The Billion-Dollar Payroll Disaster: lessons from Queensland Health’s Payroll System Artwork

The Westminster Tradition

Unpacking lessons for the public service, starting with the Robodebt Royal Commission.
In 2019, after three years, Robodebt was found to be unlawful. The Royal Commission process found it was also immoral and wildly inaccurate.

Ultimately the Australian Government was forced to pay $1.8bn back to more than 470,000 Australians.

In this podcast we dive deep into public policy failures like Robodebt and the British Post Office scandal - how they start, why they're hard to stop, and the public service lessons we shouldn't forget.

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The Westminster Tradition

The Billion-Dollar Payroll Disaster: lessons from Queensland Health’s Payroll System

August 19, 2025 • Season 3 • Episode 16

In this episode, Danielle, Caroline and Alison look at ANOTHER big ICT transformation project, with enormous human impacts and a long and expensive clean up.

The Queensland Health payroll system failure ranks as one of Australia's worst public administration disasters, costing taxpayers $1.2 billion and leaving 78,000 healthcare workers without proper pay.

What began as a $98 million routine upgrade became a case study in governance failure, mismanaged procurement, and the dangers of outsourcing critical government functions without maintaining proper oversight. IBM was actually barred from taking Queensland government work for its involvement in the scandal.

In this episode we revisit some lessons with a sharper eye on lessons including:

It’s easy to get out of touch with what matters to your workforce - and payroll is *the* most important back end function
The critical question of identifying how much inaccuracy you are willing to live with before accepting a system
Contract management is critical - and never sign a release from liability just to get the contractor to keep working
Generalists can’t stand back from ICT projects

Referenced in this episode

Richard Chesterman QC Queensland Health Payroll System Commission of Inquiry (2013)
The Radical How’s recommendation to shift procurement so that we buy or rent services that support teams, not simply to whom outcomes are outsourced“

This podcast was recorded on Kaurna land, and we recognise Kaurna elders past and present. Always was, always will be.

Now for some appropriately bureaucratic disclaimers....

While we have tried to be as thorough in our research as busy full time jobs and lives allow, we definitely don’t guarantee that we’ve got all the details right.

Please feel free to email us corrections, episode suggestions, or anything else, at thewestminstertraditionpod@gmail.com.

Thanks to PanPot audio for our intro and outro music.

'Til next time!