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Issue #1762      January 25, 2017

On the backs of battlers

The Coalition government wished the big banks and corporations a Prosperous New Year with the promise of tax cuts and more corporate welfare. But the message was different for the most vulnerable and least well off as the government embarked upon one of its most callous and criminal exercises yet – Centrelink’s Auto-Debt Recovery Program. Thousands of social security recipients and former recipients are being pursued to pay debts they do not owe in a massive exercise to reduce the budget deficit on the backs of the poor.

Alan Tudge, the Minister for Human Services, or more accurately the Minister for Inhumane Services, said “the system is working as intended”. It sure is!

“Every letter that is initially sent is based on a discrepancy between an individual’s income data held at the Australian Taxation Office with their self-reported income data at Centrelink,” Tudge said. This is misleading to say the least.

The ATO sent Centrelink the annual income of recipients which the automated system at Centrelink averaged out on a fortnightly basis. If this average was over the threshold to receive payments then the automated system sent the recipient a debt notice for “overpayment”.

This method of calculation is completely inaccurate and either wilfully dishonest or incompetent. The ATO annual figure does not provide a fortnightly breakdown. So it does not take into account periods of eligibility when a person’s fortnightly income was below the threshold, such as when they were unemployed or underemployed, or had a period of illness. It is inappropriate to compare it with Centrelink data.

The onus of proof is on recipients of debt notices to prove they do not have a debt. The so-called “debt recovery program” is causing considerable and undue stress and anxiety, to which the government’s response was “ring Helpline”!

“Our aim is to ensure that people get what they are entitled to – no more and no less. And to crack down hard when people deliberately defraud the system,” Tudge said when announcing the introduction of the new automated system in December 2016.

He said that it would bring in $4.5 million a day instead of $295,000 as in the past when departmental staff manually checked apparent discrepancies and there were personalised avenues of redress such as the telephone. Savage staff cuts mean those receiving inaccurate notices have little or no means of redress except on the internet.

Blunt weapon

“Centrelink should not be used by the government as a blunt weapon to achieve a deficit reduction on the backs of people who already carry the greatest burden of inequality,” Dr John Falzon, CEO of the National Council of St Vincent de Paul Society said.

Falzon further criticised the inadequacy of the Newstart Allowance, which has not increased in real terms since 1994. The Society believes the allowance should be increased by at least $50 a week and indexed appropriately, he said.

Centrelink, no doubt under the instructions from the Abbott/Turnbull government, went back over six years and has been sending out debt notices at the rate of 20,000 per week. It has set a target of $4 billion in reclaimed “debts”!

How many people keep records for six years? The ATO only requires that they be kept for two or, in more complex situations, five years.

Social security recipients face a Catch 22 situation with gross understaffing at Centrelink offices and jammed phone lines that result in waiting times of hours. Trying to resolve issues without any personal contact on line is near to impossible.

The online myGov portal is difficult to navigate, even for those who are technically savvy, let alone those who do not use the internet.

Of all the people in the community who are least likely to keep records for even a few years, let alone six, the government is targeting them in a desperate attempt to reduce the budget deficit.

This includes people who have experienced homelessness, women who have fled domestic violence, those with mental illness, or workers in and out of work and others on low incomes below the tax threshold.

Thousands of people have already attempted to query and have their alleged debts reduced or wiped. But the system is complex, certainly not easy for someone to understand, let alone have ability to question the government’s actions or the wherewithal to seek legal help or go to an account.

Social security recipients with mental illness, the long-term unemployed, those with inadequate literacy or a poor grasp of English are less likely than the general community to understand their rights, the processes or to have the skills to deal with the system or know where or how to seek help.

The government claims that the vast majority of people are resolving the issue online. But not according to the flood of complaints to welfare organisations, legal aid groups and the media.

The automated system should be halted immediately and all “debts” cancelled. The department requires a large number of additional staff to deal properly with questions of payments which should be done by the public sector.

Budget hypocrisy

Adding insult to injury, automated debt notices follow in the footsteps of the Omnibus Bill with its $6.3 billion in cuts. It was rammed through Parliament with Labor’s support last September. The government had lumped together 24 pieces of legislation into one bill.

Under the Omnibus Act, social security recipients will be charged nine percent interest on debts to the government if they do not agree to a repayment arrangement. The government is also set to introduce a Departure Prohibition Order to stop them leaving Australia until agreement is reached.

These cuts hit parental leave, family payments, students, pensioners, families of migrants among others. Again, they hit the most vulnerable and disadvantaged.

As the government continues with its cuts in the name of balancing the budget, it is still going ahead with its planned tax cuts for corporations and the rich. This will only further reduce income and be used as a justification for further cuts to social spending.

Needless to say the $1 trillion budget allocated for military spending over the next 20 years remains in tact. So too the multi-billion dollar infrastructure program for the private sector in northern Australia. This includes a $1 billion subsidisation of the Adani Carmichael coal mine proposal.

This mine and the proposed subsidy is yet another example of reckless and environmentally destructive spending by a government which dances to the tune of the mining corporations and turns its back on the consequences of climate change and the people.

The government should turn its focus on the big corporations who cheat the public purse out of billions of dollars by paying no tax.

Next article – Editorial – “The way has been shown”

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