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Transcript of interview with Steve Price: 2GB The Alan Jones Breakfast Show: 16 January 2017: debt and compliance letters

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The Hon Alan Tudge MP Minister for Human Services



16 JANUARY 2017

Topics: Debt and compliance letters


STEVE PRICE: Alan Tudge is the Minister for Human Services. He joins me on the line. Minister good morning.

ALAN TUDGE: Good morning Steve.

STEVE PRICE: It's never easy to tell people that they've been over paid and they've got to pay you back is it?

ALAN TUDGE: No it's not, and in essence what we're doing is, we're looking at what the income data is at the Australian Taxation Office and comparing that with what an individual self-reported to Centrelink.

Where there's a difference between those two figures we ask that welfare recipient to explain why there is a difference. If they can explain it validly then no problem, if they can't then a debt notice is issued.

STEVE PRICE: Part of the problem, it seems to me, from people that I've heard on this radio network and on television is the impersonal nature of the way it's done.

That you get a letter saying you owe a set amount of money and you need to pay it back, if you don't pay it by a certain date then people will start taking money out of your bank account. Is there a more personal way of doing it or is that just impossible?

ALAN TUDGE: That's not quite right, that process. You actually get an initial letter which says; listen there's discrepancy between the two sets of data, can you please explain why there is a discrepancy? Go online, update your details if necessary.

So that first letter is just a request for information, it's a very polite letter. You get a follow-up letter, which is another, just a reminder about that request for information.

It's only the third letter which says that if you haven't responded or you have updated and you still owe a debt, then, yes, you do have to pay that back. So you get a couple of opportunities already.

Also Steve it's important to point out that if you do get a debt notice you can ask for a review, an internal review. It doesn't cost you anything, you simply ring up and ask for a review…

STEVE PRICE: [Interrupts] Part of the problem there though Minister that when you try and ring you can't get anyone to answer the phone?

ALAN TUDGE: The average wait time is about 12 minutes, Steve. Now of course that means that some people get on more quickly, other people get on more slowly but that's the nature of it. There is a dedicated 1800 number that you can call, so you've got experts at the other end who can assist you.

STEVE PRICE: You've sent out- what's the latest number, is it around 169,000 letters?

ALAN TUDGE: Yeah that's right.

STEVE PRICE: But you intend sending out 1.7 million?

ALAN TUDGE: This is over the course of several years, Steve. And you've got to remember there's about 4.5 million people at any one time who are in receipt of Centrelink payments. So over the course of four years or so there's going to be many, many million people who are receiving Centrelink payments.

A letter is only generated to a person if there is a discrepancy between the income data which is what the Australian Taxation Office has on you and what you self-reported to Centrelink.

And then you get the opportunity to explain that discrepancy. In fact, you get three opportunities to explain that discrepancy. If you still can't explain it though then a debt issue is given to you and you do have to pay back the over payment.

STEVE PRICE: Did you estimate that you would get the sort of feedback you've been getting which has been fairly negative?

ALAN TUDGE: Inevitably if you get a notice asking to pay back the money then you're not going to appreciate it. And one of the issues has been that on some occasions the address which Centrelink has on file hasn't been an up to date one, and so the first that a person might hear about their debt notice is when there's a debt collector on their doorstep.

Now we're fixing that problem by ensuring that we're going to be using multiple different addresses including a person's electoral roll address and other addresses to ensure they do get that letter and do get the opportunity to update their record if they do believe, honestly, that they have a valid explanation for why there's a discrepancy.

So we want to give everybody the opportunity to explain that discrepancy, but the core principle, Steve, is a very sound one. If there is a discrepancy we're going to ask you about it - and by the way this has always been the case under successive Coalition and Labor governments and it's immensely hypocritical of the Labor Party to be criticising us for asking this information when they themselves were doing it when they were in government.

STEVE PRICE: Yeah I was going to ask you about that. They have said that these letters should stop, they want a halt to the program, so are they saying that it's okay for people to rip off the system?

ALAN TUDGE: Well it appears to be like that. I mean, what are they saying? I mean they're saying don't ever send out letters anymore to people when there's a discrepancy between the tax data and the self-reported Centrelink data. I mean they themselves [indistinct] …

STEVE PRICE: [Interrupts] That'd just be irresponsible not to do that, wouldn't it?

ALAN TUDGE: That would be irresponsible. I think that taxpayers want us to take every possible means to ensure that people get the right welfare payments. Not a cent more and not a cent less and that's what this system is about. It is about looking at the discrepancies, asking the person to explain that discrepancy, giving them three opportunities to do so. And then if they still can't explain it, then I'm sorry you do get a debt notice issued to you.

STEVE PRICE: And if you went out there and talked to the general public and said listen, we're probably going to need to rein in some of the overpayment on welfare around the country. It's a massive amount of our budget, it soaks up a lot of Australian taxpayer's money.

Are you, a taxpayer, happy that people get welfare payments that they're not entitled to? Tell us yes or no. If you did a poll like that you'd overwhelming support for what you're doing, I would think.

ALAN TUDGE: I think that's right, Steve. I mean the welfare budget is now about $150 billion a year. It constitutes a third of the budget. It represents about eight in ten of every income tax dollar collected.

So all those people going to work this morning, and they're paying their income taxes, about eight of the dollars out of every ten that they pay in income tax, goes towards the welfare system.

STEVE PRICE: Bill's got a quick question for us. Hello Bill, go ahead.

CALLER BILL: G'day Steve, g'day Minister. Look I'm perplexed. If you're so good at matching the data and sending out letters to these poor people who have been overpaid money, why can't you do it before you've paid the money?

Surely if you're able to claw back these billions of dollars after the event, you'd be able to do it beforehand. It just beggars belief that you're doing this. Now these people are …

STEVE PRICE: [Interrupts] Okay, let the Minister answer that question, Alan?

ALAN TUDGE: Yes it's a good question. At the moment we can't do that in real time, but we're spending $1 billion on an IT system so that we can do that in real time. But that's still going to take a couple more years.

What that will do is that instead of having to provide an updated income information to Centrelink every fortnight or so, it will in real time take it from the Australian Taxation Office data.

STEVE PRICE: We've also got Scott on line. G'day Scott.


Yeah hi guys. Look I'd love to question Mr Tudge. Your algorithm is based on taking a yearly

figure, dividing it by 52 and saying that that's you earned every week, and then comparing it to what people are recording or ringing into Centrelink every fortnight.

That's comparing apples to oranges. How on God's earth couldn't you say if there's people [inaudible].

STEVE PRICE: Okay, that phone's breaking up a bit. Minister?

ALAN TUDGE: Yeah that's not always the case. Now in a large number of cases, the employer will have put in to the tax office the fact that you worked for that employer from this particular time to that particular time.

There are some cases though when the employer hasn't provided that full information. And they've only put in the yearly figure. And then person is right.

And so then the discrepancy can and may easily be very validly explained by the welfare recipient to say well hang on I didn't work the whole year, I only worked six months of the year. And then that fixes the issue.

And that's why we're saying that when a discrepancy arises, you get the notification to explain. You can explain it simply, and you get three opportunities to explain that. But then if you cannot explain that discrepancy, then you will be asked to repay that overpayment.

STEVE PRICE: Do you think you could of solved this better in the beginning?

ALAN TUDGE: This has been a process Steve, that's been going on for a very long time in terms of looking at the two sets of data, comparing them and where there's a discrepancy asking the welfare recipient to explain that discrepancy.

Literally for years this has been occurring - going back to the Labor years. And it's only because we've been issuing more notifications in recent months, that I think this issue has hit the public attention.

STEVE PRICE: Susan, good morning.


… thing is that the Minister is saying that the pensioner people - whoever they may be, whatever pension they receive - is the person who is responsible for the problem that has been created. But what about when I'm told that we'll get $656 a fortnight in pension, but one fortnight I receive $750? Now I'm not the one who's made the mistake, but Centrelink has.

STEVE PRICE: Minister?

ALAN TUDGE: I didn't quite understand that.

STEVE PRICE: So what are you saying Susan?


Well it's quite easy.

STEVE PRICE: Yeah, go on. Explain it.


I receive a pension, okay? And let's just say I receive $656 a fortnight. And one fortnight for a number of weeks - every fortnight for a number of weeks - I suddenly get $750. And I think to myself, there's been a pay increase.

STEVE PRICE: And why have you got the extra money, what's the answer?


I'm not the one who's made the mistake.

STEVE PRICE: Yeah, but what's the answer? When you ask you're getting overpaid, what's the answer?


Well I might let everybody know that I've been overpaid, but nothing is ever done.

STEVE PRICE: But I, like the Minister, I'm a bit confused. So you get overpaid for what reason?


Well I don't know for what reason. Centrelink made the mistake.

STEVE PRICE: [Interrupts] So do you ask?


Of course.

STEVE PRICE: And you've asked and what's the answer when you ask?


We don't know.

STEVE PRICE: They say they don't know?


Absolutely. And as far as making phone calls into Centrelink; let me tell you we live in a rural area and we've been on the phone all day.

STEVE PRICE: Okay, Minister, why would overpayment happen and when you query it they say they don't know?

ALAN TUDGE: Yeah that sounds unusual, that case. I haven't got an answer to that. Inevitably in any very big system of which Centrelink is, when you've got 4.5 million people getting a payment every fortnight, there's going to be some procedures which aren't perfect. But I would like to dig into this particular case.

STEVE PRICE: [Talks over] Alright we'll get Susan.

ALAN TUDGE: … provide my details and happy to look at it.

STEVE PRICE: Okay we'll get Susan to hang on, we'll get her number for her. Kerry, g'day, go ahead.


Oh good morning. I'm in the same boat as this lady that just went there. I gave all my information to them. The Centrelink gave the Taxation Department a figure that they said they'd paid me, which I never received.

And I have been able to prove. And now they've given me an amended payment summary, but I've still got this fine. And this amendment payment summary has been changed by about $5000. They made the mistake, not me.

STEVE PRICE: Okay, again Minister can we pass on those details?

ALAN TUDGE: Again, happy to look into that particular case. I don't know why that would be the situation, but happy to look into it and provide some direct information back to that caller.

STEVE PRICE: Okay, we'll give you both of those numbers. Just before I let you go; the Prime Minister on Friday announced that there'd be a change to the way politicians claim their own expenses. Are you happy with the changes? And are you disappointed that some of your colleagues have seen to have been rorting the system?

ALAN TUDGE: I am happy with the changes. I think the Australian public want us to obey the rules and they want the rules to reflect community expectations. And I think this new system will certainly fix the latter. And if people aren't obeying the rules then there's going to be serious consequences.

STEVE PRICE: Yes and it comes to talking about what you and I have just been talking about; the look of politicians being able to work within the guidelines, but use the guidelines to their benefit when you're trying to take money back off people on Centrelink payments is not a good look, is it?

ALAN TUDGE: I think taxpayers want two things: they do want there to be integrity in the welfare system, but they also want the members of Parliament to be obeying the rules and for those rules to reflect the community expectations. And I think that we're getting there on all counts.

STEVE PRICE: Thanks for joining us and thanks for taking those calls. I know that was at short notice, I appreciate it very much.

ALAN TUDGE: No worries at, Steve.

STEVE PRICE: Alan Tudge there, the Minister for Human Services.