Centrelink Debt Addendum (Robo-Debt Hurts the Economy)
Channel: Daily Insight
Date: 29/01/2019

I forgot to mention one important point in my last video titled, “Victim of Centrelink Robo-Debt” ( https://youtu.be/-ClbuqL12NE ). When somebody receives money from Centrelink, what do they do with it? They spend it of course. They may not spend it wisely, but they certainly spend it. They buy groceries, pay the rent, they might go down to the pub and have a couple of beers with their mates, they might play the pokies, or buy some cigarettes. Most Centrelink recipients would certainly spend most of their money in any given fortnight.

So when the government give people money, they surely must know that most of it is being spent. When they hit somebody with a Centrelink debt a few years down the line, they can’t possibly expect that person to have any of the money left. To say that an individual was overpaid over the last three years, and therefore must pay back the government, is like giving somebody a gift card for their birthday, and then asking for it back three years later. It’s silly to think that they would still have the unspent gift card.

Not only that, but by demanding back a payment that has already been spent — that doesn’t just hurt the individual — that also hurts the economy. Centrelink recipients, due to their low income, are spending most of their money, in turn, directly stimulating the economy. The economy operates on one simple principle: When people spend money, the economy grows. If they don’t spend money, the economy stagnates. So when Centrelink hit people with debt, recipients must cut back their spending in order to pay back the government. This has the opposite effect of stimulating the economy — it hurts the economy.

There’s an easy fix to all of this. A law should be enacted that states that any money given to an individual by Centrelink, is their money. It no longer legally belongs to the government. If Centrelink happens to overpay somebody, due to their incompetence or otherwise, they cannot chase down the debt. The debt will not exist. The money is no longer theirs. If somebody defrauds Centrelink, well that’s a different issue where legal action can be taken. In that case, a debt could exist and could be chased down by Centrelink.

This new law would have two benefits: 1. Recipients will never have to fear having a sudden debt to pay back to Centrelink. They can safely live their lives, spending or saving their Centrelink benefit as they see fit. 2. It will incentivise Centrelink to make sure that they calculate payments correctly. If they overpay people due to an administration error, well that’s on them. They should improve their staff-training and processes. Furthermore, they should make sure that their fortnightly income reporting process is easy and accurate.

As I mentioned in my last video, Centrelink’s robo-debt program is a sham. It should be gotten rid of. When you hit a normal Centrelink recipient with a big debt, you are not only hurting that individual, but you’re also directly taking money out of the economy. That individual will no longer be able to spend that money, and therefore, there will be direct, economic consequences. That’s not good for the individual. That’s not good for the economy.

What do the government fear? Is it really so bad that poor people are spending a little bit more money? Is it really so bad that they are using their over-payments to help grow the economy? It’s not as if the individuals are aware of the over-payments. The government should look at it in a different light. Instead of being the harsh disciplinarian demanding back every last cent, why not give poor people a break and just accept that the money will naturally flow back into the economy, helping Australia.

When Centrelink hits an individual with an unexpected debt and forces them to pay it back, that not only hurts the individual, that not only hurts the economy, that hurts Australia. Centrelink, what is your purpose? Is it to help, or is it to hurt? Centrelink’s robo-debt has got to go!

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