Robodebt: five years of lies, mistakes and failures that caused a $1.8bn scandal

Robert was peppered with questions from the media.

Over five months, victims have told of financial suffering, mental health effects, and the frustration, anger and hopelessness of coming up against an opaque government system designed for budget savings, not fairness. Several said they would never access social security again.

Two mothers, Jennifer Miller and Kathleen Madgwick, told how their young sons had taken their own lives while dealing with the robodebt system, including one who was hounded over an unlawful debt of $17,000.

What follows is the inside story of the robodebt scandal, based on evidence given to the royal commission over 46 days of public hearings and many of the thousands of exhibits tendered to the inquiry.

Months earlier, on 14 October, officials from human services and the Department of Social Services (DSS) had met to discuss possible measures for the next budget.

Scott Britton, then a national manager of compliance risk at DHS, told the royal commission there was always pressure to come up with ideas for savings.

The plan they devised was to remove the human investigator and automatically generate a welfare debt if the averaged PAYG data did not match what the welfare recipient declared each fortnight and the recipient could not explain the difference. It promised to save the budget about $1bn, but fundamentally changed how the system worked. Rather than government proving debts were owed, welfare recipients would need to prove they were not.

Due to the division of responsibilities between the two departments, DHS needed DSS approval to bring forward the plan.

But the environment in early 2015 was far from ordinary. Officials told the royal commission of a culture of fear and pressure, chiefly led, according to witnesses, by the DHS deputy secretary, Malisa Golightly, who had policy responsibility for the scheme. Golightly died in 2021. In one incident, Golightly was accused of throwing her phone at her desk, breaking it. In another, she is said to have yelled abuse for several minutes.

A series of crucial events between late February and 4 March paved the way for the unlawful scheme to be approved by cabinet.

Britton and Withnell said they had no recollection of why the change was made.The reason for the change appears to hinge on a conversation between Golightly and the then deputy secretary of the DSS, Serena Wilson.

The second time, despite being accused by Greggery of reconstructing events and dishonesty, Wilson maintained her initial defence: she had been misled by Golightly.

Only two days later, Guardian Australia reported concerns raised by the independent MP Andrew Wilkie, who said constituents were being hit with year-old debts and given three weeks to provide documents to prove they had not been overpaid.

He said he informed Campbell of this when she returned from leave, a claim she denies. She and Musolino both told the commission they were never told about the moves to seek legal advice from the AGS.

But the advice from AGS was never sought and no witnesses could say why. Jackson said only Campbell had the authority to withdraw the request.

From January 2017 the former senior assistant commonwealth ombudsman Louise Macleod led an inquiry into the scheme. As Macleod told the royal commission, it was her first and last investigation.

She broke down in tears on the stand when shown documents over the course of several hours revealing that vital internal emails questioning the legality of the scheme had been withheld from her investigation. The one that finally got to her showed a huge proportion of debts were being raised using income averaging.

After a break, Holmes asked Macleod to explain her emotional reaction.

But according to the DSS lawyer Anne Pulford, her superiors simply came back to her for a second bite of the cherry.

Appearing for a second time at the commission, McGuirk was shown emails that revealed she had given program approval to the robodebt scheme in May 2015 in an earlier role at DHS. That is, she is alleged to have sought legal advice to justify the scheme she had approved two years earlier.

McGuirk, who was not overly senior in either department, said she could not recall those 2015 emails. She said she had not located them while preparing for the commission and denied intentionally withholding them.

About three months later, on 20 July 2017, Macleod was in the room when the respected barrister Peter Hanks QC gave a law conference speech arguing the scheme was unlawful.

DHS lawyers were also there, but no action was taken to check whether Hanks was right.

The DHS never appealed these AAT decisions, which thus remained confidential.

In August 2018, draft legal advice on an AAT case from private firm Clayton Utz finding robodebt unlawful was never finalised, not shown to the DSS secretary, now Kathryn Campbell, and not acted on. Clayton Utz was paid however.

Victoria Legal Aid filed papers in the federal court on 4 February 2019, making good on warnings it had raised back in January 2017.

It had found a plaintiff, a then 31-year-old registered nurse named Madeleine Masterton, who had bravely agreed to take the commonwealth on.

The AGS told the DHS Masterton had good prospects of winning her case; the robodebt scheme was probably unlawful. The advice was dated 31 March 2019. The AGS recommended the department seek an opinion on the scheme as a whole from the solicitor general.

While the start of the scheme was dominated by gaps in recall from key witnesses, its conclusion was marked by explosive claims and counter-claims.

It all came to a head on 12 November. Robert was standing outside the cabinet chambers to be called for an expenditure review committee meeting to discuss the future of the robodebt scheme. Leon and Ffrench were there, as were other officials from DHS, DSS and Finance.

The group was informed the robodebt agenda item had been pushed to the following day. Robert approached the attorney general, Christian Porter, to ask if he agreed with the solicitor general.

Robert claimed he had finally got the approval he needed to stop the scheme.

A month later, Leon lost her job when the Coalition announced her department would be replaced by a new agency, Services Australia.

He did not apologise.