There’s no doubt that the data revolution that’s unfolded globally in the last few years has highlighted key inefficiencies, opportunities and resulted in an inordinate amount of change. Change in the way we do and think about our business, and while the opportunity is huge it is not without its challenges.
Below are parts of a conversation we recently had with Richard Mackey, Director, Strategy Research (Strategic Branch, Strategic Policy & Planning Division) from the Australian Department of Immigration and Border Protection. We talked about the challenges facing the Australian government on its road to securing a digital economy. The conversation reflects Richard’s personal views; they are not those of his employer and ought not be construed as those of his employer or the Commonwealth Government.
Richard explains that in 2015/16 the Australian Public Service (APS) cost about $50 billion, had a workforce (excluding military and reserves) of about 167,000 and administered about $451 billion. The APS can have a positive or negative impact on Australia’s prosperity depending on the efficiency, productivity and the cost-effectiveness with which the services are provided. This is because the services are essential for Australia’s prosperity. The better the services, the greater the prosperity; conversely prosperity falls if the APS provides the services badly. If high quality services could be provided at a significantly lower cost, the money saved could be used to improve the Commonwealth’s financial circumstances.
The extent to which the efficiency, productivity and the cost-effectiveness of the APS is being improved is important to Australia.
Public sector data
In April 2015, the Secretary of Prime Minister & Cabinet commissioned a study on how public sector data can be leveraged to create an efficient government, increase productivity and growth. A roadmap has been developed to grow the Commonwealth’s digital economy and transform how policies and services are delivered.
A recent PwC report on how data-driven innovation is fuelling Australia’s economic growth, made an important reference to the opportunity for government to leverage its data to improve service delivery and policy decisions. According to the report:
“The sheer size of government, representing around one third of Australia’s economy across all levels, makes it a pivotal player. It has a significant opportunity to improve its own services, like education and training, and administration and support, which have substantial room for improvement in innovating with data. Government should prioritise the provision of open data as a key input for the Australian economy and provide senior political leadership to ‘get on with it’ in order to support wider innovation by other players”.
The opportunity is massive but, the road ahead is not without its challenges.
Almost 35 years ago a series of major failings of Commonwealth administration had established beyond reasonable doubt that the APS had to be radically overhauled. The case had been made for:
- valid, reliable easy to understand performance information
- sound measures of efficiency, productivity, cost-effectiveness
- high integrity administration
- clear-cut, unambiguous accountability
- responsiveness to government
- no more scandals
Yet in 2017 the Portfolio Budget Statements, which should contain valid, reliable easy to understand performance information about Commonwealth administration, are as opaque as they were three decades ago.
In 2011 almost 30 years after an overwhelming case was made for all Commonwealth agencies to have sound measures of efficiency, productivity, cost-effectiveness, the Department of Finance announced:
“It is difficult to measure efficiency in the public sector, particularly because of the problems associated with measuring changes in quality and outputs. The OECD has noted that ‘productivity gains in the public sector are very difficult if not impossible to measure’. This poses a major obstacle to developing a budget process that focuses on inefficiency”.
Because of a peculiar attitude of the Commonwealth Department of Finance, there is no objective way to assess the efficiency, productivity or cost-effectiveness of the $50 billion annual outlay.
In marked contrast, the COAG/Productivity Commission Reports on Government Services produced each year every year for last 20 years present a marked contrast to the DoF’s obfuscation. These reports contain useful measures of efficiency, productivity and cost-effectiveness of the public sector. Last year these reports covered government services costing $192 billion of recurrent government expenditure, which was 2/3 of all recurrent government expenditure and constitutes 12% of Gross Domestic Product.
Commonwealth administration now faces challenges much, much greater than those of the past four decades. There is combination of circumstances that in aggregate are radically different to those of the past.
Just as in the past, the Commonwealth requires a reform agenda commensurate with current circumstances. Now a radically transformative set of circumstances requires a radically transformative set of reforms. These circumstances include: digital disruption; e-government; e-commerce; e-service; data sharing and big data; and Australia’s financial, economic and geo-political circumstances.
On many scales there is increasing: uncertainty, complexity, connectivity, pace of change and digital disruption. We are in an era of volatile and massively changing global power, economic and financial structures. At the same time there is:
- a marked decline in Australia’s terms of trade
- adverse structural imbalance in the Commonwealth Budget as well as the budgets of the states and territories
The radically transformative set of reforms is, in a nutshell: digital administration for a digital community in a digital world.
In closing, PwC’s above mentioned report highlights the following:
“Now, more so than ever before, businesses have the ability to harness data to make decisions based on real- world behaviour rather than random sampling. New data-driven goods or services and supply chain innovations can be a source of major competitive advantage.
For the public sector, which makes up one third of our economy, the innovative use of data can profoundly change how policy is formed and services are delivered. Data-driven innovation across both the public and private sectors could help to improve the efficiency and effectiveness of planning and delivery of public services – even changing how they are perceived and built.”
To learn more about Richard’s experiences, register for the Chief Data Analytics Officer Public Sector Australia.
About Richard Mackey:
Richard Mackey is a highly respected contributor to public policy and administration.
His contributions include property rights for fisheries management; the use of outcomes and outputs in the budget; improved data, systems and data analytics in the Australian Taxation Office.
At the Chief Data Analytics Officer Public Sector on 2-3 May in Canberra, Australia, Richard will argue that the wise use of data analytics and quantitative methodologies will be essential to improving all aspects of public administration (policy, service delivery, performance and compliance) enabling government agencies to thrive in the circumstances of the combined agendas of e-government; e-commerce; e-service; data sharing and big data, given Australia’s financial, economic and geo-political circumstances, but require managers who understand the methodologies and the analytic bases of public administration in much more sophisticated ways than ever before.
Richard is Director of Strategic Research in the Department of Immigration and Border Protection. He has held senior positions in central agencies, the Australian National Audit Office, state administration and the private sector.
By Charlene Cassie:
Charlene Cassie is the Conference Director for Corinium. For enquiries, email: [email protected]