How The Other Half Lives: Welfare Torts Vs Travel Rorts

The Turnbull government is in chaos, and we’re not even halfway through January, writes Ben Eltham.

Human Services Minister Alan Tudge finally returned from his summer holidays this week.

While he was away, the Department he oversees was melting down. Centrelink was sending out tens of thousands of threatening letters to innocent Australians, falsely accusing them of welfare fraud.

As we detailed last week, it was a fiasco entirely of the government’s own making. The “robo-debt” letters were generated despite obvious and glaring failures to match up elementary information. Centrelink and the Department knew that the robo-debt system was fatally flawed. They went ahead anyway.

So what did Minister Tudge do when returning to the smoking ruins of his portfolio? Nothing. Nothing at all.

Tudge finally fronted the media on Wednesday morning, talking to the ABC’s Hamish Macdonald. Macdonald asked him whether the government would scrap the robo-dobt algorithm.

“No we won’t be,” Tudge replied.

There’s an important principle here, Hamish, that we’re trying to implement and that is to ensure that there is great integrity in the welfare system because after all the welfare system constitutes a third of the budget.

We want to make sure that people get the welfare entitlements that they’re entitled to and no more and no less. Consequently we do have a robust compliance system in place and in the last six months alone, we’ve recovered over $300 million to the taxpayer through that process. So the system is working and we will continue with that system.

It’s a measure of how out of touch this government is that Tudge thinks the “system is working.” Centrelink has sent out more than 232,000 robo-debt letters since July 2016. Many of those letters, perhaps a majority, are wrong.

Centrelink itself is in melt-down; staff are taking industrial action; there are massive queues at offices; 29 million calls went unanswered last year.

But have no fear. The system is working.

Alan Tudge’s wilful denial is in line with the government’s start to the year, which has been disastrous, even by the standards of the Turnbull administration.

The other major media story has been yet another travel entitlements scandal, which blew up after the disclosure of politicians’ travel claims for the first half of 2016. The travel claims of Health Minister Sussan Ley raised particular interest, as it turned out she had made all sorts of claims that appeared dubious, to say the least.

Ley has claimed tens of thousands of dollars to charter planes that she herself flew, in order to keep her commercial pilot’s accreditation. She chartered flights to the Gold Coast, supposedly for government business, where she just happened to buy an apartment at auction.

Ley also charged the taxpayer for travel to a New Year’s Eve party, also on the Gold Coast.

Worse, Ley’s explanations for the travel claims ranged from speculative to frankly unbelievable.

For instance, she claimed that her purchase of the Gold Coast apartment was just a happy accident, and “the purchase of this particular property was neither planned nor anticipated.” That explanation pleased no-one, and it wasn’t long before inquiring journalists found evidence of Ley inspecting other properties around the Gold Coast in previous months.

In a telling detail, it also emerged that Ley bought the apartment off a Liberal Party donor.

Within days, Ley’s position became untenable. She stepped down pending an investigation.

Ley will be replaced as Acting Health Minister by none other than Arthur Sinodinos, a man who has quite a chequered past when it comes to integrity scandals himself (at one stage in 2011, Sinodinos was chair of a company part-owned by Eddie Obeid, who is now in jail for corruption).

We’re just 12 days into 2017, and Malcolm Turnbull has already lost another minister.

Ley’s performance as Health Minister was already under scrutiny, given some of the major policy issues the portfolio faces. But her confusing and contradictory explanations of what appears to be straight-forward rorting leave her future in grave doubt.

In her media conference, Ley claimed simultaneously that “I have not broken any of the rules”, but also admitted that she would pay back some of her travel claims. So, if she did nothing wrong, why pay the money back?

Ley will step aside and the Department of Finance will look over all her travel claims. But, really, who actually thinks this is okay? Few in her own party, and even fewer in the general electorate.

The issue of political entitlements is a long-running sore on Australian democracy, one that our politicians resolutely refuse to address for reasons of self-interest.

Most would agree ministers and backbenchers should have reasonable travel covered by taxpayers, for instance when travelling to Canberra or back to their own electorates.

The tricky part comes in defining just what “ministerial” or “parliamentary business” actually constitutes. Politicians are busy people who are often asked to attend functions and meet with stakeholder groups. Given the vast responsibilities of public office, their busy work lives will regularly intrude on their private activities.

But the current rules for travel entitlements are so vague as to be essentially meaningless. As the Auditor-General found in 2015, parliamentary travel entitlements are complex, opaque and difficult to define. They are also self-administered: certification is essentially left to the politicians themselves. The scope for rorting should be obvious.

That being the case, Sussan Ley’s troubles are all her own doing. The controversy has blown up largely because of the astonishing shamelessness of the expenses she claimed for: holidays on the Gold Coast, New Years Eve parties, house-hunting expeditions, not to mention the amazing amount spent on a short trip in the United States.

But Ley’s conduct also reveals something else about our increasingly rotten political elites: the normalisation of political favours.

Consider the party that Ley attended on New Years Eve. It was thrown by Brisbane businesswoman Sarina Russo.

To call Russo “influential” is understating things. The self-made multi-millionaire is one of the most ubiquitous figures in Queensland’s business elites. Beginning with a single typing school in Brisbane, her empire now sprawls across the country, featuring job services (largely paid for by the federal government), training colleges, and even the Brisbane campus of James Cook University.

Russo’s largest source of income is the federal government, through various tenders related to the Job Network, most of which have been awarded since the Coalition took office in 2013. It’s not surprising she wants to ingratiate herself with a federal minister.

In our present democracy, it’s probably impossible to stop politicians forming relationships with the businesspeople that donate to them. But it also shows what a rarefied and privileged world our political elites inhabit.

Should taxpayers fork out to help politicians look for investment properties? Or keep up their pilot’s accreditation? As soon as you ask the question, you know the answer.

But the nature of political life distorts politicians’ judgments. Surrounded by wealth and privilege, they can come to see perks and entitlements as a normal part of the job.

When they over-claim on their entitlements, politicians get a different sort of response from the government. What will happen to Sussan Ley if she has over-claimed? She will have to pay the money back, perhaps with a 25 per cent penalty. But she certainly won’t get the sort of treatment Centrelink clients are receiving: there will be no debt collectors appointed, no threats, and almost certainly no fraud proceedings commenced.

The ABC’s Hamish Macdonald asked Alan Tudge about this on Wednesday morning. Would Centrelink clients be shown the same sort of leniency?

Tudge’s answer? It’s totally different. “I don’t think in relation to some of the examples that I have seen in recent times that people have deliberately sought to defraud the system,” he claimed.

You have to conclude that many politicians simply see themselves as better and more deserving than welfare recipients. Separated from the lumpenproles at Centrelink by the great gulfs of wealth and power, they know that very different rules apply.