Organisations Assessment 2 – Problem-Solving Case Study Robodebt Scandal

Senior Executive action in the aftermath of the Robodebt scandal

The case

The “Robodebt” scheme was a policy initiative designed by the Australian Government under the leadership of the Coalition (the Liberal National Party) Government. The scheme was designed to “claw back” excessive welfare payments made to members of the Australian community receiving welfare payments. People receiving welfare payments are unemployed and typically amongst the most disadvantaged and vulnerable members of the community.

The scheme acquired the name “Robodebt” because a central feature was the use of an algorithm to determine if people on welfare had been “overpaid”. Those people identified as owing the Government money were then pursued to pay back the amount determined by the algorithm. The problem with this approach was that the algorithm used an income-averaging methodology, which led to incorrect conclusions about the debts people owed the Government. This meant that many people were chased for debts that they did not owe. Welfare recipients chased for debt also had very little recourse in terms of challenging these debts or speaking to a human being to help establish the facts about their income and correct the record. It was subsequently established by the Royal Commission into the Robodebt Scheme that this was extremely distressing for many people. Much of this distress might have been avoided, had senior leaders, including the highest-ranking manager of the Department responsible – the Secretary of the Department of Human Services – listened to concerns voiced by front-line staff within Centrelink (the agency responsible for welfare payments), who blew the whistle on the illegality and immorality of the scheme.

A summation of the Commissioner, Catherine Holmes, from the ABC:

Commissioner Catherine Holmes branded the former Coalition government’s debt-raising scheme an “extraordinary saga” of “venality, incompetence and cowardice”.

“The report paints a picture of how the Robodebt [scheme] … was put together on an ill-conceived, embryonic idea,” Commissioner Holmes wrote.

“It is remarkable how little interest there seems to have been in ensuring the scheme’s legality, how rushed its implementation was, how little thought was given to how it would affect welfare recipients and the lengths to which public servants were prepared to go to oblige ministers on a quest for savings.”

Following are some useful links that explain and/or critique the scheme, and also a link to the actual report of the Royal Commission:

• Royal Commission into the Robodebt Scheme: Read the report: https://robodebt.royalcommission.gov.au/Explainer: What is Robodebt? Six things to watch for in the Royal Commission’s final report today: https://www.theguardian.com/australia-news/2023/jul/07/six-things-to-watch-for-in-the-robodebt-royal-commission-report

  Robodebt Royal Commission’s findings revealed, individuals referred for criminal prosecution: Robodebt royal commission findings revealed, individuals referred for criminal prosecution – ABC News

  How the illegal Robodebt scheme slipped through the system: 7.30: https://www.youtube.com/watch?v=t7f7PDP5fvQ

  Another Robodebt disaster’s inevitable if we give AI too much autonomy: https://www.theage.com.au/technology/another-robo-debt-disaster-s-inevitable-if-we-give-ai-too-much-autonomy-20230712-p5dnlv.html

  Inside Robo-debt: The Whistleblower: https://7ampodcast.com.au/episodes/inside-robo-debt-the-whistleblower

  Crude, cruel and costly: Robodebt revealed – Full story podcast: https://www.theguardian.com/australia-news/audio/2023/jul/08/crude-cruel-and-costly-robodebt-revealed-full-story-podcast

  Robodebt was illegal. So who’s to blame? ABC News Daily Podcast: https://www.youtube.com/watch?app=desktop&v=Fx_10R_5Yfw

In the wake of this scandal, many of the managers and senior executives who were involved in Robodebt have lost their jobs, due to:

• irresponsible, unethical, and in all respects poor program design
• irresponsible decision-making
• a lack of checks and balances to ensure the program treated people fairly and with dignity
• a lack of human empathy for clients receiving government payments, who were regarded as “cheats” of the welfare system, leading the Commissioner to call for politicians to “lead a change in social attitudes to people receiving welfare payments”
• not being honest about the illegal nature of the scheme
• failing to ask questions at important moments throughout the implementation and ongoing management of the program

Your Role

You are a senior manager in the government service agency responsible for Robodebt. You have been spared your job, as you were distanced from the maladministration that took place. In the fall out, you have been tasked with scrapping the program and redesigning it from scratch. In particular, you wish to focus on the following recommendation from the Report of the Royal Commission:

Recommendation 10.1: Design policies and processes with emphasis on the people they are meant to serve.

You have studied Organisations at RMIT, as part of your Bachelor of Business. Having read this recommendation, you realise that the paradigms of Radical Structuralism and Radical Humanism will be especially helpful in establishing recommendations to inform the design of a new program. You also suspect that insights from the Modules on Thought Diversity, Knowledge Management and Learning Organisations, and Epistemologies of Ignorance, will be crucial in learning from the past and moving forward.

What you must do (for this assignment)

Analyse the case detailed above and conduct independent research into the case. You may use the supporting documents in the earlier links and, of course, conduct your own research.

Draw on the two conflict paradigms, and at least one additional module from Weeks 7 to 9 (inclusive), and respond to the following:

• Draw on the paradigms of radical structuralism and radical humanism and write a theoretically informed analysis of how Robodebt came into being (500 words). You may also briefly touch on the paradigm of functionalism to help explain the situation, but you should focus your effort on the absence of thinking informed by radical structuralism and radical humanism.
• Draw on at least one of the modules from Weeks 7 to 9 (inclusive) to explain why senior leaders failed to respond to concerns raised by front-line staff (500 words).
• Draw on the two conflict paradigms and at least one of the modules from Weeks 7 to 9 to draw lessons learned from the Robodebt case and develop recommendations for senior leaders going forward, to ensure that they “design policies and processes with emphasis on the people they are meant to serve” (1,000 words).

Essential citations:

• The case materials you draw on for your analysis
• Burrell and Morgan
• Hirschheim & Klein
• And at least eight additional scholarly references (making a total of ten scholarly references – note that by “scholarly references” we do not mean the case materials. Case material citations do not count toward your scholarly references).

As per our usual academic expectations, any assertions you make about the features of the paradigms or the theory you use should be supported by a scholarly reference. Therefore, your work should be infused with scholarly citations.

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