Robodebt 'stuff up' analysis 'spot on'

A scathing judicial assessment of the coalition government's robodebt scheme as a stuff-up rather than a conspiracy was "spot on", a former senior public service official says.

Former Department of Social Security Secretary Finn Pratt told the royal commission into the failed scheme that such characterisations of public sector mistakes were usually correct.

"In my experience in the public service, it is almost always a stuff-up," Mr Pratt said on Thursday.

"I cannot think of any examples where a conspiracy has been concocted by people to do something deliberately."

He also rejected suggestions his deputy had deliberately kept legal advice from him that the scheme was not lawful in the form proposed.

"Why would she not tell me. What would be the motivation for not telling me," he said.

His comments followed Justice Bernard Murphy's 2021 Federal Court judgment which approved a $1.2 billion settlement for robodebt victims.

Justice Murphy described it as a shameful chapter in public administration with many people wrongly branded welfare cheats.

However, he was not convinced the federal government knew the scheme was unlawful from the start.

"I am reminded of the aphorism that, given a choice between a stuff-up and a conspiracy, one should usually choose a stuff-up," the judge said.

Mr Pratt told the commission he had read Justice Murphy's judgment in the last month in preparing to give evidence and also remembered the media reports at the time.

"I thought his analysis with respect to his honour was spot on," Mr Pratt said.

However, when asked by Commissioner Catherine Holmes if there had been a conspiracy to conceal a stuff-up, Mr Pratt conceded bureaucracies could be good at trying to minimise the damage from adverse reports.

"But ultimately, it is actually really a requirement for the bureaucracy to answer the question and to give the right information," he said.

Robodebt was initiated under the former Liberal-National government and falsely accused welfare recipients of owing money.

Automated debt notices were issued by a process called income averaging, which compared people's reported income with tax office figures.

The commission is investigating how the scheme, which operated between 2015 and 2020, went ahead despite government departments knowing the debt calculation method was unlawful and would have required legislative change.

Hundreds of thousands of Australians were sent debt notices under the scheme, which recovered more than $750 million before it stopped operating.

Mr Pratt told the commission he did not recall having any conversations about the legality of the scheme in the year after its introduction.

But he conceded he had responded to a report on its operations by the commonwealth ombudsman in 2017 that it was operating in accordance with legislative requirements.

Mr Pratt said he suspected he gave "relatively little attention" to the ombudsman's findings, not out of a lack of interest but because the implications for DSS were "innocuous".

"I don't wish to diminish the significance of what happened with the robodebt program and the tragic consequences of it," he said.

"I seriously do not."

Mr Pratt told the commission that when the problems related to robodebt were getting significant media and Senate attention, it was not a major issue in his world.

"This was one headache which wasn't my headache," he said.