2UE with Tim Webster
E&OE
TIM WEBSTER: Now the Minister is clamping down on this and he should be applauded for doing it. Very happy to say that he’s managed to afford us a bit of time. Here’s the Social Services Minister, Christian Porter. G’day and thanks for your time.
MINISTER PORTER: Thank you – it’s a big problem and we’re aiming to fix it.
TIM WEBSTER: Okay. Now when you say you’re aiming to fix it, I suppose this is going to be difficult to try and get the money from these people, is it?
MINISTER PORTER: Well, look you know very little was done under the time of the previous Government and what happened was that $870 million odd dollars was held by 270,000 people who had been overpaid when they were in the welfare system. They have left the welfare system, become employed, become self-sufficient, but if you’re inside the welfare system we have the opportunity to garnish their welfare. But once you leave, what was happening under the previous Government is in effect that $870 million started to look like interest free long term loans with no repayment schedule.
TIM WEBSTER: Right.
MINISTER PORTER: So very little was done. And we’re doing three things – we’re applying an interest charge to the debt. So we say to the person, you enter into time-to-pay arrangement with us or we will apply interest. So we establish this incentive for people to enter into modest time-to-pay arrangements.
TIM WEBSTER: Okay.
MINISTER PORTER: It means modest amounts every fortnight. We’re also having departure prohibition orders. If you’ve got enough money to go to Bali with your family, you’ve got enough money to pay it back –
TIM WEBSTER: Correct.
MINISTER PORTER: to the taxpayer.
TIM WEBSTER: Yeah.
MINISTER PORTER: And we’re also getting rid of the six year statute of limitations. Under the old Government the system was basically, if you went off the grid for six years and we couldn’t locate you, all was forgiven. And that will no longer apply.
TIM WEBSTER: No, that can’t be forgiven. Look as I say, you know and people say “ah you know, I ripped off the Government for x amount” – you’re not ripping off the Government, you’re ripping off fellow Australians.
MINISTER PORTER: Well this is 1% of the Australian population owing a debt to the other 99%. You know when you look at what we can recover here, we think over a four year period on a cash basis in the Commonwealth budget, we can recover about $574 million – which is almost as much as Labor say they will raise from what is a very dangerous policy on negative gearing. So if you look at it this way, the very, very dangerous way that has the effect of decreasing property prices.
TIM WEBSTER: Yeah. Tell me, does it become counterproductive at some stage where you have to spend good money to chase bad money? Or the other way around and you just know you’re not going to get the money out of these people?
MINISTER PORTER: There’s always a limit but this has to be seen in the context of that previous Labor Government wasn’t doing anywhere near enough. I mean, letting debts just be forgiven after six years is just without explanation –
TIM WEBSTER: Yeah.
MINISTER PORTER: Astonishing really. You know, we don’t know what Labor is doing with this legislation but I hope it gets passed. But even before this legislation gets passed – about $132 million dollars worth of debt out there will tick over that six year mark and just be completely unrecoverable. It’s got to be fixed.
TIM WEBSTER: Now I’m sure my listeners are thinking this because I am – is it the case that these people are very clever or has the Department just dropped the ball? I mean the one instance, the really bad one, approaching $400,000 dollars ripped out of the system using false identities. How could you get away with that for so long?
MINISTER PORTER: Well, I mean look I used to be a prosecutor and the fact is that if people put their minds to fraud and use of false identities they can very often be successful at least for short periods of time. And with data matching we are certainly improving preventing this from happening. And I don’t want to pretend that is all fraud – I mean…
TIM WEBSTER: No, no. No, no.
MINISTER PORTER: Some of it’s overpayments through genuine mistake. Some of it’s overpayments through wilful blindness of the person who has nominated their proper income and got it wrong. But the reality is that if you leave the system and you’ve got a debt, it’s money that you weren’t entitled to and you have to enter into a time-to-pay arrangement to pay it back. That’s what any other Australian citizen has to do with any other debt – credit card debt, any other civil debt. So we’re just applying the rules consistently to everyone in Australia.
TIM WEBSTER: Okay. So how much of the $870 million do you reckon you can get back?
MINISTER PORTER: Well that’s the point in time figure and we think that over the next four years that the uplift to the Budget in cash terms will be $574 million.
TIM WEBSTER: Okay, well that’s a pretty fair whack money that’s –
MINISTER PORTER: Half a billion dollars.
TIM WEBSTER: Yeah that’s owed to the Australian people.
MINISTER PORTER: Yep.
TIM WEBSTER: Indeed. Well and when you say prevent people from leaving the country, I suppose that’s an extreme option. Does that mean taking their passport off them?
MINISTER PORTER: It means that the Secretary of my department will look at the case files and look at the offenders for whom the prohibition departure order is appropriate. And this is a technique we’ve used in child support payments, so with child support we’ve recovered a great deal of money owed, pursuant to a Family Court order, by simply preventing people’s departure. Now they can depart if they enter into a time-to-pay arrangement and abide it and of course there are discretions that can be exercised in special circumstances. But again, if you have the means to travel overseas for a variety of purposes then you should have the means to pay back a debt. And the average amount of debt, and we’ve focused on some of the bigger cases, but the average amount is about $2,350 dollars. So an average repayment is about $50 dollars a fortnight. We’re not asking anything debilitating here, we’re just asking for a fair repayment.
TIM WEBSTER: Well you know in any other strata of society wouldn’t you, you’d be forced to pay that back. If it was a bank or anybody else you’d have to pay it back or you’d be in trouble. So it should be exactly the same if it’s money that belongs to the Australian taxpayers.
MINISTER PORTER: Well that is certainly the view we take. I must say I was astonished at how little was done over the six years while Labor was in Government on this issue I’m not quite sure why.
TIM WEBSTER: Yeah. Good on you, I know you’re busy this time of day. Thanks for joining us.
MINISTER PORTER: Not a problem.
TIM WEBSTER: Christian Porter, the Social Services Minister.