Centrelink scandals undermine Morrison’s Budget credibility

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By Leith van Onselen

The Centrelink robo-debt fiasco is one of the bigger examples of Budget mis-management under this Coalition Government.

Treasurer Scott Morrison promised Australians that Centrelink’s new data matching software would deliver more “accurate and appropriate income testing” by substituting manual checking of data for a computerised algorithm. It would also supposedly “cut red tape and ensure that mistakes are minimised”, and raise $661 million for the Budget.

In actual fact, the opposite occurred. The ATO data has been found to be incompatible with Centrelink’s data, promoting Centrelink to fraudulently issue thousands of debt notices to people who owe them no money.

And Centrelink has also been embroiled in a scandal involving recipients of family tax benefits (FTB). As reported in Fairfax today, Centrelink hit at least 21,000 families with bogus FTB claims last year, with at least one-in-three claims by Centrelink made in error.

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Peter Martin believes the Centrelink scandals have undermined trust in the government and Scott Morrison’s ability to deliver the Budget:

Scott Morrison’s problem in delivering the budget is that people don’t trust him…

Hundreds of thousands of Centrelink clients and millions of their friends and family now know that what he says doesn’t necessarily happen. Like a bad golfer, he talks up his swing but doesn’t follow through…

When we stop trusting the government we stop trusting its ministers, especially if those ministers have been promising things we know haven’t come to pass and by indifference have hurt our friends and family.

Whether it is assurances that company tax cuts will really be good for us, or bright new ideas we are told will get more of us into housing or close the deficit, we will rightly be sceptical. Eventually we will become so sceptical that we will become impossible to win over, no matter how good the budget.

Morrison was also behind last year’s embarrassing Census debacle, which saw millions of Australians fail to complete the survey online amid heavy user traffic and accusations of hacking, and cost taxpayers up to $30 million.

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No wonder Morrison’s credibility is crumbling.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.