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.
The shadow human services minister, Linda Burney, has requested the auditor-general investigate Centrelink’s procedures. And independent MP Andrew Wilkie asked the Commonwealth Ombudsman to step in after receiving more than 100 complaints to his electoral office about problems with the debt-recovery process. The Ombudsman subsequently launched an investigation.
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.
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A large share of Australians experience income changes over the course of a year. This reflects family and demographic changes – in partnership status or numbers of children – and labour market changes, such as starting, changing or stopping jobs.
Data for Australia suggest high levels of labour market flows. The most recent data show that in the 12 months to February 2011, more than 4 million people changed their work status. While the average number of unemployed people in each month of 2011 was around 600,000, overall 1.7 million people looked for work at some time during the year. But, of these, fewer than 150,000 (8%) spent the whole year looking for work.
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The debt controversy has sometimes been blamed on “faulty IT” or the application of inappropriate “big data” approaches. Rather, it is the assumption of regular and unchanging income that is a major problem. This shows a lack of knowledge of the actual working and family patterns of a large share of Australians.