E&OE TRANSCRIPT

SUBJECTS: Albanese Government severs ties with debt collectors; Grattan Institute budget comments; improving the NDIS; Commonwealth Bank household income predictions

PATRICIA KARVELAS, HOST: Over a five-year period, the controversial Robodebt program unlawfully raised more than $1 billion in debts against 433,000 people. Some of these Australians were chased down by debt collectors for thousands of dollars they didn't actually owe. Now the Albanese Government has severed those external contracts in a hope of stopping the scheme from happening again. The Government Services Minister Bill Shorten is our guest this morning. Bill Shorten, welcome to the program.

BILL SHORTEN, MINISTR FOR THE NDIS AND GOVERNMENT SERVICES: Good morning, Patricia.

KARVELAS: The Robodebt scheme happened because of decisions made by the Government. How does severing contracts with external debt collectors prevent something like this from happening again?

SHORTEN: One of the problems with Robodebt was that the use of external debt collectors meant that some people received very inconsistent treatment from the Government. And when I say inconsistent, they received a very poor treatment from the external debt collectors. So, we've made the decision that as one of the lessons of Robodebt, that we will not be continuing to use external collection agents from the 30th of June. So, we're going to run out the contracts and, in the future, to ensure a higher quality of treatment and consistency of standard, Services Australia will be working through debt processors without reference to third parties.

KARVELAS: So just give us a sense right now how much is kind of collected by these external providers? How many are in the field, how much work are they doing in this space?

SHORTEN: We have currently official orders with three external collection agents which are going to expire and not be renewed. We've advised the debt collectors of this decision and we're phasing them out between now and the 30th of June. So specifically, there's about 10,800 Australians where we're using external collection agents to collect debts that are owed to social services. These debts will be transitioned back to the Agency. Currently, there's about $43 million worth of debts which are being chased by external agents, which we're going to transition back to within the Government.

KARVELAS: Will you need more resources in the department to chase those debts? Because obviously the work still needs to be done. It's just you don't trust external providers to do it.

SHORTEN: The expense previously attributed to the use of these debt collectors will be diverted to Services Australia in-house capacity. So, we believe that'll cover the cost of additional agency staff for debt recovery activities.

KARVELAS: Will you need to roll out more new protocols to try and change the way that those debts are collected in terms of the actual, you know, functionality of it?

SHORTEN: Well, there's a bigger piece. And we're also waiting for the Robodebt Royal Commission, but the bigger piece, first of all, is that when the Government thinks that someone owes a debt to the Government, we've got to have a much more methodical, transparent process to establish the accuracy of the debt. The best thing you can do is not make a mistake to begin with, and I mean the Government not make a mistake and overpaid. In the event that there's overpayment, our starting position has to be communication with the person, which is not incomprehensible, not full of legal jargon, something which doesn't immediately put the onus back on the person to prove the Government's wrong. And that was one of the problems at the heart of Robodebt. The onus got reversed and the Government, in a sort of absolutely scaled up venture, was issuing debts against people with flimsy evidence and then said to the person, you've got to prove us wrong. So, we are overhauling the whole process of even the Government alleging there is a debt to begin with and not assuming that, not telling the person, they have no rights to question it and not putting all the onus and homework back onto the individual.

KARVELAS: I want to move to another issue, if we can, Bill Shorten. Yesterday, the Grattan Institute made several recommendations to help rein in the Budget, which is now less than four weeks away, of course. They said we need to look hard at the NDIS. What are you going to, where are you going to find the savings in the NDIS and how much is this budget that key moment?

SHORTEN: Well, first of all I would start the conversation about the NDIS from a different viewpoint. The NDIS is changing lives and it's doing wonderful work for a lot of people, but when the experience is not good for the participant, then it can be quite exhausting and anxiety creating. So, I think that the way that we make the scheme better is to make it better for the participant, make sure that every dollar that the scheme has is getting through to the participant and not going purposes which are not delivering outcomes. If we run the scheme better for the person, the participant, the person with severe and profound disabilities, I also think that some of the other anxieties which are about money being wasted will be dealt with, but we've got to do it from the frame, not that the scheme is not going to be funded or not, that people are just somehow disabled people are to blame for the budget, but rather if we have a well-run scheme that's going to deliver better outcomes for people on the scheme, but also I think be a better run scheme where we're spending dollars on outcomes, not just costs.

KARVELAS: So, should we expect that kind of reform to be delivered in the May Budget?

SHORTEN: We've got a big review of the scheme which we announced before the election, which is well underway. We've been changing the leadership of the scheme. We've been reforming individual features of the scheme already, like getting people who are medically fit for discharge from hospital on the NDIS, not languishing in hospital for months and months, and we've been reducing some of the legacy cases. So, the Budget will no doubt have measures which will be about improving the NDIS for participants. But the Budget isn't an end in itself. So, we're doing work right now. There'll be more work being done and there'll be work also finally announced when the review happens. But for participants on the scheme, the Albanese Government is not starting from the viewpoint that the person in the wheelchair or the white cane or the child with developmental delay is the problem - you're not. The issue is that we want to make sure that’s - 

KARVELAS: It's rorting and some of the service providers who are, according to the text line which went off when I said you were coming on, is rorting in the system, right? But how do you actually get to the heart of that? And does it involve actual structural reform rather than just cop on the beat? I mean, actually changing the way the system works.

SHORTEN: I think without being deliberately vague. It's all of the above. I think that we need to invest in the capability of the National Disability Insurance Agency to get initial decisions right. There are good people there. We need to support them. I think it is stamping out unethical behaviour, and unethical behaviour can be everything from overcharging to over servicing to indeed criminal activity. We established in the October budget last year a fraud fusion taskforce, and that is helping, I think, deliver better outcomes for participants by making sure that their accounts are not getting overcharged or mistreated. But also, it does involve a conversation with the states. What happened when the NDIS was established is it was established to look after people who were most profoundly impaired and disabled, but not for every Australian with a disability. What we've seen, in my opinion, is a retreat from service delivery for people with milder forms of impairment by the states. And so, they need to come back to the table as well. So, when I say it's all of the above, there's a lot that's going on in the scheme, which is life changing. But we've got to make sure that people with disability don't feel they're treated as human ATMs and that they’re not treated un-empathetically.

KARVELAS: Yes. Can I just get you on that state issue? Don't mean to be rude to interrupt. Sorry. No, let me ask you this. Other states, you say they've got to come back to the table. Is there any evidence that that's happening? What can you tell us about those funding arrangements with the states?

SHORTEN: The NDIS is not a standard governance model. In other words, it's not just overseen by the federal government, but it's overseen by the board of the National Disability Insurance Scheme, which the states help appoint people to. I found the Disability Ministers from the States very motivated, very keen to work with me. That's why we've been doing some pretty good work, to be blunt, fixing up hospital bed block and getting people out of hospital who shouldn't be there. But there'll be discussions, no doubt, between the First Ministers and the Treasurers saying, hey, at the moment the states are not paying 50/50 of the NDIS. It's heading to closer to 30% states and heading towards 70% paid by the Commonwealth. What we do need the states to do, and with them, is we need to have better supports for people whose disabilities are not so severe they require to be on the NDIS. The challenge is if all we have is an NDIS, then every solution will send people to the NDIS. Whereas if we've got more support in the community for mental health, if the school system works with kids with disabilities more consistently, if hospitals and the health system are more attuned to helping people with disability, then we won't see, I think, the NDIS be the only lifeboat in the ocean. But it's got to be cooperative, and my state colleagues are all interested. But there is a conversation to be had there, along with improving the processes within the NDIS, which means that money's not being spent on the wrong things, and it's not being siphoned off by rent seekers in between the taxpayer and the participant.

KARVELAS: Bill Shorten, before I let you go on another pretty significant story and you know, as a Cabinet Minister, you must be concerned about this. The Commonwealth Bank's chief economist is predicting that household incomes will collapse because of a combination of high inflation and interest rates coupled with growing levels of tax. Are we heading down the road of a sort of household catastrophe for people trying to keep themselves afloat?

SHORTEN: I wouldn't use such language to be honest.

KARVELAS: You can use your own, but you know. 

SHORTEN: Yeah, yeah. But no, but forgive me for not going to the, Patricia, oh, you know, it’s a catastrophe.

KARVELAS: Well, the Commonwealth Bank says it's going to get pretty, pretty ugly for households.

SHORTEN: Oh, well, I don't think the Commonwealth Bank's telling mortgage holders something that they're not aware of. The increases in the mortgage rates are making it hard for people paying off a mortgage. There's no question, there’s now thousands of dollars extra and families can't simply replace that income miraculously through some other means. What the federal government's doing, which I think is significant, is that we are trying to help with inflation. So, we're trying to do budget repair. We're trying to look at the blockages in the economy. We're trying to do relief in terms of cost of living. So that's everything from cheaper medicines to making sure that we are helping people with their energy prices, and repairing the economy means tackling things like the skill shortages, which just haven't been there, our energy market. So, we're doing what we can, tackling inflation. There's no doubt that families are doing it very hard with mortgage increases.

KARVELAS: Thank you so much for joining us this morning. 

SHORTEN: Pleasure, bye.

KARVELAS: Minister for Government Services and the NDIS, Bill Shorten there.