Transcript - 'Issues around Centrelink's automated system 'entirely preventable,' Radio National (January 2017)

Hamish Macdonald: Well, more stories continue to emerge of people being wrongly issued with debt review letters from Centrelink. Some people are now saying they were so confused or intimidated by the letters that they opted to pay the debt they don’t believe they owe. A short time ago, we spoke to Mark, who paid a debt back in October, that he’s now sure was incorrect. Mark says it relates to a short period during which he received unemployment benefits. The first indication that something was amiss was a call from a debt collection agency, Dun & Bradstreet. 
Mark: What I think happened was Centrelink would have looked at my earnings over a weekly period, assumed that that was what I was earning over a yearly period, and decided that, based on those figures, I would have owed them money. The first I heard about this, Dun & Bradstreet called me one morning, said that I owed Centrelink $2,200, and said that if I didn’t start paying $700 at least from that day that they would revoke my driver’s licence. I said I couldn’t pay $700. I authorised instead a payment plan of $50 per week. Dun & Bradstreet said that was fine. The next day I woke up, and the $700 was gone out of my account. I had to borrow $200 from friends and family so I could feed myself and get fuel for the car to go to work. When I queried Centrelink about the debt, Centrelink said that if it was onsold to the debt collectors, then there would be no error on their part, and that I definitely owed that amount of money. It was only in the last few weeks when this Centrelink thing started blowing up on Reddit that I begin to question it. And I’m in the process of gathering all the information, payslips from then, Centrelink records, and Dun & Bradstreet debt collection agency records to see if I can get my money back. 
Hamish Macdonald: Well, the former head of the the government’s Digital Transformation Agency has said the error rate within Centrelink’s automated debt recovery system is so high it would send a commercial operation out of business. Paul Shetler was personally hired by Malcolm Turnbull in 2015 to reform the government’s digital operations, but he quit in November after just 18 months in the job. He says the Centrelink debacle represents not just an IT failure, but a management and political failure as well. Paul Shetler, welcome to RN Breakfast. 
Paul Shetler: Thank you Hamish. 
Hamish Macdonald: You just heard that example from Mark. He’s paid debts that he’s pretty sure he doesn’t owe. How surprised are you that this is happening? 
Paul Shetler: I gotta say, I’m not really surprised. I do have to say, I am shocked by this. I think it’s pretty appalling that this kind of stuff happens. I think it was entirely preventable, but I think it’s also the kind of thing that people have started to come to expect. 
Hamish Macdonald: How is it that programs like this get rolled out with so much failure involved in the process, and yet the government says, ‘This is evidence it’s working well?’ 
Paul Shetler: I certainly couldn’t say why the government is saying it’s working well, when it’s manifestly not working well. 
Hamish Macdonald: What’s your view of that line from the government, that this is evidence it’s working well? 
Paul Shetler: Well, I just think you have to look at it to see that it’s not. So it’s quite clear that it’s not working well. I think if you look at a 20% failure rate - I said this earlier to The Guardian, if you look at a 20% failure rate, that company, if it was operating in any kind of a free market, would go out of business, for very obvious reasons. And if it didn’t go out of business, it would be shut down by regulators for fraud. 
Hamish Macdonald: When you are doing something as big a scale as this, isn’t it likely that there’ll be some teething problems at the beginning? 
Paul Shetler: Well, of course it is. Of course it is. You’d be testing this with users every single step along the way, right? I mean, you absolutely have to be doing that. So the idea that they didn’t know this either speaks to an incredible incompetence, which is just absolutely unacceptable, or is not true. 
Hamish Macdonald: Do you know about whether advice was given to the Minister Alan Tudge or to Hank Jongen, the head of the Human Services agency, warning that these sorts of things might occur? 
Paul Shetler: No, I don’t. I don’t have any - any idea about that. 
Hamish Macdonald: Would you be surprised if there had not been discussions about the potential for data matching to throw up these types of -- 
Paul Shetler: I’d be quite surprised, but - yeah. 
Hamish Macdonald: Okay. You were personally brought in by Malcolm Turnbull as head of the Digital Transformation Office, which then became the Digital Transformation Agency. 
Paul Shetler: Yes. 
Hamish Macdonald: You were in the job roughly 18 months before quitting in November. Why did you leave? 
Paul Shetler: Several reasons. I mean, it’s extremely difficult to get an incredibly bureaucratised, incredibly balkanised bureaucracy to decide it wants to transform itself. There’s an awful lot of inertia in the system, it’s built in. But to do that - it’s obviously possible to do that, but you need to have strong support along the way, from the Ministers at the top. Now, we had an approach to doing this. We felt that our approach was borne out, it worked, we delivered a number of exemplars, we delivered a number of programs, we delivered a number of platforms, over the space of a little bit over a year, at costs which are ridiculously low, and very very high user satisfaction. But there was - I think, you know - look, when you have a disagreement with your Minister about the approach that you want to take - I believe in delivery, I think that you can’t do policy without delivery, for one of the reasons we just saw here with Centrelink, right? You have to tie the result to the policy. And the idea that the DTA should just become a policy agency and essentially stop doing its delivery was not something which I agreed with. It’s just not the way I want to work, and it’s not the way that I do work, and it’s not the way that I will work. 
Hamish Macdonald: Which Minister are you talking about? 
Paul Shetler: I’m talking about Angus Taylor. 
Hamish Macdonald: Right. And can you tell me more about that? What was the view -- 
Paul Shetler: He - he just has a different view on it than I do. 
Hamish Macdonald: Which is what? 
Paul Shetler: That - essentially, that DTA should be more of a policy agency - policy, governance and things like that. That it should not be focusing on delivery. And I think that we should be focusing on delivery. So when you’re in a situation where you have a fundamental disagreement on philosophy, and working approach, and I came in to do a thing, and the thing that I came in to do was to transform the Australian Government, and to do so through delivery. And when you have somebody else saying, ‘Look, we don’t want to do that, let’s take a different approach. Let’s take the same approach we’ve tried several times before that didn’t work,’ I don’t want to take the same approach that didn’t work several times before. 
Hamish Macdonald: Was your view - was your ambition aligned with that of your Prime Minister, Malcolm Turnbull? 
Paul Shetler: Well, I couldn’t say that. 
Hamish Macdonald: But he hired you personally? 
Paul Shetler: Yes, he did hire me personally. 
Hamish Macdonald: So he knew what he was getting in you. 
Paul Shetler: That’s a logical conclusion to draw. 
Hamish Macdonald: Right, okay. So you’ve described what happened with Centrelink as - as catastrophic. Can you explain that? 
Paul Shetler: Look, Centrelink has come after a series of other high-profile government failures. We’ve seen this happen repeatedly with myGov, we’ve seen this happen repeatedly with other DHS systems, we’ve seen this happen with CensusFail, we’ve seen this happen with ATO, all in the course of about a year. Several of these. Now, in any other government, this would be viewed as a really bad thing. For some reason, and I’m not really quite sure why, in Australia, people just sort of say, ‘Well, okay, you know, it’s alright.’ It’s not. It’s not okay. It’s not okay when the government cannot deliver the basic services that people are paying for. We are paying for these things. For any other kind of service that we are paying for, if things were just failing like this, it would not be okay. ‘One petabyte of information, not really quite sure exactly what’s happened to all of it.’ That’s not okay. 
Hamish Macdonald: How would you score the Australian government’s attempt to digitise government? 
Paul Shetler: When I came in, I think they were quite ambitious. I said that I thought it was the best digital job in the world. I do think the opportunity here is absolutely immense. And one of the reasons why the opportunity is immense is because we’re starting from the position that we are, right? We actually have a lot to do. So there’s an awful lot we can do. I think that there has to be the ambition to do so. And extremely importantly, I think there has to be the political will to do so, and I question that.
Hamish Macdonald: You think it’s absent? 
Paul Shetler: I think it’s absent. 
Hamish Macdonald: One of the questions that I notice coming up a lot in relation to Centrelink is, ‘Why does the government use this technology to go after the poorest, the weakest in society, but not the multinationals?’ Could you use this sort of data matching technology, the ‘dragnet’ approach, to look at multinationals that have complex structures, that - that take money offshore that might otherwise be paid here in tax, or even billionaires with complicated assets and earning structures? 
Paul Shetler: Well, I think just - undoubtedly, you probably could in some way. You’d run into the same kind of problems, right? I mean, those would be even more complex kinds of matching problems than we’re dealing with here. I think the problem with this one was quite simply that you were trying - you had an algorithm which frankly wasn’t working properly, that was trying to match really disparate data sets - you know, you’re trying to match fortnightly data with yearly data, you’re trying to extrapolate onto results - and it fails. Now that would - I tend to think, given the complexities of international accounting law and things like that - that the failure rates would be even higher, you know, in that kind of scenario? So otherwise I think it would be laudable, and I think it’s something that the government should probably try to do. Every government around the world should try to combat tax fraud. It just seems obvious that that’s one of the things government needs to do. I think this really blunt, crude approach which we’ve taken here would not really work any better in - in those kind of cases. 
Hamish Macdonald: We’re running out of time, but could you fix this algorithm? Could you - could you change what’s happening at Centrelink rather than scrapping the system entirely, as the Opposition wants? 
Paul Shetler: I’m sure you probably could. I think that you’d need to take a much closer look at the data that you’re using. There’s an assumption that the data we all have in government is absolutely correct, and we know that’s not true. We just know that’s not true, because so much of it is rekeyed, there’s so much manual intervention in the collection of these things, so many places for errors to be entered, and so little actual checking and cleansing of the data along the way that potentially you could, but I think it would be a big exercise to do that. 
Hamish Macdonald: Alright, Paul Shetler, We’ll have to leave it there, we appreciate your time. 
Paul Shetler: Thank you. 
Hamish Macdonald: Paul Shetler is the former head of the government’s Digital Transformation Agency.