Speech: Innovation in Human Services - Speech to the 2nd Annual Digital Government Transformation Conference

27 November 2017

The Hon Alan Tudge MP

Minister for Human Services
Check against delivery

Introduction

Acknowledgments.

Thank you for having me here today at this 2nd Annual Digital Government Transformation Conference.

As the Minister for Human Services, I am responsible for the largest civilian federal department with 33,000 staff, and incorporating Medicare payments, Centrelink and Child Support payments, which were merged together in 2011 into the one department. Through this the Department of Human Services touches the lives of almost every Australian. 

And overall, it does its job very well. 

Today, it will deliver income support payments to about 500,000 people. Tomorrow, another 500,000.  Money will be transferred into people's accounts accurately and on time, and will provide the essential income for 5.1 million people, including pensioners, those with disability, and those out of work.

Today, it will process over a million Medicare claims. Again, money will be transferred to health clinics or to patients relatively seamlessly. Almost 98% will be done digitally and about 90% of benefits for claimed patient services paid within 48 hours.

Today, it will facilitate payments between 1.3 million parents who have a Child Support agreement in place.

Over the course of the year, it will manage $174 billion in payments; deal with 59 million digital and online transactions; answer 52 million phone calls; and see 19 million people in Service Centre offices. 

The Department also provides ICT services to 10 other Government departments and agencies.

Yes, it makes mistakes, as all large complex organisations do, and is under intense scrutiny. But its performance is generally strong and is increasingly so.

Today, I would like to describe what we have done to get to our current position and where we are heading to improve service standards even further, particularly using technology. 

Three areas of significant challenge

Let me start, however, by putting into context the reform challenges. I will mention just three.

First, like any large service delivery organisation, we face the challenge of rising expectations of citizens. When citizens can order an Uber with a few clicks, or transfer money to another person from their iPhone, they raise their expectations of government services as well.  Many years ago, waiting several weeks to process an application may have seemed reasonable. After all, you would need to get the paper application form, fill in the details with attached documents, and then send it in by mail and wait for someone to manually process it.  Today, people expect everything to be online and for answers to be almost instantaneous. 

We have to meet these rising expectations, particularly for simple digital interfaces, while still accommodating those who are not technologically literate or have very poor skills generally.  So on the one hand we need to invest significantly to provide a digital user experience which is comparable to the best of what the private sector has to offer, and on the other hand provide even better service standards through the more traditional telephone and face-to-face channels.

Indeed in the short term, greater digital channels does not always lead to less demand on other traditional channels.  The volume of calls to our call centre, for example, has increased 85% to 83 million despite significantly enhanced digital channels.

The second challenge I mention is also one that other large organisations face: legacy systems built in the 1980s that struggle to cater for modern demands. Governments of decades past boldly invested in their computerised age, creating significant IT platforms and systems. Our challenge is that, 30 years later, we still rely on many of these systems. In addition, in these fiscal times there is a high bar, and rightly so, when it comes to making the case for large investments to upgrade or replace ICT systems. That means we often need to think deeply about how we can re-use or re-purpose existing ICT assets, or configure off-the-shelf solutions rather than build from scratch as Governments have typically done for so many years.

The final big challenge I mention is more unique to DHS: the sheer complexity of the social security system. We are known internationally to have a relatively well targeted welfare system.  However, the way we have got to this position over the decades has been to have more and more rules to target precise cohorts with individual payments or supplements.

For a long time, this has been a benefit to the nation, but we have reached the point where the sheer complexity means that many Australians cannot navigate it and understand their entitlements and obligations. Further, from an administrative perspective, it becomes increasingly difficult and complex. Consider that there are now 20 types of income support payments, 48 types of supplementary payments, and more than 5 different definitions of income.  All up, there are more than 10,000 rules which Centrelink's system need to refer to while calculating whether someone is eligible for a welfare payment and how much welfare they are entitled to. Those calculations have to happen every fortnight, accurately, and on time, and in a context where people’s circumstances are constantly changing and being updated.

In short, we have high expectations from citizens, legacy systems that we still rely upon (but are steadily transforming), and an immensely complex and changing set of rules. This is the environment that we are working within.

The Government is transforming every part of the department to meet these challenges

To meet these challenges, the Government has been making the investments required to transform every part of the Department of Human Services, and every aspect of how the Department delivers its services.

Firstly, we are working on fundamental changes over the medium term, with very large programmes of work to replace the core ICT systems that run each of Centrelink, Medicare, and Child Support.

Secondly, we are working on rapid changes in the near term, to drive significant improvement in the processes and work practices that underpin our engagement and delivery for Australians right now.

In terms of the medium term effort, let me take you through our Welfare Payment Infrastructure Transformation, or WPIT Programme, which is replacing the core ICT system that runs Centrelink today.

The programme is not just an ICT project however; it is fundamentally reshaping on how we deliver welfare. Process by process, task by task, it is transforming how the department delivers Centrelink services and engages with welfare recipients. 

We are 2 years into a 7 year work plan that will be delivered over multiple tranches. To date, this Government has committed $374 million to this programme.

When completed, this will mean simple digital services are available for almost every aspect of a citizen's interaction with Centrelink: 

  • Simple online applications with dynamic questions and supporting documents can be easily uploaded;
  • Necessary data such as income or student study loads or change of address, coming automatically from other sources;
  • Straight through processing for the vast majority of applicants;
  • Claim trackers to monitor progress; and
  • Simple update of any 'change in circumstance' when it is not done automatically from other sources.

 

Our expectation is that very few people in the future will need to phone the call centre or go to a Service Centre to get assistance or provide documents. We will always have those for difficult cases and for those who cannot access technology, but it will be the exception.

This fundamental rebuild of the business processes is predominantly driven by a desire to improve the citizen experience, but it also reduces costs on government, increases the integrity of the welfare system and will allow policy changes to be implemented more nimbly.

WPIT started with a focus on student payments and we are already seeing dividends.

The best way to outline the progress is to describe the differences from a student's perspective. Let me take you through it.

Before the WPIT programme commenced, when a student applied for a welfare payment, they could apply online, or on a paper form. They would have about 117 questions to answer. If they had a query, they would have to call Centrelink. Even if they applied online, their completed claim form would be then printed out in a Centrelink processing centre, and manually re-typed into the relevant database. A person would have to check with the Tax Office to determine the income the person had received as well as their parents, and possibly check with the educational institution also. This process would take about 9 weeks, and even then around 40% of all applications were rejected for simple reasons such as the person’s parental income being too high. The applicant would have no knowledge of the status of his or her application during this time and so would call Centrelink—hundreds of thousands of calls were to check of claim status. Then, if they were granted the payment but changed their course load down the track, they would have to ring up to inform Centrelink of this change.

As you see, this was inconvenient for the student, terribly inefficient, and created scope for human error along the way.

Now, let me tell you the situation we have today, after WPIT has been working on transforming student claims for around a year.

We have a new online claim form which is dynamic, tailoring questions and reusing already known information. This has helped reduced the number of questions asked of applicants from 117 to 38 for many claims. The data entered by students is able to be processed straight away in the Centrelink database.  They can go to a claim tracker to assess the status of their claim. However, 10 percent of all claims are already straight-through. That is, they receive a real-time answer. Most claims are processed within just 7 days, not 9 weeks. By June of next year, we will have about 40% of claims being processed straight-through. 

We are presently working toward students no longer having to manually tell us their income from their part-time job, because we will get that information directly from the Australian Taxation Office and seamlessly use that data to calculate their payment rates.

If a student has a question about their application, they can ask one of the digital assistants that we have now launched—Sam and Oliver. Since their introduction, Sam, Oliver and staff digital assistant Roxy have assisted with more than 700,000 interactions from customers and staff. This is literally hundreds of thousands of genuine questions answered without people having to call up or visit a Service Centre to get help. What is more, they can receive this help in any location, at any time of day.

New transactions are being made available online all the time. For instance in October we made it possible for students to complete the process to register that they had started or stopped working part time, and register for fortnightly reporting online, with no need to call up or visit a service centre.

This is a complete transformation. As you can see, it is not just digitising the process, but completely re-writing it.

We are moving rapidly to bring these benefits to other types of welfare payments.  The key capabilities that have been developed for student processing—such as the dynamic online claim, the claim tracker, and digital assistants—were done in a manner that enabled them to be extended relatively easily to other payments.

By the end of this current financial year, the new online claim will be implemented and fully available for all major payment types. It is already available for Carer Payment and Age Pension, in addition to student payments.

The next major stage for WPIT is to transform jobseeker payments such as Newstart. The plan is that we will progressively transform each part of the department through this programme, retiring the old systems that were built in the 1980s, and completely changing the way Australians need to engage with Centrelink.

This is a once-in-a-generation undertaking and one of the biggest digital transformations in Australia’s history.

Driving improvement in the near term

These large transformations take time. We have designed the project to be staged in small modules where we can realise benefits early. The student processing and the quick deployment of shared capability that I described, are examples of this. 

However, we are equally focused on driving other improvements in the very short term—in 2 or 5 months, not 2 to 5 years. 

One of the lessons I learnt in January of this year, from rapidly improving the online compliance system, is the enormity of what can be achieved in a short time when you put in place the right conditions.  In a four week period, we had identified the problems, developed conceptual solutions to them, built the solutions, user tested them, cyber tested them, and then launched them.

The conditions for such success are: tight timeframes, key people from different parts of the organisation co-located and working together with full authority, and clear and fast sign-off from key decision makers, including the Secretary and Minister.

We are replicating this model across the department in a series of 'sprints' to implement rapid improvements.

For example, we have methodically worked through a number of the welfare application processes to streamline them, one by one.

We overhauled the Farm Household Allowance application process and introduced a dedicated team of case officers, and reduced application processing times from 16 weeks to 4 weeks for non-complex claims.

We removed unnecessary steps from the Age Pension claim process to reduce the average processing time by 4 weeks.

We re-sequenced the process for Disability Support Pension claims to have health professionals review the claims much earlier. This now ensures that clearly eligible applicants are granted much faster, and clearly ineligible applicants are also identified earlier, and can be supported to apply for a more suitable payment.

We have also made a dedicated effort in 2017 on improving the performance of our call centres. We are right on the cusp of a turning point when it comes to improvements in call waiting times and blocked calls.

We started with a detailed quantitative baseline assessment of where the opportunities lay. The opportunities were prioritised, and then pursued two or three at a time, in a series of intensive initiatives.

The initiatives so far have added the equivalent of hundreds of staff to the capacity of our call centres, and we are seeing the early results coming through now.

One opportunity that we were particularly pleased about was to reform how we delivered Urgent Payments, which has resulted in the freeing up of about 65 full time staff worth of time. These payments assist people in urgent and unforeseen circumstances, by immediately paying out a small portion of their next welfare cheque, say $50 to $100.  They then pay it back the following fortnight. Over 210,000 received such a payment in a year.

What the data showed was that for many people, the urgent payment itself lead to financial distress which then resulted in needing a follow-up urgent payment. It also revealed that 20% of all instances of customer aggression came about from Urgent Payment requests.

As a result of the analysis, we completely changed the process to make it very easy to get two Urgent Payments, but then place people onto weekly payments if they need more than that.

This not only leads to better outcomes for people who are in need, but created efficiencies as well. Those 65 full time staff worth of time can be put towards the call centres.

Other opportunities have been pursued in key sprints as well. Changes to how we manage after call work have been key, as well as innovative use of SMS reminders for people to report their income, and identifying ways to increase recipients’ confidence to use self-service channels.

Within the last few months we have finally implemented the technology that allows big data analysis of the words used in phone calls across Centrelink. The analysis of this data is a potential game changer. We’ll be able to identify emerging problems earlier and fix them, and see where there are patterns of poor service experiences and address them.

Of course, we have complemented this effort with an extra investment in a 250 person call centre, that uses a model that has been in place in the ATO for almost a decade—namely a partnership with a commercial firm with proven capability in this type of work.

Another example of our rapid improvement process is the overhaul of the DHS website completed earlier this year.

The very first question I was asked by the media when I became the Minister was “when will you fix the website so you don’t need a PhD to understand it”.

Now I don’t believe a website is ever “fixed”. Rather they can only constantly be improved, refined, and progressed. However we have made very substantial progress in 2017.

Backed by data about website usage, together with a quantitative assessment of the readability of each section of the website, the department re-wrote the entire website, simplified the structure, made it much easier to navigate, and hugely improved the search functionality. When we were uncertain about taking one approach or another in presenting certain information, we did rapid user testing to have real people tell us which version they preferred.

The results of this website overhaul are clear. Since the updated site went live there has been a 7% increase in the number of pages viewed during each session as well as a 2% increase in the time spent on the website. There was a 150% increase in the proportion of people using search and a 23% increase in the number of searches overall. There was a 44% increase in the average number of pages people viewed after running a search, suggesting they are finding the information they need, and a nine percent reduction in the number of people using the website that finished their browsing on the 'phone us' page.

Finally, we have conducted a series of ‘sprints’ to deliver massive improvements to myGov, which has driven huge increases in usage and user satisfaction.

myGov was for a long time a great idea, with a clunky user interface that locked people out too frequently, was tough to navigate, and often ended up with people having to call up to have their account unfrozen.

In the 2015-16 Budget the Government invested $50.5 million to deliver improvements to the system. 

In partnership with the Angus Taylor, Assistant Minister for Cities and Digital Transformation and the Digital Transformation Agency, we have rolled out a completely new user experience for myGov.

We’ve changed the way the sign-in features work to allow people to use their own email address or mobile number as their username. This has seen forgotten username requests decrease by 37%.

We’ve made changes to hugely reduce the duration and number of account suspensions and lockouts, and we’ve made it much easier to use if you’re overseas or don’t have good mobile phone reception.

The security code sent to a myGov account users mobile has been reduced from a nine digit alpha-numeric code to a six digit numeric code. This has led to a 53% decrease in the number of security codes that were entered incorrectly.

It’s now one of the most reliable Government services, at over 99% availability, and now has best-practice resilience when it comes to cyber security.

Each day more than 265,000 people are using their myGov accounts to do things like complete their tax returns, lodge Medicare claims and register for their digital health records. That is twice as many as two years ago.

myGov now has over 11 million active accounts and is used by 10 different government agencies at both state and federal level. This take-up is rightly the envy of other nations. Our peers have seen only a fraction of the take-up we have. The UK are seen as leaders in digital government, and their service had less than 1 million user accounts around 2 years after their equivalent service was launched.

Since 2013, we have saved over $150 million through reduced postage costs alone due to myGov, as people receive their mail and notifications online.

We are continuing to take on board feedback on myGov, and making continual improvements, but it is a great success story from what can result from a targeted investment, and focus from key leaders.

Data-driven decision making, conducted in short sprint projects such as used in these projects will be the essential element of the ongoing reform to my Department’s service delivery.

Child Support

I also wanted to briefly touch on the changes we are making in Child Support, which my Department is also responsible for. My Department looks after 1.3 million parents who are involved here with about 1.2 million children. Separation and divorce are a difficult time for families and although the child support system is complex, we are working to make sure that it is fair and that all children get the support that they need.

Each individual circumstance is unique. As you may know, this is an emotionally charged area because it involves two important things. The first is your child. The second is monetary support and the transfer of money from one person to another, often in situations where the parents have split in non-amicable ways.

There is quite a complex formula for determining how much one person has to pay the other. Most people accept the formula but some people don't and go to extraordinary efforts to not pay up and not do the right thing.

We are acting to improve it. We have been listening to the many separated parents who have come to us to discuss their challenges with child support, including the child support formula.

Last year, the Government outlined its plans for child support reform with a response to the House of Representatives Committee Report, “From conflict to cooperation: Inquiry into the Child Support Program” and agreed to 18 of the 25 recommendations.

The Government committed $12.4 million to implement the three priority recommendations and we have just introduced legislation to the Parliament to achieve this. These changes include; making it easier for DHS to take a change in a tax assessment into account; encouraging parents to resolve disputes where one parent decides to increase their own amount of care against the direction of a court order and allowing courts to set aside binding child support agreements that are no longer fair.

My Department is also working on improving the delivery of child support improving the way the Department communicates to parents, updating the DHS website to make it easier to navigate and trialling a pilot of specialised staff to assist parents in complex situations.

We have been working on a new core ICT system for a few years to streamline how Child Support works. This project is nearly finished and we are right now progressively releasing a new online interface for parents which they are telling us is easier to use, and better meets their needs. Right now some 50,000 parents are able to use this new interface, and it will continue to be rolled out further in the coming weeks.

Conclusion

When Australians need to access government services, they want it to be quick, simple, and importantly, offered in a way they feel most comfortable.

Australians also value, and expect, that as a lucky country we will continue to have a strong social welfare safety net.

That’s why this Government is making the investments required to transform how we deliver welfare payments and services. Overhauling the ancient ICT systems, driving short term improvements to the service experience, reducing call wait times and application processing times.

We are doing the hard work to make the improvements Australians want to see, and real gains are beginning to show themselves.

However it is reasonable that we also ask the Australians that engage with the welfare system to take personal responsibility, and engage digitally and via self-service where they are capable of doing so.

The Howard Government put it well when they called on Australians in 2002 to support the system that supported them, by ensuring they accurately reported their personal and financial circumstances to Centrelink to avoid being overpaid.

The same request could be made to Australians today, to take full advantage of the suite of options now given to them to engage with Centrelink at a low cost to the taxpayer, through the rapidly improving digital and self-service options we will continue to make readily available.