• Contact
• Feedback
• Sitemap

Search

Ministerial Speech

Senator the Hon Joe Ludwig
Minister for Human Services

11 June 2008

Address to Smart Cards Summit

Sydney

Thank you for having me here today.

I acknowledge the First Australians on whose land we meet, and whose cultures we celebrate as one of the oldest continuing cultures in human history.

Before I start I’d like to remark on the role that conferences, such as this one, can play in driving progress through assisting the free flow and exchange of ideas.

It is great to be here in a forum, while future-focused, is pragmatically oriented enough to have an eye on what is feasible and achievable in the not-too-distant future.

This morning I intend to cover two themes:

1. First, I am going to start by talking about the future, by giving a snapshot of where service delivery is heading under the Rudd Government, and what that means for our customers, the Australian people, and for the government. I will also touch on what that means for our partners in the community sector and in business, which includes many of you here today.
2. Second, I will then move on to my approach and attitude to technology and how we intend to procure ICT in the Human Services portfolio as well touch on what was wrong with the Access Card project, and what the lessons there are for the future.

THE HUMAN SERVICES PORTFOLIO

It might help if I quickly brief you on what was the state of play, when I was sworn in on 3 December 2007.

When Labor was last in government, in 1996, the Human Services portfolio did not exist, and nor did its two main agencies, Centrelink and Medicare Australia, in their current form.

Centrelink is older than the portfolio, being formed in 1997 out of the former Commonwealth Employment Service and parts of the former Department of Social Security. The original purpose was to create a single Commonwealth service delivery agency, something that has self-evidently proved to be more difficult in action than in conception.

The Medicare brand is well known to all Australians since the Hawke Government introduced it in 1984, but the agency of the same name is a fairly recent entity formed out of the break up in 2005 of the old Health Insurance Commission. In addition to Medicare services, Medicare Australia’s other main function is administering the Pharmaceutical Benefits Scheme or PBS.

At about the same time it became clear that Centrelink alone would not achieve the desired outcome of a single service delivery agency, so the Department of Human Services was formed as a working group of 50 officials in the Department of Finance. It was charged with trying to accelerate the pace of service delivery co-ordination and reform across government.

Separation as a department followed, and when that proved insufficient, Human Services separated from Finance to become an entirely new portfolio at Cabinet Level.

Immediately following the election, the policy of service delivery was included in the list of portfolio responsibilities.

Add to that small core of the Department of Human Services the Child Support Agency and CRS Australia (the former Commonwealth Rehabilitation Service) who, unlike Centrelink or Medicare, are under the direct control of the Departmental Secretary.

In the end it’s that small core in the Department, only some 145 in number, who are the vanguard for reform and co-ordination. When you take into account the rest of the portfolio, including the two small agencies, Australian Hearing and the HSA Group, for the small group in the core Department, it really is akin to a mouse holding a bull by the horns.

To give you an idea of just how big that bull is, here are a few facts:

• The portfolio administers welfare payments through Centrelink to six and a half million customers.
  
• Through Medicare Australia, it processes claims under the Medicare and Pharmaceutical Benefits Schedules for all 21 million Australians.
  
• It facilitates child support regular payments between 1 ½ million separated parents.
• The shopfronts across the various agencies receive more than 74 million visits per year.
• We send out almost 100 million letters each year.
• The call centres take more than 44 million calls per year. In child support, more than 3 ½ million outbound calls alone are made.
• In total almost $100 billion worth of transactions are processed across the portfolio.
• And this work is all done by over forty thousand staff, which make up about one quarter of the Australian Public Service.

The sheer number of customers and value of transactions we handle is enormous.
What sets this portfolio apart from every other is the extent to which we interact with members of the public. And it is the quality, frequency and breadth of those interactions which determines whether or not the intended outcomes of public policies are actually achieved.
Three examples keenly illustrate this point:

1. If we properly assess the capacity of someone on a disability support pension to work, we will be better able to match people to jobs that improve their welfare in the longer term.
2. If we can make it easier for people to keep their details current and eligibility up-to-date, we can limit the accumulation of debts that then have to be paid back.
3. If people can access services through diverse channels then we can help prevent people from falling through the gaps simply because they can’t get to a Centrelink office or access the internet.

The Prime Minister assigned me the task of improving these interactions and the delivery of human services to Australians, when he announced the Ministry, highlighting both their quantum and value.

So it is my central objective is to achieve that task - to ensure better access, greater efficiency and ultimately superior outcomes.

BENEFITS FOR CUSTOMERS

It is important that I highlight this shift in focus. Better customer service from Government agencies may sound like a bit of a motherhood statement but, if you look at the history of this portfolio as I have outlined, that has not necessarily been the focus.

The reason for bringing this all together under the previous government was largely an attempt to find savings and efficiencies. But cheaper service does not always mean better service.

From the customer’s perspective, I want government services to be simple and convenient.

Simple so that people can easily identify services that are available when they themselves require assistance or when they are trying to help out a friend or family member.

And convenient so that people can manage the demands and pressures of their busy lives.

A government priority has always been to remove the regulatory burden on businesses, but individuals and families are increasingly caught up in red-tape as well. It’s my intention to reduce this unnecessary complexity and to help people get some time back to themselves.

I also want a system where there is no wrong door when it comes to accessing government services. With modern technology and the right training, government should be striving to deal with a person’s problem at the first point of inquiry. At the very least, there need’s be an end to the absurd situation where people are asked to provide government with the same information time and time again.

BENEFITS FOR GOVERNMENT

From the Government’s perspective I want to reform service delivery so that we can better achieve the policy objectives of the government, and achieve them in a more efficient and flexible manner.

On a narrow level it will lead to better value for taxpayers, ensuring that we don’t spend more than we need to get the job done.

For instance, it will mean that our IT systems and office networks are agile enough to implement new policies in a speedy and effective manner.

Cumbersome IT systems add to the time and cost of implementing new programs, particularly with the required IT skills often in short supply. Testing or reviewing can require the same set of skills, so costs are driven up further.

This is where Sir Peter Gershon’s work on ICT procurement, for Finance Minister Lindsay Tanner, will be critical as we look to better manage the effectiveness of every dollar of Commonwealth Government spending.

Across the Commonwealth roughly $6billion is spent on ICT each year and the Human Services portfolio alone accounts for $640million of that.

Another objective I have in service delivery is to improve the communication and feedback to policy ministers and their departments.

In delivering their programs, records have to be kept for each of the millions of interactions with members of the public.

We have strong measures in place to restrict access to those records so as to protect privacy. In cases where those records are retained electronically there is an opportunity to utilise de-identified extracts to a far greater extent than we do at the moment to assist in finding areas of need.

As many of you here would appreciate, better data can help drive smarter decisions which, in turn, drives better outcomes for Australians.

Down the track it is even feasible that we could establish live feeds of de-identified data that would enable policy departments to monitor the up-to-the-minute implementation of their programs, improving the responsiveness of government.

BENEFITS FOR PARTNERS

More and more, successful outcomes like the ones I just described depend upon effective collaboration with community organisations and business. Without it, those outcomes would be impossible.

For instance, the many non-government organisations that are doing great work in areas where Centrelink often has a presence.

Therefore, the question is how can we make sure that we get the most out of our collective efforts without tripping over each others feet?

The best way to achieve that is to work on joining up services between government agencies and NGOs.

Are there ways these organisations might be able to take advantage of our significant physical infrastructure around the country? Could future investments in IT be used to develop new tools that assist community organisations as well as government?

But collaboration on the front-line is only part of the story. It is the work behind the scenes in which many of our partners in the business community play a big role.

Without the reliable supply of systems, technical support or assistance from our many business partners, front-line staff wouldn’t be able to deliver the service they do.

And without the innovative solutions and productivity enhancements that come from you, there’d be few advances in the channels we can deliver services through.

That is why I strongly value the relationship this portfolio has with business, and want to continually improve the manner in which we engage.

ICT PROCUREMENT – HUMAN SERVICES

It is a relationship I want to continue to refine and improve, particularly as we work through the implications of the broader ICT procurement review for the Human Services portfolio.

Because of the size and scope of our ICT spend, many of the contracts span multiple years and can be worth tens if not hundreds of millions of dollars.

And because ICT infrastructure forms the base from which much of our work is done, some contracts have the potential to steer the direction of service delivery long after they expire.

This was where I saw one of the major risks in how the Access Card project was structured.

Tangling everything up in one big complex project or contract, risked further delays, cost blow-outs and restricted the government’s ability to steer the project over the medium to longer term.

By contrast we’re keen to take a step-by-step or modular approach wherever possible. One where each step in the process will be expected to stack up on its own – and any unmeasurable synergies welcomed as a bonus rather than used to justify a major upfront investment.

Such a modular approach will also allow smaller players in the market to provide niche services in one or more areas.

From the government’s perspective it means we can minimise risk as well as keep our options open in terms of suppliers.

From the perspective of suppliers it means you get more opportunities to bid for the work you're best at.

SMART CARDS & TECHNOLOGY

I want to turn now to the use of technology in improving service delivery, and smart cards in particular.

As you are all aware, Labor was opposed to the previous government’s Access Card. But this Government has no in-principle objection to smart cards, our objections lay with the particular smartcard approved by the Liberal Party. It was an identity card by stealth.

Just as important, I think the right approach to service delivery should not centre around any one particular technology.

This is a government with a reform agenda. If you have a look at the direction of where welfare policy in this country is now headed under Labor, the approach is more hand up than hand out.

Jenny Macklin, Julia Gillard and Brendan O’Connor are leading the charge in using the welfare system to drive government objectives that are vital for breaking the poverty cycle – in a wealthy country like Australia every child should have the opportunity to attend school healthy, fed and ready to learn. We want to see those fit and ready to work who can get a job, move off welfare. For us this is a matter of social inclusion and social justice.

We are prepared to look at all practical measures, such as income management, and not bound by ideology.

There has to be a change of thinking all round – are smart cards always the solution?

Given the ease of rollout and capacity to leverage the existing EFTPOS network, government may well continue to elect to use the cheaper traditional magnetic swipe card in the short term.

This was the case in the announcement in the recent budget of development of an income management card. Put simply, government could not afford to wait to solve the difficulties for small business in the Northern Territory under the existing scheme of manual processing and stored value cards. We needed a solution this year and a smartcard was not going to be an option.

The Income Management Card will use the EFTPOS system to efficiently deliver income-managed welfare payments to about 20,000 Centrelink customers in Northern Territory income-managed communities and the trial of income management for people referred by child welfare authorities in selected areas of Western Australia.

Individual customers on income management will be offered a PIN-protected card which allows them to use their income-managed funds to purchase priority needs, such as food, household goods and clothing at approved merchants using EFTPOS.

This system will make it easier for people to have access to their income-managed funds. It will also be less of a burden for businesses, including providing small businesses, in particular, the opportunity to participate in income management via a simple approval process.

When it comes to technology, we know that redundancy always goes hand in hand with innovation. This means that governments must make careful decisions about which technological solutions to adopt and when. Those are decisions that should never be rushed.

Those decisions should be backed by a thorough and verified business case, especially if government is intending to invest, develop and roll-out a technology to the entire population, as was the case with the Access Card. But even if the Access Card business case had been signed off on by the Department of Finance, I don’t think that it made good sense for government to be involved in such a roll-out.

Since the implementation of the anti-money-laundering and counter-terrorist financing reforms, banks and other financial institutions are doing more than ever to establish rigorous customer enrolment through the Know Your Customer obligations.

At the same time, through better identity fraud protection measures and the pilot Document Verification Service, Government (both federal and state) is doing more than ever to tidy up their issuance of documents used in whole or in part to establish proof of identity.

There is significant potential for these initiatives to support each other. In the welfare area of my portfolio, customers are already required to have a bank account in order to receive payments.

If a card, smart or otherwise, is the best way to bring all this together, government need not play the central role. It may be enough to build payment transfer standards into the existing National Smartcard Framework and leave the private sector to roll-out and implement.

I think there will still be a place for government issued smart cards, but at present these are on a small scale rather than a population wide rollout. In the near future, my portfolio will also be implementing a smartcard for staff authentication. Centrelink will be providing all 27,000 staff with smartcards for staff authentication. The cards will provide three main business functions:

• a staff photo identification card;
• a staff computer system card (including two factor authentication); and
  
• a staff building entry card

This will make Centrelink one of the first Australian Government agencies to adopt the Identity Management for Australian Government Employee Framework, otherwise known as IMAGE. My portfolio has worked closely with Australian Government Information Management Office to develop the IMAGE framework and will begin deploying the cards to staff over a 6 month period commencing in late 2008.

CONCLUSION

The PM commented on the need for service delivery reform when he announced the Ministry late last year.
This has been backed up in the Budget with $10 million to further explore options and prepare business cases for building a 21st century service delivery system, and I have set in motion a detailed work program to develop:

• a faster, more accurate and higher quality service at the front line;
• a broad footprint able to provide better on-the-ground assistance to regional and Indigenous Australia and in times of emergency;
• a greater choice in service delivery channels including more convenient and better use of online channels, or face-to-face and telephone services where this is the preferred option;
• the convenience of being able to access multiple government services in one location through a one-stop-shop approach; and
• reduced red tape so that people don’t have to provide the same information on multiple occasions.

But reform in this area is not like floating the dollar, where once done it is more a matter of learning how to adapt to the new environment.

Service delivery reform must ultimately become part of how we conduct business-as-usual within the portfolio, so that as people lives evolve and change the way they interact with government evolves as well.

Downloads

• Download Speech in PDF format (57k)

Media Contact

Joe Scavo — 0413 800 757.