I recently attended and made up one-third of a roundtable panel at the second annual meeting of the Australian Progressive Legal Studies collective, which was themed ‘Law and Class in the 21st Century: Australia and Beyond.’ The roundtable, comprising Scarlet Wilcock (University of Sydney Law School), Asher Wolf (independent activist) and me, was focused on robodebt.
The text of my address is below. After we three panellists gave our 10-minute addresses, some 90 minutes of questions and answers followed.
Thank you for having me and I want to pay respects to the First Peoples of Australia and of Naarm, the moieties of the Kulin nation, and First peoples here today.
Modern health and social welfare law was built on Prussian social policy, which was still conservative, but glimpsed that the states could exist for the people, rather than merely to glorify the king.
Bismarck introduced public health insurance in 1883, but it was restricted to the employed and working class, with employers paying two thirds of the premium.
Health insurance schemes and the creation of modern welfare states arose in France, the UK and the US and even in NZ (in 1937). All before Australia, of course, which made moves on the fumes of Curtin’s reconstruction after WWII. But it took a loss in the High Court for any serious change to occur. It was a blessing, really.
The first Pharmaceutical Benefits Case (no. 1) led the CJ, Latham, to say that a scheme for subsidised medicine was unconstitutional. The relevant law was ‘far more than appropriation Act’ and had sought to ‘control medicine,’ his Honour said. It was the Victorian Medical Association, which jealously guarded its right to practise medicine privately — as do all medical associations – which funded the litigation. Doctors and dentists, like lawyers, have never wanted their work to be state-controlled. It’s a class thing.
The 1946 referendum putatively overcame the problem by introducing the benefits power, provided doctors and dentists retained private profit rights (that was Menzies’ condition as opposition leader). It unambiguously gave the central Parliament a power to spend on health insurance, war widows’ pensions, which my grandmother received from 1960 until 1999, unemployment benefits, single parent pay, student pay, etc.
So welfare is legally incontrovertible following the referendum; there is no question that it is a legitimate feature of the Australian federation, albeit a constitutional afterthought. Controls on welfare may thus be always already suspect.
But of course the war rages in political economy. Inexplicably because, as Rohan said yesterday, the NAIRU exists. For government policy to hit this axiomatic KPI, around a million people must be unemployed across the country.
But today’s neoclassicals do not countenance the paradox: namely, that achieving 5% unemployment means you have to pay welfare — and that’s on their theory.
This is the neoclassical version of the Marxian reserve army of labour. In theory, any one of the 5% is supposed to be ready replace your job when you fail performance review. Shoudn’t the reserve army be well looked after, kept fit and healthy to make the substitution realistic, a real threat?
Modern mutual obligations qua ‘job-readiness’ admittedly tracks with this. But it makes no sense on the Friedmannian view for welfare payments to be meagre; a well-fed unemployed can take your job.
It’s neoclassical fiction, of course. Most recipients who find themselves with debts historically have tended to be the least job ready because they are single parents who are already engaged in demanding work, or people with disabilities, including psychosocial disabilities.
I want to propose that Robodebt arose out of a unspeakably brutal prosecution regime in the mid 2000s – a history Scarlett [Wilcock] has studied in detail.
My own historical study, both of public and private materials, persuades me that prosecuting welfare debtors under the Commonwealth Criminal Code was a winning strategy tied to a misconceived drive for cheap welfare. Two of the most experienced counsel in Sydney are known to have advised their clients that there was no advanceable legal defence in view of the section’s drafting. Those counsel, the legal profession, and the Justices that heard the cases, may well have misread the s 135.2(1)(a). They thought it was much stricter than it was, or even imposed something like absolute liability on a recipient of an overpayment.
As soon as a charge sheet and summons were served on a recipient who had been overpaid as little as $3000, often at 6am in the morning by uniformed police, they would have known they were in serious trouble.
Facing a recorded conviction and hearing uncontradicted legal wisdom that the offence was practically a strict liability, all accuseds — single mothers, students, and others of certain classes — pleaded guilty and paid up any way they could, lest the conviction consign them to unemployed class forever.
But welfare criminalisation faced foundational damage in 2011 when one recipient went to the apex court alleging she had no legal duty to report her income to Centrelink, and so the criminally offence was a nonsense. With the help of Vic Legal Aid, she won. She was a single mother and migrant who had been sexually harassed at the workplace she had been overpaid by.
The government introduced curative legislation to stop the estimated 15,000 people with the same conviction profile appealing. But in 2013, Victoria Legal Aid, instructing now Chief Justice of the Federal Court of Australia, her Honour Debbie Mortimer, appealed to the High Court for Kelli Anne Keating. The appellant argued in essence that the principle of legality made the retrospective affixation of a legal duty through curative laws a nonsense. And, at any rate, the convictions had not been secured through the adduction of evidence being led on any fault element of s 135.2(1)(a) — which would require knowledge. Keating also won, with the result that the 15,000 convictions in question before 2011 remain unsound. Not only that — around 99.75% of those convictions are unappealed and unremediated. Something like 25 have been actioned.
But when the government changed in 2014, everyone except Greens Senator Siewert forgot about it. No proposal for reviews have gathered steam.
By the time Keating was handed down, the Commonwealth Director of Public Prosecutions (CDPP) had grown wary of ‘welfare prosecution as usual.’ Their new practice instructions reported that, in essence, they would no longer prosecute people who failed to report their income. Only evidence of actual false statements would whet the bitter passion of the federal prosecutor. And so in circumstances where the possibility of recouping what had historically been 40% of asserted welfare debts had been squibbed through two High Court losses that had constrained the criminal system, the government found itself bereft of an alternative recoupment mechanism.
At the earliest stages of robodebt, negotiations between the CDPP and the agencies were attempted. They appear not to have gone far, despite veiled threats from the agency to the effect that the CDPP’s funding was tied to prosecution referral acceptances. And so, at around that time, in early 2015, the government identified a civil system of recoupment as the most efficient way to make welfare cheap again.
Debts, both historical and current, could be detected through automated processes whose essential flaws – both legal and mathematical — remain, even after the Royal Commission, underexplained. I can speak a lot more about this. (Consider the welfare concept of an ‘income bank’).
These erroneous debts were then asserted in threatening letters bearing AFP logos, which took the place of the uniformed police at the door. If no disproof of guilt was adduced, the asserted debts were then extracted via a contracted force of debt collectors or via tax garnishes without notice. The collectors bugged, nagged, nudged, and threatened debtors, always under a false aegis of a criminal threat, while the tax office just raided tax returns.
The eventual Royal Commission never told this backstory. It did some great things, but it also never touched on the technical problems with these debts. It tried, but it kept the legal problems high level. Commissioner Holmes did not examine the software that lay behind the statutory calculators. This is the automation problem. Apps cannot yet apply law.
And today it gets worse. Another legal misunderstanding by the agencies means that hundreds of thousands of debts going back to 2003 are unlawful. In the last few months, a person held in prison for one of these unlawful post-robodebts was quietly released. Another remains in prison, with the Ombudsman, CDPP, welfare agencies and government, all aware, and, in essence, unperturbed. In terms of class, misuse of welfare law has resulted in an effective bill of attainder, creating a criminal class through so many legal blunders
To reorient Max’s quote earlier from Althusser this morning – that the law makes the capitalist relations of production disappear – I think robodebt shows us how the law does not always succeed in ‘disappearing’ capitalist relations. And as law scholars, I think we can hope that the law can also bring them into relief. In our dreams, I guess.