The government drastically reduced human oversight of Centrelink’s data-matching system despite holding internal analysis showing that 15% of detected discrepancies were not debts owed by people.
Centrelink’s new automated data-matching system is a source of ongoing controversy. It has resulted in a significant increase in the number of current and former welfare recipients assessed as having been overpaid and required to repay debts.
But debt problems do not really appear to be the fault of IT failure or the inappropriate use of big data. Rather, they appear to reflect an over-simplistic application of policy to the complexity of workers’ lives in a flexible labour market.
A properly designed income-matching system can help to identify anomalies, but the information needs to be appropriate and fit for purpose. The current exercise is using information in a way that it was not designed to be applied, without properly adjusting for the technical and policy differences between the tax and social security system.
The Commonwealth Ombudsman has launched an independent investigation into the Centrelink debt recovery scheme, which was been described as a "diabolical" failure by industry experts.