I feel like this latest Centrelink debacle is symptomatic of a few things.
The first and most significant is a callous government desperately trying to claw back the budget in any way it can and the aggressive pursuit of disempowered people is a favourite of conservative governments the world over. Everything I've read so far has indicated that this system has been in place for a while but required significant human intervention. So an order has come in from somewhere in the department to forgo the human intervention in a revenue raising attempt. 'Just shake the tree and see what falls out' sort of approach. This is the fundamental problem here and the minister should resign.
I defer to Paul Shetler in the article linked to above that there are fundamental bureaucratic issues as well. Queue Yes, Minister quote.
Regarding the IT issues themselves, it's interesting that the data matching software was built 'in-house'. I wonder what that means. In my experience, in-housing major IT projects can be very beneficial. It's much easier to respond to issues like this. The people that wrote the programs can advise on it's capabilities and make tweaks to pull out more data or whatever it is so that disaster's like this don't happen. There seems to be some criticism that an in-house product is being used rather than an off the shelf piece of software.
It sounds like a problem that requires a bespoke solution. I can almost guarantee that there is a programmer in a back room at Centrelink screaming out: 'that's not what the program was built to do!'
Finally, I wonder what programming languages and technology stacks they're using. What are the chances is an open source language on a non-proprietary database? What are the chances that the person or people that wrote the program are still working at Centrelink? The Australian Government seems to love proprietary solutions when open source solutions are (to my mind) almost invariably superior.