Speech: Speech to the GovInnovate summit - Innovation in government service delivery

14 November 2016

The Hon Alan Tudge MP

Minister for Human Services

One of the hallmarks of the Turnbull government has been its commitment to innovation.

This should come as no surprise when we consider that Malcom Turnbull was one of the early pioneers of digital innovation in this nation, anticipating some of the extraordinary technological social change that the internet would bring.

His ambition and drive is now permeating throughout the government. His experience is shaping our policies and priorities.

Innovation is what is going to allow the Australian economy to continue to grow strongly. In many cases, this will be innovation driven by technological advancements, although innovation can also occur in the absence of technology – through process redesign, product improvement or efficiency gains.

Our innovation agenda (which Mr Turnbull launched when he first became Prime Minster) is designed to encourage and stimulate innovation across the economy – through existing businesses and through start-ups.

However, innovation must equally occur in the way governments function and deliver services to Australians, and this will be the focus of my remarks this morning, focusing on digital innovation.

Australia has generally been a leader in innovation, either through its own creations or through rapidly adopting advancements from elsewhere.  The wealth of our nation and the competitiveness of our companies is proof of this.

But it’s fair to say that when it comes to innovation in Government service delivery, we still have a long way to go, although impressive gains have been made.

We have a big challenge on our hands: Customer expectations about the quality of the delivery of our services are increasing every day.

With each new advancement in the private sector, a new benchmark is set and the perceived standard of government services falls behind again.  When a citizen can manage all of their personal finances with their bank from their phone, the expectation is that they should be able to do the same with government.

When they can seamlessly order an Uber in a couple of clicks and monitor its exact arrival, they wonder why they cannot seamlessly apply for a basic benefit with the same ease and understand where their application is at in the process without phoning a call centre.

The expectations are only going to increase as the next new advancement comes and new benchmark set.

The goal of the Government must be to not only keep pace with changing technology and expectations in service delivery, but in fact to be an exemplar of digital progress and innovation.

This is an enormous challenge, particularly in the face of just how rapidly technology is advancing.  But it also presents an opportunity to provide better service for citizens, lower cost to government and more tailored policy.

In response to this challenge, and in my remarks today, I say that, firstly, we are already delivering rapid progress and making the right major investments. Secondly, we are building the capability we need and are progressively setting the right internal standards for the government as a whole to ensure future progress.  Finally, we must also ensure our policy settings are right.

We have come a long way already

To start with though, while it’s true that government service delivery has a long way to go in Australia, we have already made impressive improvements in the last few years.

Let me outline at least a few of these, before describing how we are thinking about the future and putting the structures in place to capture further opportunities.

MyGov:   I will start with MyGov.  As you no doubt aware, this is the main avenue that people use to access a range of government services, from Centrelink, Medicare, the ATO, Child Support and Aged Care.

The take up rate of myGov has been a great success, on average doubling every year since 2013. Today, more than 10 million accounts and digital mailboxes have been created, enabling Australians to use a single set of login details to access a range of Government services online at the time and place of their choosing.  

It is now one of the biggest digital services in Australia and has surpassed the number of digital service users of major businesses such as the Commonwealth Bank.

More than 130 million items of mail have now been sent digitally instead of by post, and this has saved taxpayers more than $100 million in postage costs alone. More broadly, myGov has delivered $93 million in red tape reduction savings to those who use the service.The take up rate of this digital service has been the envy of other nations. Most of our peers have only seen a fraction of the take up that we have had.

For instance, the UK are seen as the world leaders in digital government yet their equivalent service has just 911,000 accounts, two and a half years after it was launched.

There is still so much to do. But we are delivering. Which is why we are investing over $50 million dollars to improve and sustain the service that myGov offers.

This will see enhanced security features, improvements to the “Tell Us Once” feature that people use to seamlessly update their details across Government, improvements to the digital mail service, and significant improvements to the user experience of myGov.

It will lay the groundwork for a series of best-in-class capabilities that can be reused across Government and trusted institutions alike.

Medicare:  97 per cent of all Medicare transactions now require no further action from the citizen once they have swiped their Medicare card at their doctor’s clinic.  For those doctors who still won’t install a Medicare Card machine, patients have the option of uploading their information on the Medicare App and this information will be transmitted to our service centres for processing.

Tax: People have been able to deal with the ATO online for several years now, with information prefilled to enable tax returns to be entered more simply and quickly.

Sometimes small changes can make a difference.

For instance, in the tax time just gone, we brought forward the automatic balancing of family tax benefit payments to the start of July so families that had already lodged a tax return, or those who were on income support for the whole year, received their balance payments sooner.

In addition, we analysed trends in the number and type of enquiries we received, and made improvements to our payment system, digital service options and social media messaging to help families get information quickly.

These simple changes delivered huge benefits for families at this busy time of year.

The number of families who spent time on the phone or visited a service centre to tell us they did not need to lodge a tax return halved.

Call wait times for families in July were 70 per cent shorter compared to last year.

Thousands of families had over 10,000 tax time questions answered on social media in a 3 week period, with more than 1,000 questions coming in on the busiest day (4 July 2016).

All in all, over 500,000 families’ payments were balanced in the first two weeks of July, double the amount from the same period last year.

Welfare payments:  We are also making one of the biggest changes in a generation to improve how Australian households interact with Centrelink.

Over the next five years, we will be progressively building a new system for each major payment to make it simpler, faster and cheaper to administer.

We are going from a world today where the system is stifled with unnecessary inefficiency and complexity to a world where there will be progressive transformative change. This is called the Welfare Payment Infrastructure Transformation, or the “WPIT” programme.

For instance, consider the ‘modern day experience’ of a student applying for Youth Allowance before WPIT came along.

The vast majority of students started the process of applying by completing their application online. A small minority chose to apply using a paper form instead.

Most of these students then had to wait over five weeks for their claim to finish processing.

And from the students perspective, during this time the claim went into what seemed like a black hole.

Instead of being able to check online where it is up to, each student had to ring the call centre to talk to an operator and find out.  Each call costs the government several dollars.  Hundreds of thousands are made each year.

Then at the end of the process, once their five week waiting period is over, four out of every 10 students were be informed their application was rejected.

And for two of these four people the rejection will be for the most simplest of reasons.

They will have been rejected because their parental income field in their application was left blank, way back when they submitted the application, or because their parental income exceeded the value allowed for eligibility.

So the lesson we learn about the effectiveness of our system was that 20 per cent of all Youth Allowance applications waited unnecessarily for around five weeks after lodging their application, only to find out their claim was unsuccessful.

And all the while the processing costs for this inefficiency keep mounting. Each rejected application costs $28 to process and there are around 98,000 rejections each and every year.

That is a lot of money that could be reinvested elsewhere more effectively.

Now in the future, the experience for a student applying for Youth Allowance looks much brighter and the savings to the taxpayer will be enormous.

And this is all thanks to the investment we are making now through WPIT.

Students will continue be able to apply online to receive their payment. And the paper based form will remain available for those that need it.

In the future, there will be straight through processing.  Many people will know automatically whether their payment has been approved, because the Centrelink system will interact with both the ATO database (which contains the income data) and the university course enrolment databases.

Moreover, if they earn a bit of money or their course load changes, their payments will be adjusted automatically.

This transformation to the welfare payment system will take several years to implement, but it is a huge transformation that will radically change the way that citizens interact.

Finally, it will also mean that Government will be more agile and adaptive in meeting the needs of Australians. No longer will it take months of time and millions of dollars to implement or adjust payments at times of emergency or critical need.

I’m sure that John Murphy, from my Department, will be telling you more about this exciting new project in much more detail tomorrow.

Driving future change

These few illustrations show that there is enormous activity that has occurred, but there is still so much more to do.  How do we ensure that we can maintain momentum for innovation and change?

Let me mention two things:  building capability and setting high standards; and getting the policy right

  1. Building capability and setting high standards

    A significant part of ensuring that there is constant innovation in government service delivery is getting our internal settings right, which includes the capability of our people, and the standards we set for ourselves

    There is not a boardroom in Australia today that is not talking about digital technologies and how it is transforming their industry, or at least has the potential to do so.  Many of the larger companies have had entire board visits to Silicon Valley to appreciate the size and pace of the change that is likely to occur.

    For businesses, adapting and changing as a result of technological advancement is frequently not a choice.  Unless they adapt, they will not survive.  Many are already in the latter category.

    Governments typically don’t have this same relentless competitive imperative to change. Moreover, the way we account for expenditure and benefits, can result in underinvestment in technology:  a business case won’t always stack up if you can only measure the direct operational savings from a technological investment and not the broader economy-wide ones.

    The Government has done the hard thinking on these issues and put in place structures to ensure that there is a constant drive for improvement across all departments and ensure that projects get delivered.

    One of the most important elements of this change is the Digital Transformation Agency. Initially set up by Malcolm Turnbull in the Communications Department when he was Minister there, it is now part of Prime Minister and Cabinet and has a newly expanded remit.

    As of October this year, the DTA’s mandate is to:

    • Provide strategic and policy leadership across the Government on ICT and digital service delivery, including ICT procurement policy
    • Set standards for government ICT and digital service delivery projects
    • Coordinate funding of ICT projects
    • Lead a ICT program management office for the Government
    • Provide expertise and advice across Government on ICT and digital topics

    In short, the DTA’s role is to provide expertise and sound advice, and to set high standards for the Government to adhere to as we deliver on the Prime Minister’s vision for innovation and excellence in technology within Government. It will be crucial to our success in delivering on that vision.

    As another example, for key ICT projects we are bringing in senior external expertise from the private sector to help oversee the change and provide advice. An excellent example from within my own portfolio is the Expert Advisory Group that advise on the WPIT programme. The Expert Advisory Group comprises experts who have done this sort of major payment transformation before, whether in the financial services sector, or in other countries overseas, or analogous major transformations in very large organisations. Input such as theirs will also be critical to the success of these major programmes of change.

  2. Getting the policy right is just as important as the technology

    The second thing that will help drive change faster and more efficiently is being clearer on policy.  There are at least three areas in which we must drive reform:

    1. We must prioritise highest touch services to those with the greatest need
    2. We must design services that place the citizen in control, maximising their independence so that they can access services when and where they want them
    3. And we must simplify the services we provide through Government, both at the policy and delivery level

    For a western, liberal democracy, our natural inclination is for Government services to be designed in such a way that they are easily accessible and available to almost all of the population. We often start from the egalitarian position that everyone should receive the same level of service and support. While this approach is sound in principle, in the context of service delivery it leads to an outcome where many citizens are overserved, and consequently everybody waits for longer than is necessary, and there is less flexibility to provide extra time and support to those with the very highest needs. In a modern society we need to learn the lessons of some of the leading private sector organisations and take a more nuanced approach.

    We should design an appropriately tailored digital-by-default approach, so that for the majority of Australians who are perfectly capable of self-service, they can complete virtually every single transaction online, by themselves, at a time and place when it suits them.

    For example, for capable, technology-savvy, students, in the future there should be virtually no need for them to call Centrelink or visit a Service Centre. The service online will be good enough that these students should be both able and expected to self-serve almost all their transactions online. This will be a huge improvement for the students’ experience, and will also free up capacity for my department to spend more time with people with higher needs.

    For those people who need additional support to navigate the system there should be an appropriate mix of telephone and face-to-face services as well as supports to help them enjoy a greater use of online channels over time. Critically, these higher cost services should be, in the future, available primarily just to those who require them.

    And lastly to some extent the service delivery system is a reflection of our policy in action. The McClure Review highlighted the astonishing complexity in the welfare payment system. We presently have around 20 payment types and 49 supplements that need to be individually administered. Simplification of this structure will play an important part in helping to deliver a sustainable and improved government service.

    Simplification is key, as it makes it much easier to tap into advancements being made through digital accessibility.

Technology enabled policy

I have largely been discussing better service delivery enabled by technology, but let me finish my discussing how technology can also allow us to get better policy outcomes. This is as exciting as delivering better service within existing policy frameworks.

In some respects, the technology available at a particular point is time will always be one of the limits on what public policy can achieve.

My main responsibility is the welfare system, which constitutes about a third of the budget. At the moment, we place welfare payments directly into people’s bank savings account each fortnight. We do so, because it is the most expedient way of delivering the welfare.

For most people, this works perfectly well.  But in some locations, the welfare dollar ends up being spent on huge volumes of alcohol, drugs or gambling.  This then has an impact not just on the individual, but also the broader community – children being neglected and women being harmed by alcohol fuelled violence.

We are trialling at the moment a cashless welfare card in a couple of geographic locations.  This card is a basic Visa Debit Card that works like any other Visa Debit card but doesn’t work at any liquor store or gambling house and cash cannot be taken out with it.

It is one of the most innovative, technologically advanced cards on the market, which links to your mobile phone and sends text messages after each expenditure informing you of your purchase and your account balance.

The challenge for us at the moment is that the technology will only allow us to block at the merchant level. This means that when there are merchants that sell both liquor and groceries, for example, we either have to block that store all together from the operability of the card, or have a special compliance agreement with that store.

In the near future, this problem will be solved from advances in payment technology.  Within a matter of a few years, nearly every store will have integrated systems allowing a payment card to identify an individual item and block that item.

This will then open up opportunities for governments, if they choose, to provide more targeted welfare to vulnerable groups, ensuring that the welfare dollar is spent on the things for which it was intended.

Conclusion

Making the very most of new technology therefore means not just asking how and where we can deploy new ways of delivering existing services.

Rather, we need to be asking what policy settings need to change to get the most out of new technology, for instance moving away from providing the same type of service to every individual that engages with Centrelink.

And we absolutely must be asking what policy settings can change for the better as a result of the new technology being made available, such as the possibility of better targeting welfare payments, away from drugs and alcohol.

This is the opportunity I am most excited about. Not using new technology to do today’s activities better, but using new technology to bring about a vast new array of possibilities, which are immeasurably better for all Australians.