Angus Taylor: big data, big benefits, big savings in digital

(QESP Editor’s Note:   The following is an extract from a 21 April 2016 article in The Mandarin by

Angus Taylor, Assistant Minister to the Prime Minister with special responsibility for cities and digital transformation. The original is available athttp://themandarin.us8.list-manage.com/track/click?u=2decc67f06bfa54d2335d6308&id=859b95b2fa&e=1609091ee4)

OPINION: The promise of digital government is enormous. But, Malcolm Turnbull’s digital transformation adviser writes in a new monograph, it must reach all tiers and areas of government to realise potential.

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In October 2013 the Obama regime launched the centrepiece of its new healthcare program. The website, healthcare.gov, had cost hundreds of millions of dollars to build and was heralded as a hub that would offer seamless access to health insurance. Immediately after launch, however, the site started crashing. Users found themselves waiting so long that the site was essentially unusable and quickly became the butt of television talk show jokes.

“When you type in your age, it’s not clear if they want the age you are right now, or the age you’ll be when you finally log in,” mocked Jay Leno. President Barack Obama had no choice but to take it on the chin. “There’s no sugar-coating: the website has been too slow,” he said, “and I think it’s fair to say that nobody’s more frustrated by that than I am.”

Much has been written on the causes of the crashes, but central to the problem was the need to screen individual users according to their eligibility for healthcare subsidies so they would only see personalised prices. It meant verifying the identity of the user by linking to a range of different government databases. The ability to break down silos across government and provide an integrated customised picture for consumers or citizens is one of the key challenges to digitising government services, but it had failed its first serious test.

The failure was a political and public relations disaster for the Obama administration which had worked hard to build support for its controversial healthcare scheme. The signing of the Patient Protection and Affordable Care Act was the culmination of many years of negotiation with myriad interest groups, Congress and the Senate. The launch of healthcare.gov was to have been a symbol demonstrating that the scheme was up and running. Some of America’s top government officials had been deployed to work on the project and little expense had been spared in commissioning respected IT experts. So what had gone wrong and who was responsible?

An investigation by the Government Accountability Office attributed the blame almost entirely to the administration. Bureaucrats had failed to give contractors a coherent plan and forced them to work within compressed time frames. Bureaucrats kept changing the contractors’ marching orders creating confusion and adding tens of millions of dollars to the cost. Oversight procedures had been poor and lines of responsibility blurred. Even before the disastrous launch, an expert complained “the political people in the administration do not understand how far behind they are”.

(QESP Editor’s Note: The original article discusses the global impact of the healthcare.gov  failure  on voter confidence in Government attempts to reshape public service.)

Public service innovation and productivity goes missing

In economic terms, the fundamental problem is a lack of productivity improvement in the provision of public services. Whether it is health, education, employment services or transport infrastructure — governments simply haven’t put enough emphasis on rapid improvement in the quality and cost of public services. These challenges will only get tougher. Rapid ageing of the population will put enormous pressure on budgets, as older populations work less and require more spending on health, welfare and aged care.

(QESP Editor’s Note: The original article provides a graph of Australian labour productivity 2001-2010 and quotes a number of distinguished  economists  to explain how the problem has arisen.)

Australia’s starting point in delivering public service is not hopeless. In some areas, Australia is already a world leader. Our health system fares reasonably well, and until recently our education performed well too. We have a tax and welfare system that is progressive and well targeted compared to others. The problem is more about the future than the past. In recent years, the dials have all started moving in the wrong direction and change is desperately needed.

So what’s the answer?

The rapid evolution of information technologies offers the potential to give power back to customers and citizens and away from inflexible governments and their chosen providers. We have already seen this happening in the private sector; the public sector now needs to play catch up. Customers of our public schools, health system and welfare system — even “customers’ of our taxation system — can be empowered like never before through web technologies. This will challenge vested interests and providers to focus more on customers and less on themselves.

There is, unfortunately, increasing cynicism about the ability of the political class to drive reforms to solve this problem. Political parties are fragmenting in many countries as small parties gain momentum, and media polarisation is rewarding populism on both the left and right. Legislative deadlock is endemic. The interests and views of mainstream voters are not cutting through.

All of this at a time when technology offers to radically transform delivery of public services — education, health, welfare, justice, infrastructure, national security and tax collection. At no time in the history of government have we been in a better position to deliver improved services in all of these areas, and technology is at the heart of the opportunity.

The promise of digital government

Two very simple ideas are central to this monograph.

First, technology offers the potential for substantially reduced costs alongside improved and better targeted government services. Disruption in the delivery of an increasingly complex array of government services is now possible in ways that were never previously anticipated. In defence, health, education, policing or food labelling, every aspect of government needs to be re-examined with an eye to what can and should be done differently to reduce costs and improve services.

Second, empowered consumers and citizens can drive reform in ways that traditional political processes can’t, particularly as we increase competition and contestability in the provision of services like aged care and disability. If public sector unions want to block innovations that voters understand and want, voters can apply political pressure. When vested interests get in the way of sensible reforms, transparency will help to shed light on their undue influence. Not only can we disrupt traditional lacklustre public service delivery, but we can redefine regulation and how citizens and customers regulate services for themselves.

These two powerful ideas put the citizen or the customer back at the centre of the work of the modern state, in line with fundamental liberal and conservative principles. Government has become a self-serving beast, and digital technology offers the potential to tame government and refocus it for the benefit of all. Many conservatives and traditional small government liberals have given up on the idea of smaller more effective government which empowers citizens to realise their own aspirations. Efficient government sharply focused on customers and citizens can make a major contribution to reasserting this possibility.

A great deal of work has been done in this area in recent years, but the results are still limited. At the federal level, the Government 2.0 initiative, AGIMO, the Digital Transformation Office and GovHack have all focused on dealing with aspects of this problem. Similar initiatives can be found within state governments.

That past work doesn’t need to be replicated, but we desperately need a clearer, more strategic and more focused picture of what is possible, and how we get there. This monograph doesn’t set out to provide a detailed blueprint of everything that has to be done to achieve digital nirvana. In fact, much is not knowable. We do need a strategic focus on how we can infuse digital thinking into our most important reforms in every part of government and beyond. We need to see more clearly the potential to deliver more with less, at a time when reform seems beyond reach.

This work is focused on the potential of digital government across all levels of Australian government. We can only realise digital technology’s full potential if it reaches all tiers of government, and all areas of government. However, the primary focus is on the federal government given its dominant role in modern Australia.

Digital technology offers the promise of containing growth in spending, vastly improved services and genuine reform. It is time for Australian governments to step up and embrace this extraordinary opportunity.

This extract is the first chapter in Angus Taylor’s new monograph The Promise Of Digital Government: Transforming Public Services, Regulation and Citizenship, published by Connor Court by the Menzies Research Centre, edited by and with a forward from Nick Cater