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Roger Clarke's 'Realities of SDR'

The Realities of Bowen's 'Service Delivery Reform'

Draft of 17 December 2009

Roger Clarke **

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1. Introduction

On 16 December 2009, Minister for Human Services (and a number of other things), Chris Bowen, gave a speech at the National Press Club. It was entitled 'Service Delivery Reform: Designing a system that works for you'.

The positive picture painted by the speech is a long way from the reality. This paper provides my initial reactions to it. At the stage it was prepared, the media coverage had merely provided quotations and paraphrases from the speech, with no evidence of further briefings, additional sources, or analysis.

2. Background

The Department of Human Services (DHS) was created by the Howard Government as a 'portfolio department' or 'super-ministry', in order to bring multiple service-delivery agencies under a single senior Minister. The most important of the agencies were Centrelink, Medicare and the Child Support Agency (CSA).

DHS was highly centrist in its style from the outset. It drew on the long desire of the Health Insurance Commission (HIC, which ran Medicare from 1983, and proposed itself as the hub of the Australia Card scheme in 1985) to expand its scope from 'health insurance' to 'health information', and to consolidate personal data about the entire population from as many other programs and agencies as it could.

For some years, DHS made only a modest impact, but it did create a single-signon service to its multiple agencies in 2006.

Its main claim to fame has been the disastrously misconceived Access Card. This aborted project cost not only taxpayers many millions of dollars in return for absolutely nothing, but also the many scores of companies who tendered for business. The primary reason for the failure was the lack of real-world understanding on the part of the sponsors. In the area of privacy alone, DHS refused to engage with the public and advocacy organisations, and contrived a 'Task Force' as a buffer between the public and its staff. Despite the fiasco, the Minister who oversaw it (Joe Hockey) became famous enough to compete for his party's leadership two years later, the lead bureaucrat kept her job, and the lead 'architect' kept hers as well.

By the time Labor gained office at the end of 2007, DHS had succeeded in growing into a very large organisation, despite the fact that it delivered no services, and even did little in the way of policy formation. It convinced the new Minister (Joe Ludwig) that his inclination to engage with privacy advocacy organisations was ill-advised, and he reneged on his undertakings to do so.

By late 2009, the DHS bureaucracy had swollen enormously. It would be interesting to know on what basis the Department of Finance accepted the massive increase in staff and costs. By then, the service-provider CSA had been dragged inside the nominally policy-oriented portfolio department DHS - presumably as a defensive measure, to make the agency more difficult to dismantle. Quite apart from CSA, there were now about 50 senior executive service officers in DHS, whose salary packages alone ran to $10 million p.a.

A build-up of bureaucratic mass means that there are a great many people in need of something to justify their existence. The next great government announcement was prepared.

3. The Announcement

The speech at the National Press Club on 16 December 2009 is to date the sole source of information about the 'Service Delivery Reform' (SDR) initiative. The speech also addressed a few other matters, which are not considered in this paper.

The key statements Bowen made about SDR are as follows:

"The time has come to redesign our service delivery to maximise convenience for [customers]. And, in the process, we need to take advantage of the obvious synergies available across our service delivery agencies".

"The most visible aspect of the Government's service delivery reform plan will be a move to co-locate Human Services agency offices ...".

"The Mobile Office builds on [the Drought Bus] servicing model.  It's physically much larger and offers many of the facilities you'd find in a Centrelink office, such as waiting areas, private interview rooms and information stands'. [How big is this bus??]

"Human Services agencies will have a single phone number ... by the end of 2010". [DHS already advertises a common 'Report Fraud' line. The vast majority of customers make contact with agencies in relation to a specific program, and a wide range of specifically targeted numbers exist, e.g. for Centrelink. The single phone number would be likely to service primarily new entrants to the safety net, and people who lose the more direct number.]

"Human Services agencies will have ... a single website by the end of 2010", and "[We are] providing a single online access point for a wide range of government service". [In fact, the DHS portal has been in operation for 3 years, since 2006 - myaccount].

"If, for example, you inform Medicare of a change of address, we'll ask if you would like us to let other parts of DHS know. If, however, you would prefer to fill your details in every time you deal with a different part of DHS, rather than having fields pre-populated, that will be your prerogative". [This facility has been proposed on multiple occasions over at least the last 15 years, but it has never been delivered; yet it is re-announced as if it were a fresh, new idea.]

"Medicare and Centrelink [will be merged into DHS] ... freeing up back office resources. [But] the Medicare and Centrelink brands and business lines ... will remain intact and their roles will remain distinct".

Consistently with the lack of responsibility taken for disasters, the head of the SDR Task Force is none other than the head of the Access Card fiasco. DHS's current 'Chief Technology Architect' was another key senior executive in that project. Judging by media reports, the current CIO of DHS is being replaced by the current CIO of Centrelink, or is having him brought in over his head.

4. Motivations for the Initiative

This section considers the possible reasons why this initiative has been conceived.

4.1 Enhanced Service Delivery

The speech mentioned aspects of service delivery many times. However, many of the key improvements that could be achieved have been announced many times before, and are supposed to be already in place. In particular, the suggestion that "a single online access point" will be provided is pure spin, because a single-signon service has been place for 3 years, and a plans for a broader service have been pursued for over 5 years, in recent times by means of expansion of DHS's own portal.

Even more extraordinary was the claim that "all forms across the portfolio will be digitised". Commitments of this kind were made long ago, and the projects were supposed to have been completed a decade ago!

The single phone-number (a proposal that has been around for decades) was combined with the suggestion that "this number will effectively act as a triage service". A triage service is a means of making sure that the most urgent cases are addressed first. It metes out inadequate resources in order to enhance the speed of service for the most needy categories of case, and in the process necessarily delays all of the others. Whoever wrote those words for the Minister was merely casting about for a word that sounded fresh and positive, without doing any research into what it means, and what implications it has.

A few aspects of the story deserve less scepticism, such as Centrelink's Mobile Office / 'drought bus', and coordination of services for 29 targeted indigenous communities. On the whole, however, the suggestion that the initiative is all about, or even primarily about, service-delivery is simply not credible.

4.2 Cost-Savings

Savings are being sought in two ways. The first strategy is a perennial - the encouragement of more use of cheaper communications channels, and less use of expensive ones. Internet transactions are the cheapest, especially where the interaction is fully automated, and all the more so where customers capture data into the agency's system themselves, rather than paid employees or contractors having to do it. Telephone transactions are the next cheapest. Visits to offices are far more expensive.

The second cost-saving strategy is based on the assumption that economies of scale and scope are achievable. It involves the consolidation of offices, the multi-skilling of staff-members, and the avoidance of duplication of administrative resources.

The speech referred to "the obvious synergies available across our service delivery agencies", "a move to co-locate Human Services agency offices", "freeing up back office resources", "combined back office operations - instead of separate administration for each agency", and "[avoiding] having two staff spending their time on identical administrative tasks".

Further, despite the assurance that "nor is it about staff cuts", reference was also made to "savings for Government, some of which can be reinvested in better service delivery" and the statement was made that "any reduction in total staff numbers ... will occur primarily through natural attrition" (emphases added). In addition, the speech underlined the critical importance of the cost-savings motivation: "This reform will generate efficiencies and savings for government" (emphasis in original).

4.3 Social Control

The words 'fraud', 'waste' and 'over-servicing' were remarkably lacking from the speech. All seemed to be sweetness and light, and the usual scapegoats of 'dole bludgers', 'welfare fraudsters', 'illegal immigrants', 'dead-beat Dads', 'doctor-shoppers' and 'over-servicers' were no longer centre-stage.

The fact is, however, that a great deal of the energy of all of the service-delivery agencies within the DHS portfolio goes into 'compliance', and nomatter how government schemes in the area of social welfare are first announced, a large proportion of the intent, the design and the effort is associated with attempts to rein in miscreants.

Indeed, the first media article published, following announcement of the impending speech - but prior to its delivery - referred to the scheme as being a "tool to track down welfare cheats and deadbeat parents attempting to avoid child support payments", that "would also aid the fight against so-called 'doctor shoppers'" (Probyn & Wright 2009).

4.4 Foundation-Laying

A cabal of senior executives has long harboured the desire for a national identification scheme. That's why it keeps re-surfacing in different guises, through different agencies, under different Governments, and sponsored by different Ministers.

The succession of attempts during the Howard regime were either rebuffed or collapsed under their own weight. A scheme that smelt like the Access Card would be unpopular, and would be too readily depicted as being in violation of the Labor Party's last election platform.

The alternative approach was to first develop elements of the national id scheme other than the Card and the coordinating database, and hence achieve plausible deniability of the proposition that there's a grand plan.

A further rational design criterion would be the ability to undertake the early stages of the initiative on an administrative basis, without having to seek Parliamentary approval. That would enable the achievement of a fait accompli, and generate momentum whereby the more intrusive aspects could be added later.

There's considerable risk involved in Bills that go before a split Senate, and Senate Committees. A Senate Committee demands more solid information about the project, and offers a focal point for the disaffected public and public interest advocates. On rare occasions (including, to the Senate's credit, the Access Card), Senate Committees can even scuttle projects.

5. Analysis

This section considers further aspects of the SDR initiative.

5.1 Feasibility

The assumption made by the speech-writer is that services can be improved and/or savings can be made by exploiting economies of scale and scope. The agencies involved are, however, very large organisations that operate very large and complex systems, supporting well over 100 distinct government programs, which differ from one another across many dimensions.

Rather than economies of scale, it's very likely that these systems are already into the realms of diseconomies of scale. If that's correct, then no benefits will arise from the mergers. Worse, layers of additional middle-management will have to be created, initially to cope with the mis-fits between systems, and subsequently to mediate among the greatly increased numbers of interacting programs and the sections and branches that run them.

The personal data used by these programs is highly diverse, and was designed to meet the needs of individual programs (which is why the scores of compliance programs over the years have delivered far less than their proponents pretended they would, and why a vast amount of time is wasted coping with the false positives generated by matching programs and the inappropriate inferences drawn from merged data). Added to that, the business processes, the applications, and the infrastructure supporting them, are diverse. The suggestion that staff are "spending their time on identical administrative tasks" overlooks both the diversity of services and the importance of that diversity to the quality of service delivery.

Finally, the kinds of customers and stakeholders involved in each program are highly diverse (e.g. in alphabetical order, asylum-seekers, the disabled, doctors, drug-addicts, the poorly-educated out-of-work, the well-educated out-of-work). As a result of all these dimensions of diversity, there are considerable differences in corporate culture among the agencies involved.

Hence, rather than the hoped-for economies of scope, what is much more likely is diseconomies of scope. The sheer confusion among missions, priorities, targeted customer categories, values, and data-items, will make coordination impossible, and commit an even larger proportion of the time of staff at all levels to playing politics against other parts of the agency.

Yet worse, the speech raised the prospect of an even more monstrous gorilla being created. Firstly, there was reference to "the potential for co-location and joint service delivery between my portfolio and other federal government agencies". Then the scope was extended to other jurisdictions: "what's to say state governments will not [choose] to co-locate their service delivery with the Commonwealth both physically and through the Internet". Finally, the private sector and not-for-profits were included as well: "We are in discussions with other government and non-government agencies about locating there to make it a truly one-stop shop".

The SDR initiative looks like a major train-smash, before the train even leaves the station.

5.2 Quality of Service

There are many welfare programs precisely because there are many different difficulties that people encounter that causes them to need access to 'safety net' features, and there are many different contexts in which those difficulties arise.

The consolidation of agencies inevitably results in the imposition of the views of the political winners on the political losers. Policies and practices will be realigned, and new norms will arise. At least some of the services will inevitably suffer from a reduction in the quality of services, as the objectives of those services are compromised by the demand for conformance with norms and budgetary constraints set by an administrative apparatus that lives on a different planet from the frontline service-providers.

5.3 Data Consolidation

The speech was written so as to give the impression that no data consolidation will occur: "It is not a central database. We will not house an individual's personal, sensitive information in one place, vesting all control with one body or one card.  This is not an Australia Card and we will not be merging agency databases. ... We are bringing IT platforms together, not information itself" (emphases in original).

These protests are simply not credible.

Services will be consolidated. Staff-members will have to be multi-skilled. Front-line staff and their supervisors will have to access data relating to the individual or family, that arises in relation to all relevant programs, and that is stored in all of the relevant systems. The data will of necessity be consolidated on at least the desktop. In order to facilitate consolidation on the desktop, the infrastructure has to provide means of linking data that is stored on disparate databases under different identifiers, extracting copies of it, transporting it, and inter-relating it.

The speech-writer found themselves talking in both directions at once, saying "We are bringing IT platforms together, not information itself", but then "we have excluded health information from these reforms". It is necessary to infer from the second sentence that information other than health information is included in the reforms - which is in direct conflict with the first sentence.

5.4 Privacy

With so little information on the table at this stage, an analysis of the privacy profile of the SDR initiative is infeasible. The following concerns, however, are already evident.

As noted above, the speech includes the pretence that personal data is not involved, only "IT platforms".

The speech also includes the statement that "we have excluded health information from these reforms". It does neither the agency nor the Minister any credit to wilfully make such a grossly misleading statement. A great deal of personal health data is involved in a great many of the programs run by all of the agencies that the initiative proposes ramming together under one roof. It's completely meaningless to suggest that there is any manner in which health information within the DHS portfolio can be "excluded from these reforms".

The statement is made that "we will give full control to individuals about how their sensitive information is shared across agencies for their convenience". A great many of the people involved are heavily dependent on the particular programs and the particular agency or agencies. It is nonsense to suggest that consent can be freely-given in such circumstances. The offer of 'sign this form or go and wait in some other queues' cannot result in freely-given consent, any more than 'you have to approve release of this data from that source, otherwise I can't consider your application'. There are (for very good reasons) specific requirements for the provision of particular personal data to support particular requests for support. Speech-makers should not make the Minister pretend that compulsory provision of data is based on consent.

A further pretence in the speech is that "We ... have a robust consultation process on this and other parts of these reforms". The privacy advocacy community has not been able to achieve meaningful dialogue with DHS since at least 2006, and it is completely unclear what process the Minister was supposed to be referring to. Moreover, claims about public consultation have to be seen in the context of the appointment to head the Task Force of a senior executive whose record in public consultation is not just nil, but negative - in the sense that she has studiously avoided any form of engagement with the public and with privacy advocates.

More broadly, it is a matter of serious concern that the speech-writer saw no need to include the term 'Privacy Impact Assessment'. The Privacy Commissioner's Guidelines make it abundantly clear that a PIA is a requirement, and the ALRC's Report placed great weight on the process.

Finally, the public expects the Privacy Commissioner to fulfil the role of an external watchdog. But that role has been undermined by DHS's co-option of the agency, through the announcement in the speech that the Commissioner is acting in a role appropriately performed by a consultant. The intention is clearly to neutralise the Commissioner, by getting their fingerprints on the DHS's barrel.

6. Conclusions

Over twenty years ago, the consolidation of government agencies appeared to be a likely means of assisting in the imposition of dataveillance on the population: "An additional facilitative mechanism for both personal and mass dataveillance is referred to here as 'data concentration'. The conventional approach is to merge existing organizations in search of economies of scale in administration. If the capabilities of large-scale data processing equipment were to continue to increase, the merger of social-welfare and internal-revenue agencies could be anticipated ..." (Clarke 1988).

We expect senior executives of government agencies to look for ways to exploit information technology to achieve social objectives. So a search for economies of scale through computing is natural. But we also expect senior executives not to follow technology blindly, and not to assume that economies of scale and scope go on forever, and that diseconomies of scale and scope never set in.

Australians who depend on Centrelink (i.e. over 20% of the population) and Australians who depend on Medicare (almost all of the population) have every reason to be very nervous about how the ill-conceived SDR initiative will reduce the quality of services, increase the costs of running them, and further undermine the privacy of sensitive personal data.


Clarke R. (1988) 'Information Technology and Dataveillance' Commun. ACM 31,5 (May 1988) 498-512, at

Probyn A. & Wright S. (2009) 'ID plan to curb welfare cheats' The West Australian, 15 December 2009, at

Winterford B. (2009) 'Bowen to announce Government data reforms' IT News, 15 December 2009, at,bowen-to-announce-government-data-reforms.aspx

Author Affiliations

Roger Clarke is Principal of Xamax Consultancy Pty Ltd, Canberra. He is also a Visiting Professor in the Cyberspace Law & Policy Centre at the University of N.S.W., and a Visiting Professor in the Department of Computer Science at the Australian National University.

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