Some of the most powerful people in Canberra are braced for the release on Friday of a royal commission report into a “shameful” fiasco, the Robodebt scandal.

Notices have been sent this week to parties against whom adverse findings have been made, by Commissioner Catherine Holmes.

Adverse findings could lead to consequences ranging from reputational costs to referral to the new National Anti-Corruption Commission (NACC) to – as was suggested during public hearings – referral to a prosecutor.

The most serious referrals are not expected to be made public on Friday. But those to have appeared before the commission include some of the most powerful figures in the previous government: Former ministers in charge of Robodebt including Scott Morrison and Stuart Robert.

How a scheme that was meant to save money on welfare fraud ended up costing taxpayers an untold sum expected to reach into the billions is just one of the many questions likely to be settled by a final report.

A greater question is: How did an illegal scheme that was inaccurate from its outset continue for nearly five years?

Robodebt was hailed as a means of automatically recovering billions of dollars wrongly paid to people on welfare, who were portrayed as cheats in media coverage.

That expectation was built on wildly inaccurate maths.

Catastrophic consequences

A review of more than 780,000 cases of people found to have had debts raised through the scheme identified 435,000 where the debts were either too high or non-existent.

More than $1.7 billion was returned to people who had debts wrongly raised after a settlement.

The total cost will likely be much higher.

However, until it was declared illegal by the Federal Court in 2019, people on welfare payments bore Robodebt’s often catastrophic consequences after having money deducted wrongly.

The mother of Rhys Cauzzo, a 27-year-old man who killed himself in 2017 after being approached to pay back a vastly inflated sum, told the commission his personal effects included a self-portrait that foretold his suicide and which featured dollar signs hanging over his head.

What role Robodebt had in Mr Cauzzo’s death is one of a multitude of questions expected to be settled when Commissioner Holmes’ report is presented in Parliament on Friday morning.

Another is: How was a government-run debt collection scheme that targeted the most vulnerable Australians allowed to run for so long?

Ex-minister Stuart Robert explained why he publicly defended Robodebt when he personally opposed it.

Questions to answer

That question partly hangs on evidence from former human services minister Stuart Robert and two of Canberra’s most senior public servants who told the commission they briefed him when he took on responsibility for the scheme.

He denies that, and says he only found out shortly before a court ruled Robodebt illegal.

Government Services Minister Bill Shorten was one of the first to suggest that Robodebt was allowed to continue because of who it was targeting.

He described it as a mixture of incompetence and cruelty in 2017 and later called for it to be suspended.

Mr Shorten led a campaign for the royal commission and called in 2020 for a national integrity commission to look into the scheme.

“(It) has eroded trust in government, and in fact I’d go so far as to say, it is threatening democracy,” he said.

‘Completely illegal’

Terry Carney, a University of Sydney law professor and long-time member of an appeals tribunal who first found Robodebt illegal in 2017, says it shook his faith in government.

“I ruled on (five cases and on) all five occasions that Robodebt was completely illegal; that there was no debt that could be raised on Robodebt’s methodology,” he told TND on Thursday.

Curiously, the royal commission heard Emeritus Professor Carney’s position on the tribunal that allows people to appeal against decisions by government departments was revoked soon after.

That came days before an already-written press release about his reappointment (what would have been his 11th after 40 years of service) was scheduled to be sent to media outlets and after a meeting of the former cabinet.

“There were about another 205 (later) decisions like mine made by other members of the tribunal,” he said.

“At the time, I was still expecting they would do the right thing.”

But the government stymied the first attempt to challenge Robodebt in the Federal Court before it lost a second case that found Robodebt was a “massive failure” and a “shameful chapter” in public administration.

“When it comes to the enormous power of government and the [negligible] power of citizens you’re not allowed to do those sorts of things,” Emeritus Professor Carney said.