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The Role Of Human Services: Joe Hockey

The Minister for Human Services, Joe Hockey, today outlined his new Department’s role in improving the delivery of health and welfare services.

HockeyAddressing the National Press Club in Canberra, Hockey said “Human Service Agencies are responsible for delivering over 200 services – bringing them together provides the opportunity to review their operations and gauge their efficiency from a customer’s perspective.”

The Department of Human Services, for the first time, brings together under one umbrella six of the Government’s most important service agencies: the Health Insurance Commission, Child Support Agency, Centrelink, CRS Australia, Health Services Australia and Australian Hearing.

Collectively, the Human Service agencies are responsible for delivering over $80 billion in benefits and services each year, the equivalent of around 10 percent of Australia’s GDP to over 20 million Australians.

  • Listen to Hockey’s Address with Questions (59m)

This is the official transcript of the National Press Club speech by the Minister for Human Services, Joe Hockey.

Making Life Easier – the Role of Human Services in Improving Commonwealth Service Delivery

The most common question I am asked these days is:

What is Human Services?

In short, Human Services is what it says – it’s about providing services to people.

Through the umbrella of my Department of Human Services, the Australian Government distributes over $2600 per second. That’s $2600 every second, of every hour, of every day each year.

Some flippantly refer to my role as that of Paymaster General. It is however a little more complicated than spending a few hours signing some very large cheques.

I see my role as making people’s lives easier and more secure through simpler and more effective access to Government services and benefits.

As I will explain in more detail today, we will achieve this objective in a number of ways, chiefly through an improved customer service focus, better targeted communication and the sensible use of new technology.

We will also improve accountability within the Agencies. And we will form partnerships within the public sector and with the private sector to ensure that Government policy intention is carried through in the delivery of programmes.

The Australian social security support system can trace its origins to the early 20th century with the introduction of the Aged and Invalid Pensions. The first maternity allowance soon followed in 1912. We have however come a long way since then as the health and welfare sectors have expanded enormously under successive Governments.

Today my Department of Human Services is the major delivery hub for Australian Government programmes and services. John McDonnel described Human Services in an issue of Quadrant earlier this year as “a major financial institution”. That is a reasonable analogy. Another is that it is effectively “the retail arm of your Government”. We distribute around 10% of Australia’s Gross Domestic Product every year to approximately 20 million people in Australia and more than 50,000 Australians overseas.

This is currently done through the six Agencies:

  • Centrelink
  • The Health Insurance Commission – which includes Medicare and the Pharmaceutical Benefits Scheme
  • CRS Australia (formerly known as The Commonwealth Rehabilitation Service)
  • Australian Hearing
  • Health Services Australia
  • and the Child Support Agency

With 36,000 staff, 850 outlets Australia wide and an annual operating budget of over $3.5 billion, my Department and our six Agencies deliver over 200 different services for 14 Commonwealth and a number of State Government Departments.

Obviously our major stakeholders are our customers.

Almost every Australian is a customer of Human Services and many Australians are multiple customers, obtaining a range of services from the different Agencies.

The support the Australian Government provides through these benefits varies enormously depending on the type of customer and the services they receive. Some services and benefits are means tested, others are not.

For the Health Insurance Commission there is no customer means test on a Medicare rebate. And all Australians gain access to subsidised medicines under the Pharmaceutical Benefits Scheme.

At Centrelink our customers could be a farmer needing urgent drought relief or a mum with a new born baby receiving the non-means tested Maternity Payment.

CRS Australia assists over 41,000 income support clients a year with vocational and occupational rehabilitation services, disability management and injury prevention.

Health Services Australia provides services as varied as travel information for people going overseas through to medical testing of new recruits for the Department of Defence.

And Australian Hearing ensures many Australians have an improved standard of life through the provision of hearing tests and hearing aids. It provides more than 40,000 paediatric services each year and has a significant outreach programme with over 100 visiting services travelling to some of the most remote Aboriginal communities on the continent.

The diversity of our customer base is further illustrated by the Child Support Agency.

The CSA’s primary customers are the 1.1 million children in Australia that are growing up relying on child support payments. These children come from every demographic category in Australia.

And whilst the CSA’s role is to ensure children whose parents separate are financially supported by those parents, it is not an easy task. The more than 700,000 failed relationships on the Agency’s books may require intensive case management. Each case may involve working with a father and a mother and their financial commitments to their children. But it may go beyond that and involve step parents, guardians, defactos, employers and carers. Some of the cases even involve international transactions.

Many Australians would be unaware that 40% of non custodial parents pay only $5 a week to support all of their children. Usually it’s the taxpayer who picks up the bill for the difference between child support and the cost of living.

So with such a diverse customer base there is no simple way for Human Services to deliver the one stop shop – the kind of support our customer base demands and the Government expects.

Therefore we must become agents for change. The first step is engendering in each of the service delivery Agencies the customer first focus.

We want to put the “service” concept back into service delivery. We want our staff to go the extra step in assisting people where they can.

So in practical terms, how will this be achieved?

Firstly, we need to improve our communication with customers.

Some people complain that they don’t understand the services provided by the Australian Government. They know something is out there – they just don’t know what it is or how to access it.

I believe that Human Services has a binding agreement with the Australian people for the continued supply of meaningful information about Government assistance programmes. I intend to ensure that Human Services makes optimum use of the most effective communication channels to ensure that accurate and timely information reaches our customers. As a result of our diverse customer base we need to be smarter in how we communicate.

In the past there has been a tendency for Governments to announce new policy programmes through a high profile marketing campaign and then to leave ongoing communication to discreet messaging through community groups and even the bush telegraph. I am looking to change this with a marketing programme that maintains a year round community profile for programmes provided by the six Agencies.

Beyond marketing, the traditional communication channels remain important. Each working day my Agencies provide 250,000 face to face services and answer 180,000 phone calls in 40 call centres across the country. Of course face to face services will continue to be essential for programme delivery.

Human Services also sends out over 100 million letters each year, that’s 400,000 letters each working day. Common sense would say that is a staggering figure, and a costly exercise. SMS and email represent a more cost effective means of communication with customers. And whilst we do occasionally use these channels, it is uncommon and needs significant expansion.

A choice of communication channels is particularly important given that many of our customers have work and family responsibilities and are time poor. They want fast information and convenient interactions with Government.

We are therefore, examining a range of alternative communication channels for customers that have consumer usability as the basis for development.

Each new channel usually means new technology. I want to make a confession here – when it comes to new technology I am cautious. I would rather learn some lessons at other people’s expense. I recall the opening of Hong Kong’s new Chep Lap Kok airport in 1998. At the time, airport authorities boasted that the baggage handling system was the most advanced in the world. Unfortunately the new technology had some teething difficulties and a reported 10,000 suit cases went missing – a large number of those belonged to journalists. Needless to say the next airport to open chose a more trusted and less ambitious technology.

We are closely analysing the distribution systems that work in other industries across Australia. Traditional customer focussed industries such as retail and financial services initiated the widespread use of multi purpose card technology for us. Swipe cards and web based services have supplemented existing branch and shop front infrastructure. Phone banking is common but has become more of a support tool rather than a product provider.

Putting on my old hat as Financial Services Minister, I think most Australians would accept that banking is easier today than it was 30 years ago. Today, web based banking, EFTPOS and competition in financial product delivery has meant that you can do your major banking at home using a computer or a customer can swipe a card at a shop or at an ATM – anywhere in the world.

However in Human Services we still grind along under an unacceptably high level of paper based communications and face to face interactions. For example 80,000 Australians still drop by a Medicare Office every day to get a cash rebate.

These often time consuming and unnecessary visits could easily be replaced with a more progressive approach to transactions. With that goal in mind we are looking to ramp up the electronic claiming of Medicare benefits. This means that those of you with busy working or family lives will be able to use your Medicare card at the Doctor’s surgery to trigger payment of your Medicare rebate.

Of course some General Practitioners have already taken up this technology through HIC Online. However HIC Online has some operational challenges that must be addressed for it to become more user friendly – for doctors and patients. We will have more to say about this later in the year.

Most Australians have a Medicare card in their wallet or purse. The Medicare smart card initiated by my colleague the Minister for Health Tony Abbott, has received bipartisan political support. The positive feedback from consumers in Tasmania is that they are looking for new ways to access Government services and they want the card to offer access to more products. The creation of Human Services provides us with a unique opportunity to deliver multiple service applications across health and welfare.

I should say at this point that we are mindful of the need to protect the privacy of all customers receiving services from the Government. Privacy concerns will weigh heavily on our thinking as we explore opportunities for the expansion of service delivery.

However, the benefits of these changes are significant for consumers. It means less paperwork and less time visiting Human Services’ offices.

Smart cards are also one mechanism by which we can reduce health and welfare fraud. We have a duty to ensure that this country’s health and welfare systems are used by those who are entitled to use it and no one else! For example, I read with interest the recent story of a person whose Medicare card was stolen and the thief availed themselves of a free kidney operation. That operation was not free – you and I as taxpayers paid for it.

What the smart card represents is one set of keys to open a number of doors to a range of Government services and benefits.

It would appear that both the health and welfare sectors may be assisted through the implementation of this mezzanine technology. I say mezzanine because it is not the end game in service delivery technology. In a perfect world, in 2005 all service delivery would be web based with multiple practical applicators such as hand held web based products and smart phones. Of course in a perfect world everyone would want to use those products too. However we must set realistic goals and smart cards are a reasonable step forward.

Even State Governments agree that it is too big a jump for the entire community to use only web based services. I note that a number of State Governments are considering the implementation of smart cards for public transport and other state services. There are compelling reasons for us to ensure common standards for this technology. This will hopefully prevent us from winding up with a new technology repeat of the mixed rail gauges debacle of the 1800s.

Australia is not the only country exploring smart card technology. In fact we lag behind many others. Three weeks ago it was reported that the German Government is considering a smart card for the health insurance and social services sectors. Many states in the United States are in a similar position. They follow the lead of many European and Asian Governments who have already introduced smart card service delivery.

In setting realistic goals I acknowledge a multiple purpose card has merit but represents a significant challenge for our back end infrastructure.

Even though consumers currently prefer card based technology we cannot neglect the development of other service delivery channels including a significant expansion of web based services.

Already over 500,000 Australians have registered to use Centrelink services online. They can check the timeliness of their payments, note when the next payment is due and customers can update some of their personal information. The Centrelink site is now receiving 3.3 million page hits per month but given that they deal with 1.3 million customers a week it remains a very small part of their business and it still has a long way to go.

This is simple customer communication through direction interaction. Based on projections, there will be growth over the next twelve months in the use of online services. This will result in a reduction of nearly 5 million letters over the next financial year.

More importantly we will also be able to save customers’ time.

In the very near future, students applying for Austudy or Youth Allowance can do so online. This means that for the 370,000 students who receive this payment each year they may never have to visit a Centrelink office. Updates can be delivered online or by phone. Of course this reduces Centrelink queues and frees up staff for more intensive case management work.

We do however want to go further and back end partnerships can also deliver front end benefits. For example, we are trialling a project that links universities with Centrelink. Currently if students change their courses they must hand deliver or send to Centrelink their university “change of course” information. That’s paperwork for the student, paperwork for the university and paperwork for Centrelink. Through this new partnership we can regularly update a student’s course load with the Centrelink mainframe. This automatically delivers students the correct rate of Austudy payments. It’s easier for the student, they are less likely to incur a debt, and it takes the pressure off call centres and customer service centres through alternate means of updating customer information.

Web based back end solutions can deliver real and obvious benefits. Of course the success of new technology depends on the simplicity of the web based programmes and a customer’s willingness to use this technology.

Young Australians are generally more comfortable with web based services. But some web based services may be popular across the entire age spectrum. In this regard the most obvious benefits of online services can be delivered through Medicare.

Since mid 2004 Australian families could register online for the Medicare Safety Net. In the last three weeks we have extended this service so that customers can regularly check their Medicare Safety Net balance online. We will be extending this service to the PBS Safety Net. We also expect to deliver full online services for organ donor status and child immunisation history in the near future. This will be of significant assistance to families.

Of course none of the anticipated improvements in service delivery will occur if the technology doesn’t live up to expectations.

Therefore we will be focusing intently on how well each of the six Agencies is managing their major IT projects. The Auditor-General’s report released last week into the failed EDGE project in Centrelink indicates an urgent need for increased and more careful management attention to major projects. I expect constant vigilance and clear governance structures.

There is a need to change the old fashioned expectation in the public sector that pumping in more money will fix projects that are behind schedule or poorly managed. My experience in the private sector is that projects that fail are canned and relevant management are held responsible for failure to deliver. I will be taking the same position with major public sector projects in Human Services.

Moreover new technology will only be rolled out when it is able to deliver the benefits customers expect.

One of the key reasons the Department of Human Services was established was to improve the level of accountability of the Agencies both to the Australian Government and to the customers they serve – that is, the Australian people.

An obvious first step in improving accountability is to address the governance structures of the organisations.

The existing Boards had an important governance role when Agencies were part of a sectoral portfolio such as Health and Ageing or Family and Community Services. However, with the new administrative arrangements, the Government is keen to have a more direct ministerial role in the running of these Agencies.

I can announce today that I will be introducing legislation in the winter sitting of Parliament to make the necessary changes to bring the Health Insurance Commission and Centrelink closer to Government by recreating them as statutory Agencies.

Under this structure the heads of these Agencies will now report directly to me through the Secretary of the Department of Human Services. They will no longer be accountable to Boards.

The existing boards of the Health Insurance Commission and Centrelink will be dissolved.

I want to take this opportunity to thank the current and former members of these Boards for their excellent service to government over the last 8 years for Centrelink, and over the last 30 years for the Health Insurance Commission.

Some of these Board members are here today and I would particularly like to thank the current chairs Elisabeth Montano and Peter Bunting for their outstanding service. The Boards have served a very useful role when Ministers had Agencies within their policy portfolios. However with the creation of Human Services comes direct accountability to a Minister. This was the clear recommendation of the Uhrig Report which the Prime Minister endorsed when he announced the creation of the Department of Human Services in October of last year.

Quite obviously, a further outcome of these initiatives is that the Health Insurance Commission will no longer be a commission. As a statutory agency it will have the same role but a different name. Commonsense says rename it and we will. From the date of statutory agency approval the Health Insurance Commission will be renamed “Medicare Australia”.

This name reflects what almost every Australian recognises– that Medicare is the way in which the Government supports them with their health services. It is one of the strongest brands in Australia and it reinforces the Howard Government’s strong support of Medicare.

Following these changes a number of stakeholders will want a more formal process for consultation with Human Services. I intend to engage with all parties on the most appropriate mechanisms for consultation going forward.

To address points made by some media commentators, the role of the Department of Human Services is not to duplicate the administration of the Agencies. Its role is to co-ordinate the Agencies, liaise with key stakeholders and, importantly, it is accountable for providing input into policy development that will hopefully ensure we don’t end up with well-intentioned Government policy that is difficult to deliver.

The largest of our 14 Australian Government clients is the Department of Employment and Workplace Relations. This is followed by the Department of Family and Community Services, the Department of Health and Ageing and then the Department of Education, Science and Training and others. We already have a clear line of communication with policy Ministers and their Departments.

This cooperation is already evident in Human Services’ timely delivery of a range of 2004 election commitments. These include measures such as:

Improved Access to Child Care Benefit for Grandparents.

The Seniors Concession Allowance and Utilities Allowance where nearly 300,000 self-funded retirees and all Aged Pensioners have received their first instalment of their annual payment to assist with utilities and maintenance costs.

We have also delivered the new 100% Medicare Rebate for some GP Services. As a result of this 300,000 Australians each day are benefiting from higher Medicare rebates

In addition we have delivered ahead of schedule the $300 increase in Family Tax Benefit (part B).

Remaining election commitments on track for implementation include the 30% Child Care Rebate and the extension of the Youth Allowance, AUSTUDY and ABSTUDY Payment to New Apprentices.

At this point I wish to thank the many outstanding staff working in all of my Agencies. From the front end staff visiting the Tiwi Islands to our tech heads here in Canberra, the dedication and energy of the Human Services team is something I am very proud of.

If anyone needs proof of that commitment then it was best displayed during the Asian Tsunami Crisis over January. Across the country my agency staff worked around the clock to help others in need. And they do that every day of the week.

Perhaps my most significant challenge is to ensure my Agencies continue to deliver the already long list of existing Government programmes whilst undertaking the changes necessary to achieve our goals.

When taking a customer perspective one of the key challenges we face is the complexity and range of services we deliver. As I have already mentioned, the Human Services’ Agencies are responsible for delivering over 200 different services.

By bringing these Agencies under the one umbrella of Human Services, we have the opportunity for the first time, to review how they operate from a customer perspective. We must repeatedly ask whether the original policy intention is carried through in the delivery of the programme.

From early 2006 we will assess how well existing policies are travelling and what can be done to improve the delivery of the policy. Given the large number of initiatives we deliver this review programme will be a long and extensive process.

Our 20 million customers have little regard for sectoral and bureaucratic differences. Instead they just expect the Government to deliver services in a timely, efficient, cost effective and easily understandable manner.

We will be looking outside existing agency boundaries if there is a service that can be provided to us in a cheaper and more efficient manner by the private sector.

We are already making progress in this area. You can currently drop off your forms for the Family Tax Benefit at a Medicare office. This is an outcome of the Family Assistance Office initiative which was introduced with the New Tax System in 2000. What is changing is that we have begun training Medicare office staff to use Centrelink IT systems so that you can obtain the full level of family assistance services at your local Medicare office. This improves service delivery to families who will be able to enquire about and claim family assistance benefits in the 238 Medicare offices around Australia as well as the larger network of Centrelink offices.

These internal partnerships can deliver new outcomes for customers.

There are other examples of this new partnership at work. When a new baby is born mothers will be given better information on how to claim the full range of services offered by the Australian Government. These services include the maternity payment of over $3,000, information on the Family Tax Benefit, Medicare enrolment forms, childhood immunisation details, child care benefit details and information about obtaining child support. It makes access to services simpler and easier – even though there are still too many forms to fill out!

The new arrangements also provide us with an opportunity to pool resources for specialised services. For example, Centrelink and the HIC have found new synergies in the delivery of services to Indigenous communities. Remote communities are regularly visited by Centrelink staff. In future, these visits will also provide access to Medicare services. This can be as simple as putting staff from the two Agencies in the same four wheel drive rather than sending them separately. The service will be extended across all of my Agencies. This improves service and saves money.

We must also extend services across Government. For example by extending the already strong relationship between Centrelink and the Australian Taxation Office the Government can now automatically include welfare payment details in tax returns. This is a voluntary initiative that can save families time and significant inconvenience. This will complement the successful HIC trial where taxpayer’s Medicare financial histories were used to provide details for the Medical Expenses Tax Rebate.

I have asked my Agencies to work together and identify other programme initiatives that improve customer service and free up resources for those services most in need.

The new Department has also been tasked to ensure that the Agencies become more efficient. An efficient organisation looks to utilise synergies and streamline processes to increase productivity and reduce operating costs.

Efficient organisations are professional, well organised, have excellent management control, are able to remedy problems quickly and are responsive to customer and stakeholder concerns.

There needs to be greater focus on cost effectiveness too.

We can achieve efficiencies in our travel, property, banking, legal services, communications and mailout budgets. After all, my Agencies are big consumers in these areas and they can drive good deals in the market place with their buying power.

I want the Agencies to collaborate in their purchasing efforts – Government spends $3.5 billion running the DHS Agencies each year and we need to find synergies in purchasing to produce better outcomes for less money.

We are already pursuing a number of opportunities in procurement and in service delivery that will reduce the cost to the taxpayer. For example an early indication of the capacity of this is the recent decision by Australian Hearing to team up with CRS Australia to achieve considerable savings in its upgrade and purchasing of laptops, PCs and flat screens for its 78 hearing centres Australia wide. The taxpayers saved more than a quarter of a million dollars on this contract alone.

One area where my Department will have an important role to play is in the delivery of the Government’s policy for encouraging people to move from welfare into work.

The 2002 Inter-Generational report states quite clearly that we must lift Australia’s labour force participation rate if the tax burden is not to rise unacceptably over the next 30 years as our population ages.

Immigration will not of itself deliver this result. If we sought to keep the current age dependency ratio through to 2044, the Productivity Commission estimates that we would need net immigration each year, five times higher than current levels.

So in our search for more workers we have to focus on those of working age who are currently out of the workforce and are receiving benefits, this is a pool of around 2.7 million Australians. Naturally not all of these people are work ready but we will address their barriers to employment within a compassionate and tolerant framework.

The Government recognises that there are those who are permanently unable to work at award wages. They will obviously continue to have access to pensions, such as the Disability Support Pension. Fear campaigns by our political opponents will not succeed because Australians know that positive reform is necessary, in fact, it is long overdue. Human Services will have a major role to play in assessing and supporting individuals who seek to either re-enter the workforce or are entering the workforce for the first time.

This is more than labour resources and economics. It’s about people, it’s about self esteem and it’s about families.

Time and again we see that those most likely to go back into the workforce are those who most recently have come out of the workforce.

Since December in partnership with the Minister for Workforce Participation Peter Dutton, I asked Centrelink to proactively improve the rate of referrals of people already on parenting Payments to the Job Network.

So far we have than tripled the number of voluntary referrals for clients such as those receiving Parenting Payment up from around 4,000 a month in October 2004 to 12,000 for March 2005.

What is interesting about this data is that preliminary information indicates that around 35% of single parents are already working and are receiving the Single Parent Payment as well. This puts to bed the argument that somehow the Government would be breaking new ground by asking single parents to work a few hours each week.

One of the more pleasing outcomes of these results is that so many of the parents contacted by Centrelink have been willing to undertake part time work. In fact many parents do! Moreover some parents were not aware that they could use the Job Network service. Others just needed the extra encouragement to take the first step.

In conclusion, I must reassure you that I am very mindful of the enormity of the task before us in Human Services.

Given that the Prime Minister has just visited China I feel a little more comfortable quoting that famous Chinese proverb that a journey of a thousand miles begins with a single step. I am also mindful of Mao Tse Tung’s warning that “passivity is fatal to us”.

With that in mind we have begun the Human Services reform agenda with many small steps.

It will be a partnership with staff, other Agencies and the private sector.

Distributing $82 billion a year is no easy task. Making sure it goes to those most deserving is even more challenging.

But we are treating every dollar as if it were our own. We are treating every customer as if it were ourselves.

In the end outcomes matter, and for $2600 every second, Australians expect us to make their lives easier.

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Malcolm Farnsworth
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