It has been widely reported that the Centrelink debt recovery system has failed the pub test. Why does it matter and what should have been done?

The summer has not been a good one for the Australian government as it continues to reel from self-inflicted crises. The parliamentary expenses scandal continues to claim scalps, with Sussan Ley resigning as health minister over her taxpayer-funded travel to the Gold Coast. But it is the ongoing failure of the Centrelink automated debt recovery system that will continue haunt the government especially when it is expanded to include families, pensioners and the disabled.

Australian politicians of all persuasions often talk about the other side’s policies or programmes failing the pub test, but what does it mean? The pub test is a simple determination by the general public as to whether something is fair and reasonable.

In the lead-up to Christmas thousands of Australians received letters from Centrelink telling them that the income their employer reported to the Australian Tax Office was greater than the income that they had reported to Centrelink. The letter informed them that unless they satisfactorily explained the discrepancy within twenty-one days, Centrelink would seek to recover the overpayment and charge a recovery fee.

Some of the letters sought explanations for possible overpayments dating back six years, beyond which most people keep financial records. Anyone receiving a letter could only dispute the discrepancy online via the myGov website. Some recipients have even been told to repay disputed overpayments, in order to avoid debt collection.

Even while Human Services Minister Alan Tudge defended the system, stating that it was working as intended, and saying that more than $300 million of overpayments had been recouped, it was known to be flawed. Not only was the debt recovery system demanding repayment of money that wasn’t owed it also sought repayment for miniscule overpayments, where the cost of recovery is far greater than the alleged overpayment.

“It is clear that the automated debt recovery system has failed the pub test”

If only politicians bothered to apply systems thinking to problems, they could save themselves a lot of embarrassment, by providing services that not only work but also pass the pub test. Why does it matter? When government policy or services fail the pub test it damages the government’s reputation and erodes political capital upon which it depends. Once political capital is lost, electoral loss is sure to rapidly follow.

Any socio-technical problem requires its solution to be both technically and culturally acceptable. For that reason, any system that seeks to solve a problem must achieve both its stated purpose and pass the pub test. It is quite clear that the Centrelink automated debt recovery system has failed on both counts.