is far harder to get readers excited about.

It’s probably fair to say that some following these proceedings are already predisposed to consider those involved as likely ‘villains’.

It would also make it easier to process if we were able to assign blame to a villain, as it would comfort many to believe this debacle is anomalous rather than systemic.

But while it’s possible that some findings of wrongdoing will emerge from the royal commission, the impression from following the coverage is largely of a process that was irreparably flawed rather than corrupted by malicious individuals.

Indeed, the royal commission has revealed that maintaining the use of this flawed, likely unlawful, methodology in accessing debts became more important than almost anything else.

Certainly it looks like it was more important for many at the top of the involved departments to keep using the process than it was to find out conclusively whether it was legally permissible or not.

Of course, if robodebt represents more of an operational failure of of a government department (however catastrophic) than deliberate corruption, this lesson would sit quite uncomfortably for many.

It would undercut suggestions that the answer to robodebt-style failures can be found by treating welfare recipients differently, restructuring the nature of welfare (abandoning debt recovery altogether or dropping mutual obligations), or the perennial favourite: greater resourcing.

This wrongly concludes that robodebt was an improper purpose; but it is not wrong to remedy genuine overpayment.

The failure instead was in the execution, and stems from the very nature of government. A bureaucracy governed and governing by strict rules, political considerations and self-interest will inevitably veer off-track from time to time.

That is not to say that every department has its own version of robodebt. But why is the default assumption of so many that the flaws manifested in the robodebt process are in any way restricted to these departments?

Or to put it another way: why do we continue to assume that government is competent in all areas other than the ones we can see they are stuffing up?

A good example: many of the same people up in arms about robodebt fervently believe that government should have far greater control of decisions in the economy.

As the Treasurer’s recent fever dream on ‘remaking capitalism’ shows, there is a widespread belief on the left of politics that government is best placed to guide business decision-making in a way that will optimise economic outcomes.

This belief has been completely unshaken by the experience of robodebt, and a litany of government of other government failures and pending failures: from the CovidSafe app to various infrastructure white elephants.

This persistence is deeply puzzling. It’s not just a belief that, at its best, government decision-making will outperform the market; but almost a form of wilful blindness that bad processes will inevitably arise — and with them bad decisions and outcomes.

Ironically, welfare programs are actually a core component of government. It’s something they actually should be good at. And yet repeated evidence says, at times they are clearly not.

Yet we are told we should both ignore these repeated failures, and give government even more power over areas they have traditionally shown to be poor in managing?

It’s not that market-oriented systems are free from flaws — no-one seriously argues that they are — but the flaws are in many ways self-correcting. A business that treated its customers and shareholders the way that DSS and DHS treated its clients would be forced to change the way it operated or the management would be removed and / or the business would go broke.

It will take the findings of a royal commission to compel these departments to do the same.

We need to dispel the idea that the only people and organisations you can trust are independent because of their government funding. In reality, government isn’t a benevolent entity sitting above material considerations: it operates in much the same way as everyone else in the economy— complete with its own self-interest, biases and limitations.

And yet, while the human toll of robodebt is high, the economic toll is far greater when government begins to operate in concert with big business and big unions.

It’s not like we haven’t tried these policies before. These days, government isn’t usually setting out to usurp the decision-making power of markets; but once factors outside the market get involved, it’s hard to rein in.

So what then is the solution to robotdebt style problems? Well, one option is for government to be more transparent, and far more accountable. Too many government programs are never evaluated for effectiveness, and are considered a ‘success’ if they simply spend all their money and generate a bit of positive media for the ministers involved.

This creates many of the perverse incentives on display in the robotdebt royal commission. It would be a good start for us to approach government intervention with some much-warranted scepticism.

Simon Cowan is Research Director at the Centre for Independent Studies.

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