New debt deals questioned
Incentives for Centrelink’s new debt collectors have revived Robodebt concerns.
Centrelink is hiring a new set of outsourced debt collectors, giving them rigorous financial targets for recovering money from customers.
Government documents have acknowledged that the outsourcing model can leave debt collectors with incentives that result in “unintended and perverse” behaviour to meet targets.
They are placed in fierce competition to either win more work or face penalties.
Centrelink will engage three different debt collection agencies, initially setting them to work collecting three different kinds of debt.
However, those that collect the most debts will receive an increased share of the work, while those that fail to meet targets will lose work.
Concerns have been raised that these performance measures will encourage debt collectors to cut corners or engage in unscrupulous behaviour to maintain a level of performance.
It has raised echoes of the government’s botched Robodebt scheme, which featured intense pressure on welfare recipients to pay back debts that it later turned out they did not owe. The Commonwealth is in the middle of a $1.2 billion settlement over Robodebt.
Centrelink’s tender documents for the debt collectors say that engaging in illegal behaviour in the past would not rule out a firm from securing the new contract.
Tenderers must comply with the criminal code and racial, sex, age and disability discrimination laws, but the documents do not detail any consequences if they have not in the past.
“From this tender document, I can't see - in the space of debt collection - what really has been learned from Robodebt,” says Dr Elise Klein - a senior lecturer in public policy at Australian National University.
“There's an almost encouragement that you're seeing there around performance and going after people.
“When there's an emphasis on competition, taking account of people's circumstances comes second or third down the list.”