The top bureaucrat at the department responsible for the Commonwealth's unlawful Robodebt scheme has told a royal commission it was a "significant failure of public administration".

The commission before Catherine Holmes heard from Kathryn Campbell AO CSC, who was the secretary of the Department of Human Services (DHS) from 2011 to 2017.

Her department proposed the automated data-matching scheme which unlawfully raised automated debts against hundreds of thousands of welfare recipients as a means of debt recovery for the former coalition government.

Counsel assisting the commission Justin Greggery KC asked Ms Campbell whether she considered the scheme, implemented under her secretaryship, as a "massive failure of public administration."

Ms Campbell replied: "I consider it a failure of public administration."

"On a massive scale?" Mr Greggery asked.

"On a massive sca– on a significant scale," she replied.

"Can you think of a larger scale failure?" Mr Greggery asked.

'Not my responsibility'

Earlier, the commission heard that despite being involved in the drafting of an executive minute sent to then-Social Services minister Scott Morrison in 2015, Ms Campbell had a "lack of curiosity" into the legislative changes needed to validate the 2015-2016 budget proposal that became Robodebt.

"Are you saying that in your role as secretary, you participated in the drafting of a minute for the minister for Social Services without understanding the nature of the advice from DSS in respect of legislative change?" Mr Greggery asked.

"It was not my responsibility to draft or advise the minister on that legislative change," Ms Campbell replied.

"I cannot recall that I drilled into what parts of the legislation needed to be changed."

In an exchange with Commissioner Catherine Holmes, Ms Campbell said it was the role of the Department of Social Services. 

Commissioner Holmes interrupted: "Wouldn't this affect your department? The fact that the legislation under which you operated had to be changed? Wouldn't it be something you'd want to know about?"

Ms Campbell: "The split between DSS and DHS at that time was DSS was responsible for the legislation."

Commissioner Holmes said: "They'd draw it but it would affect your department, surely?"

Ms Campbell: "It would affect our department, but …"

Commissioner Holmes interrupted again: "So didn't you need to know what it would do, how it would affect your department?"

Ms Campbell replied: "We were administering many programs."

Commissioner Holmes asked: "So what were you going to do, sit back and see what changed and worry about it then, or? Would it not affect your day-to-day functioning?"

Ms Campbell: "We didn't provide advice on the actual legislative change."

Commissioner Holmes said: "OK, we've established that. It's the lack of curiosity about what that legislative change might entail in circumstances where it would unquestionably affect the operations in your department."

"In hindsight, it looks like a lack of curiosity," Ms Campbell conceded.

'It is clearly untrue'

The commission heard Ms Campbell did not seek detailed legal advice for the scheme when it was being conceived because income averaging using tax office data had been used by DHS for years.

"That had been a practice that had been in place for over 30 years," Ms Campbell said.

"In hindsight, it would have been better if … we had sought external legal advice," Ms Campbell conceded.

The commission was also told Ms Campbell signed off on an annual report in 2017 that said data matching processes had not changed and were "carried out in accordance with guidelines".

"It is clearly untrue, it's misleading, isn't it?" Mr Greggery asked.

"I now review it and see that it should have been phrased differently," Ms Campbell replied.

"It's misleading, isn't it?" Mr Greggery said again. "The way income was assessed had changed under the Online Compliance Intervention program [Robodebt]."

"I do accept that the sentence was misl– is not optimal and it could have been phrased differently," Ms Campbell said.

"This is one line of a long, annual report and I accept that the drafting could have been more accurate." 

Mr Greggery put to Ms Campbell that the drafting was the "introduction to defend the department's position in respect of the controversy which occurred in January of that year [2017] leading to the Ombudsman's investigation [into Robodebt]".

Ms Campbell said she did not accept that assessment.

Another block of public hearings is scheduled for December.

It is not clear if Coalition government ministers who oversaw the scheme will be called to give evidence.

The royal commission continues.