Dated May 29 2026, this was the first mention of the Social Security (Modernisation) Amendment Bill which PoO can find on the Government’s official website.
Perhaps that’s because of the unseemly haste with which the Bill had passed its three readings without any opportunity for public submissions or select committee scrutiny.
The Bill was introduced to the House of Representatives on May 28, when media attention was focused on the Budget. It was debated under urgency and passed its third reading the following day.
Perhaps that’s because of the unseemly haste with which the Bill had passed its three readings without any opportunity for public submissions or select committee scrutiny.
The Bill was introduced to the House of Representatives on May 28, when media attention was focused on the Budget. It was debated under urgency and passed its third reading the following day.
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Upston was too busy – or too slow to get there in time, maybe – to be in the House for the first two readings. But in her press statement, she explained that the Social Security (Modernisation) Amendment Bill enables a broader use of automated decision-making to improve efficiencies.
It implements a change announced as part of Budget 2025. It does not impact eligibility settings for welfare assistance.
“Every year, the Ministry of Social Development (MSD) makes millions of decisions – many of them straightforward, but the legislation has not kept up with how services are delivered today.
“While MSD currently uses automated processes where they can, there is still unnecessary manual processing, duplication, and delays for clients.
“The Bill introduces a set of practical, targeted changes to modernise how the system operates, improving the accuracy of the information MSD holds about people to make sure they get what they are entitled to, while ensuring the system remains fair and financially sustainable.”
And:
“This is about delegating straight-forward decision-making to an automated process, to free up time for case managers to engage better with clients so they can access assistance and move from welfare to work.”
PoO was alerted to this legislation – yet another example of the Luxon Government’s contempt for consultation and public participation in law-making – by a Newsroom article headed:
$55m less in benefit payments as Govt automates welfare decisions under urgency
The article says the text of the bill goes further than the specific decisions compassed in briefings to ministers, empowering “MSD to approve the use of an automated electronic system by a specified person to make any decision, exercise any power, comply with any obligation, or take any other related action under any specified provision, with appropriate safeguards”.
It comes as new figures in the Budget reveal the Government expects to pay out $55 million less in benefits over the next four years as a result of the automation drive.
University of Auckland honorary research associate Dr Andrew Chen, an expert in AI and technology policy, told Newsroom the legislation would significantly broaden MSD’s abilities to rely on computers over humans.
“It’s a bit alarming that it’s being passed through under all stages urgency without any opportunity for the public and civil society to think more clearly about what this might mean for MSD and its customers,” he said.
He pointed to public submissions on legislation passed last year, which also widened the scope for automated decision-making at MSD, as examples of what experts would likely say had they had an opportunity to weigh in on this move.
Those submissions broadly opposed the changes, raising concerns about the accuracy and reliability of automated systems.
PoO has not had time to examine the legislation and the rationale for it.
At first blush, modernisation and efficiency should be welcomed
What could go wrong?
Across the Tasman, we are reminded of the Robodebt Scheme, launched in 2015 by the Department of Human Services. This was an automated welfare debt recovery system designed to flag overpayments.
But the software relied on a deeply flawed “income averaging” algorithm that compared annual tax data against fortnightly welfare reports.
It completely lacked human oversight, resulting in the automated generation of hundreds of thousands of completely fictional debts.
In 2020, the federal court declared the scheme illegal, and a subsequent Royal Commission condemned it as “illegal and immoral”.
The government was obliged to pay out over A$2.4 billion in cumulative class-action settlements, debt wiping, and victim compensation, making it Australia’s most socially catastrophic and expensive policy-by-algorithm failure.
Another experience which might be instructive for Upston and her officials is the Post Office Horizon Scandal in Britain.
In 1999, the UK Post Office rolled out “Horizon,” a nationwide financial accounting system developed by the Japanese firm Fujitsu. The software was riddled with critical bugs and defects that falsely manufactured financial shortfalls at local branch accounts.
Instead of investigating the software, Post Office executives covered up the glitches and blamed sub-postmasters.
Between 2000 and 2014, more than 700 sub-postmasters were wrongfully convicted of theft and fraud. Many were jailed or bankrupted, and some committed suicide.
Public compensation and inquiry costs have soared past £1 billion, making it the most devastating miscarriage of justice in British history.
But hey – stuff like that couldn’t possibly here.
Although..
Remember INCIS (the Integrated National Crime Information System)? It was commissioned in 1994 to replace the ageing Wanganui Computer Centre mainframe with a modern, connected desktop database.
The project was abandoned in 1999. It cost taxpayers over $100 million for a system that ultimately delivered little more than a basic office email system.
Funding had been scraped by cutting frontline police staff, leaving the police force critically under-resourced for years.
Then there was Novopay In 2005, the Ministry of Education dropped its reliable, local payroll provider (Datacom) for an Australian firm called Talent2 to build a unified web-based system for school staff.
Launched in 2012, the system was riddled with severe software bugs. It failed to pay thousands of teachers, vastly overpaid others, and leaked private financial data. School principals had to spend weekends doing manual spreadsheets to ensure their staff could pay rent.
The project blew out by $45 million over budget.
The government stepped in with a $22 million settlement and eventually took over the service under a Crown-owned entity to rebuild the system from scratch.
But nothing like that will happen to a project for which Upston is responsible – will it?
Bob Edlin is a veteran journalist and editor for the Point of Order blog HERE. - where this article was sourced.
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