Finance and Public Administration References Committee

1 The Senate Finance and Public Administration References Committee Digital delivery of government services June 2018 ii Commonwealth of Australia 2018 ISBN 978-1-76010-778-9 Senate Finance and Public Administration Committee Secretariat: Mr Tas Larnach (Acting Secretary) from 13 April 2018 Ms Ann Palmer (Secretary) until 12 April 2018 Ms Cathy Nembu (Acting Principal Research Officer) Ms Kathryn Cochrane (Senior Research Officer) Ms Nicole Baxter (Administrative Officer) until 11 April 2018 Ms Michelle Macarthur-King (Administrative Officer) from 12 April 2018 Ms Jo-Anne Holmes (Administrative Officer) from 12 April 2018 The Senate PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3530 Fax: 02 6277 5809 E- mail: Internet.

2 This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs Australia License. The details of this licence are available on the Creative Commons website: Printed by the Senate Printing Unit, Parliament House, Canberra. iii Membership of the Committee Members Senator Jenny McAllister (Chair) ALP, NSW Senator James Paterson (Deputy Chair) LP, VIC Senator David Fawcett (from to ) LP, SA Senator Kimberley Kitching ALP, VIC Senator Bridget McKenzie (to ) Senator Amanda Stoker(from ) NAT, VIC LP, QLD Senator Lee Rhiannon AG, NSW Senator Lisa Singh ALP, TAS Substitute Members Senator Jordon Steele-John (for Senator Rhiannon on ) AG, WA Participating Members Senator Rex Patrick CA, SA v Table of Contents Membership of the Committee .

3 Iii Acronyms and abbreviations .. xi Recommendations .. xv Chapter 1 .. 1 Committee views and recommendations .. 1 The promise of digital transformation .. 1 Failure of leadership .. 4 The reality of 'digital transformation' so far .. 6 The cost of consultants and contractors .. 8 Building digital capability in the APS .. 8 Report Structure .. 12 Chapter 2 .. 13 Background and context .. 13 Referral .. 13 Overview .. 13 Previous inquiries into government ICT .. 14 The Gershon Report .. 14 Audit of Australian Government ICT .. 15 The history of the Digital Transformation Agency.

4 16 The Digital Transformation Office .. 16 The creation of the Digital Transformation Agency .. 17 The DTA s current role .. 18 Leadership .. 19 Recent Incidents .. 20 Australian Taxation Office 'outages' .. 21 Department of Human Service 'robo-debt' .. 21 vi Department of Human Service's 'sale of Medicare card numbers on the darkweb' .. 22 Department of Human Services child support replacement system .. 24 Australian National Audit Office Cyber Security Follow-up Report.. 24 Australian Bureau of Statistics eCensus denial of service .. 26 Department of Home Affairs.

5 26 The NAPLAN online failure .. 27 The Australian Apprenticeship Management System .. 27 The Biometric Identification Services Project .. 28 Chapter 3 .. 31 What is 'digital transformation' of government services .. 31 Introduction .. 31 Perspectives .. 31 Whether government is different from the private sector .. 33 What questions should government be asking? .. 36 'Being digital' rather than 'doing digital' .. 37 Chapter 4 .. 41 Challenges faced in undertaking digital transformation .. 41 Introduction .. 41 Critical challenges to digital transformation.

6 41 Systems architecture issues .. 41 Infrastructure design .. 41 Managing complexity .. 44 Legacy issues .. 47 Cyber security, risk and resilience .. 48 Privacy .. 51 Digital identity .. 53 The diversity of users and their needs .. 55 Public expectations of government in digital transformation .. 55 vii The retention of traditional methods of engagement with citizens .. 57 Website design .. 59 Data storage security .. 60 Chapter 65 Whole-of-Government Issues .. 65 Introduction .. 65 Leadership and accountability .. 65 The need for an agreed vision.

7 65 Senior leadership and digital capability .. 65 Devolved decision-making .. 67 Outsourcing has deskilled the APS .. 67 The skills shortage .. 68 The generalist 69 Cost-saving policy leads to deskilling .. 69 Rebuilding skills .. 70 An APS ICT digital profession .. 70 Building digital competence .. 71 Project management capability .. 72 Current initiatives .. 74 Procurement .. 75 Whole of government .. 75 Procurement expertise within the APS .. 75 Access to tendering process in procurement .. 76 The 'undigital' nature of current procurement methodologies.

8 77 DTA response .. 77 A common approach .. 78 Platforms .. 78 Common activities need a common approach .. 79 Chapter 6 .. 81 viii Case 81 Introduction .. 81 Australian Taxation Office Unplanned Systems Outages .. 81 Background .. 82 DTA's response .. 84 The outage .. 84 Overview of the ICT purchasing decision .. 85 Contracting arrangements .. 86 Increase in contracting activity in 2009 .. 89 Committee view .. 90 Child support system replacement project .. 91 DTA response .. 94 DHS response .. 95 Committee view .. 97 Online Compliance Intervention (Robodebt).

9 98 Background .. 98 The development of OCI .. 101 The ATO role in data matching .. 102 The OCI letters .. 102 DHS' assessment of OCI .. 103 Systems design issues .. 104 Committee view .. 106 Welfare Payment Infrastructure Transformation .. 106 Background .. 106 DHS Response .. 108 Committee view .. 111 Government senators' dissenting report .. 115 Leadership .. 115 The Australian Public Service .. 117 ix Common platforms and procurement .. 119 The Digital Transformation Agency .. 120 Australian Greens' additional comments .. 123 Summary .. 123 Affordable, quality broadband internet.

10 123 Appendix 1 .. 125 Submissions and additional information received by the Committee .. 125 Submissions .. 125 Tabled Documents .. 126 Additional Information .. 126 Answers to Questions taken on Notice .. 126 Appendix 2 .. 129 Public Hearings .. 129 xi Acronyms and abbreviations AAMS Australian Apprenticeship Management System (replaced TYIMS) ABS Australian Bureau of Statistics ACCAN Australian Communications Consumer Action Network ACS Australian Computer Society AIIA Australian Information Industry Association APP Australian Privacy Principles APS Australian Public Service APSC Australian Public Service Commission ASD Australian Signals Directorate ATO Australian Taxation Office BAU Business As Usual Capex Capital Expenditure CC Centralised Computing Code Australian Public Service Privacy Governance Code Committee Senate Finance and Public Administration References Committee COTA