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Community Affairs Legislation Committee
Australian Hearing

Australian Hearing


CHAIR: I welcome Senator Payne, the Minister for Human Services, and officers of the Department of Human Services and Australian Hearing. Minister, do you wish to make an opening statement?

Senator Payne: Good morning, Chair. No, thank you very much.

CHAIR: We will move straight to questions.

Senator CAMERON: Mr Davidson, welcome. Is Australian Hearing still meeting all of its KPIs?

Mr Davidson : Yes.

Senator CAMERON: You are still operating at no cost to government?

Mr Davidson : Absolutely.

Senator CAMERON: I see competition seems to be heating up in the hearing area. I came across some ads for companies setting up and trying to entice people to go to the private sector. How are you dealing with that?

Mr Davidson : It is a constant issue for any sort of competitive market. The main issue for us at present tends not to be new entrants; it tends to be people who are already in the wellness or the health sector who are deciding to add hearing services onto their suite of customer services. We offset that by continuing to give absolutely the highest standards of service at the best rates, we believe.

Senator CAMERON: In terms of your service, you still have a very widespread service. Have you closed any of your service centres around the country?

Mr Davidson : We have closed no permanent centres. We have increased the number of visiting centres but have closed a couple of small ones where the requirement was minimal and we had another centre close enough so that access for the clients was still pretty reasonable.

Senator CAMERON: As part of the health committee I visited Elcho Island. How do you deal with a remote community like Elcho Island?

Mr Davidson : I will ask my colleague to respond to that.

Ms Scanlan : We organise visits to the community a number of times a year, usually between three and four. The audiologists go there and deliver clinical services after consultation with the community to determine what the needs of the community are.

Senator CAMERON: I suppose there are still particular problems in Indigenous communities in terms of hearing?

Ms Scanlan : There are issues with hearing, and that is why we go into those communities and try to target our services and discuss with communities their needs before we go, so that we can address the hearing concerns around Australia.

Senator CAMERON: Mr Davidson, in terms of the scoping study, have you had further discussions about the scoping study and the proposed privatisation?

Mr Davidson : No, Senator. We have only been informed as to the deferral of the decision, subject to further consultation with some stakeholders.

Senator CAMERON: Have you been consulted as part of that consultation?

Mr Davidson : We have not as yet been consulted. We have been informed of the process.

Senator CAMERON: Who informed you about the process and when was that?

Mr Davidson : The Office of Hearing Services. It was last week, during a regular quarterly meeting. It became part of an agenda item.

Senator CAMERON: So it was last week sometime?

Mr Davidson : Yes, on Wednesday or Thursday.

Senator CAMERON: What was the advice you received?

Mr Davidson : The advice was that during July a series of information sessions would be run in three centres, and for the next two or three months they would then be having consultation sessions with all of the stakeholders that had been previously identified during the scoping study. As yet we do not know who those stakeholders are.

Senator CAMERON: The Office of Hearing Services will be doing this?

Mr Davidson : I think in conjunction with Finance.

Senator CAMERON: Have you had any discussion with DHS in relation to any of the issues?

Mr Davidson : No, none at all.

Senator CAMERON: Minister, are you aware of the fears and concerns that some of the clients and customers of Australian Hearing are indicating about the uncertainty?

Senator Payne: I am aware that members of the community who are customers of Australian Hearing have, along the way of the discussion through the scoping study period, certainly raised concerns. Some of their representative organisations have had an opportunity to participate in that. What the government has indicated by Minister Cormann's announcement just before the budget is that we intend to carry out further consultations with the hearing community, most particularly in relation to the engagement with and implications of the NDIS for government funded hearing services.

As you would be aware, under the previous government, when the NDIS was mooted and established, it was to be completely contestable. So hearing services fall into a slightly mixed environment in that regard because of the way Australian Hearing operates and the operation of the private sector. It has become apparent to us through the scoping study and through other feedback from stakeholders that the NDIS establishment and rollout is something that we will have to consider in this process. So I think it is a constructive initiative from the Minister for Finance and one that I welcomed.

Senator CAMERON: In relation to this further consultation, what role will DHS play?

Senator Payne: Further consultation is directed by the Department of Finance, and we will cooperate completely with them in that regard through me and the secretary, and officers of the department as required.

Senator CAMERON: I think Minister Cormann's announcement was on 8 May?

Senator Payne: Yes.

Senator CAMERON: There were no discussions with DHS or you, Minister?

Senator Payne: Not at this stage. In the post-budget environment, obviously, we are preparing for this process of estimates and we will move from there.

Senator CAMERON: When was the scoping study completed?

Mr Hutson : The scoping study has not really been completed because we are now in the process of having further consultations prior to having it completed. That is being run by the Department of Finance, in conjunction with the Department of Social Services.

Senator CAMERON: That is not consistent with what Minister Cormann said. He opens by saying:

The Government will carry out further consultations with the hearing community about the findings of the scoping study …

Are you telling me that the minister has got it wrong?

Mr Hutson : No, of course not, Senator. They are having further consultations about the scoping study prior to making any decisions. The minister's press release says that in the first sentence.

Senator CAMERON: 'About the findings of the scoping study'.

Ms Deininger : The Department of Finance has been leading the work in relation to the scoping study and has been working to develop the findings. In terms of where those are up to, I think that is really a matter for the Department of Finance. Certainly, as the press release says, there will be future discussions and consultations before the government makes a decision.

Senator CAMERON: Minister or secretary, have you seen the findings of the scoping study?

Senator Payne: The way in which we are looking at this at the moment is that, having had the work of the scoping study done, by Freehills and PwC, having had that examined within Finance and to some degree looked at by Human Services and by meI have certainly seen itthe issue is around the process of implementation of the NDIS, its complete rollout across Australia, and the role of hearing services in thatnot just in relation to Australian Hearing but generally speaking. Not everybody who is a participant in the NDIS is going to be a client of Australian Hearing, obviously. I think this is a very sensible decision. This is something that it is smart to do, to engage further so that we get a better appreciation of what engagement the clients are going to have in the NDIS process and what the needs will be on this side of the table.

Senator CAMERON: Nobody is arguing that point. It is just that Mr Hutson said the scoping study had not been completed, yet Minister Cormann is talking about the findings.

Mr Hutson : In providing that answer I was talking about the totality of the process rather than the explicit scoping study.

Senator CAMERON: No, I did not ask you about the totality of the process; I asked you about the scoping study.

Mr Hutson : My mistake, Senator.

Senator SIEWERT: How can you talk about 'further consultation on the findings', which is what the release says, if the people you are consulting have not seen the findings?

Senator Payne: The process is an iterative one. It is not one that is put in a small box, left there and finished. This is an ongoing process for government at the moment.

Senator SIEWERT: Yes, I understand that. But it explicitly says that there will be 'consultation on the findings'. I understand you want that so that you can then get more information on which to make a decision, but how can people give you adequate feedback on where the scoping study has got to on the findings if you are not giving them the findings?

Senator Payne: Probably those sorts of questions, frankly, should go to Finance. We did not run the scoping study. We participated in the scoping study but we did not run the scoping study. So the process itself is a matter for Finance.

Senator CAMERON: But we are entitled to ask questions about the scoping study.

Senator Payne: Absolutely. I am not saying that you are not.

Senator CAMERON: What were the findings of the scoping study?

Senator Payne: Senator, I am not going to go into the findings of the scoping study here. It is not my scoping study and it has not been released.

Senator SIEWERT: But you have seen it.

Senator Payne: I have seen it, yes.

Senator CAMERON: How then can DHS make a proper assessment of what is happening with this, certainly in the context of DHS and its involvement with Human Services, if you will not talk about it?

Senator Payne: Because it is a continuing process; it is not a secret. There are stakeholder policy implications.

Senator CAMERON: But it is a secretthe findings. You will not talk about the findings.

Senator Payne: If you would like to be part of the stakeholder consultation, I am sure that I can persuade Minister Cormann, if you are very nice on that particular day, to include you. That might narrow the field, of course.

Senator CAMERON: I am always nice, so you do not have to put that qualification; that is just a given.

Senator Payne: That is an interesting observation.

Senator SIEWERT: Let us not debate that.

Senator Payne: How long do we have, Rachel?

Senator CAMERON: Rachel, don't you buy in.

CHAIR: You are being nice so far, Senator Cameron.

Senator CAMERON: So it is not a secret, but you will not tell us about it. What does that make it?

Senator Payne: As I have said, it is part of a process

Senator CAMERON: It does not matter if it is a part of a process.

Senator Payne: and the release or otherwise of any of that detail is a matter for the Minister for Finance. Did you ask any questions in Finance about it?

Senator CAMERON: I am here to ask you the questions.

Senator Payne: No, you did not.

Senator SIEWERT: Are you aware of whether there will be an overview or a summary document provided to enable or to facilitate the consultation process?

Senator Payne: I am not as yet, but I can certainly put that to the minister as a suggestion.

Senator SIEWERT: All right.

Senator CAMERON: I agree with Senator Siewert: how can you consult if people do not have an opportunity

Senator Payne: I have just agreed with Senator Siewert's suggestion; I will put it to the minister.

Senator CAMERON: So you will put it to the minister or you will recommend to the minister? How about a recommendation that it be released?

Senator Payne: How about I put it to the minister?

Senator CAMERON: How about you recommend it?

Senator Payne: I have said that I will put it to the minister.

Senator CAMERON: What does that mean?

Senator Payne: It means that I will put it to Senator Cormann

Senator CAMERON: Put what?

Senator Payne: the Minister for Finance.

Senator CAMERON: What will you put?

Senator Payne: The suggestion that Senator Siewert made about the provision of an overview to facilitate further consultation.

Senator CAMERON: How about you go a step further? How about you recommend to the minister that the scoping study does not become secret, as you have indicatedyou have said that it is not secretand how about your recommending that it gets released?

Senator Payne: I will have my own discussions with the Minister for Finance.

Senator CAMERON: So you have been briefed on the study, have you?

Senator Payne: Yes.

Senator CAMERON: Who briefed you?

Senator Payne: Representatives of the Department of Finance and representatives of the scoping study parties.

Senator CAMERON: That was, what, Freehills and PwC?

Senator Payne: Just PwC, from memory.

Senator CAMERON: When was that?

Senator Payne: I do not recall the exact date, but I will check.

Senator CAMERON: Was it weeks ago?

Senator Payne: No. It was more than weeks ago, but I will check.

Senator CAMERON: So some time.

Senator Payne: Yes. I will check.

Senator CAMERON: So the findings have been available for some time, have they?

Senator Payne: I have said that I will check. I am not sure of the date of that consultation.

Senator CAMERON: But I am asking you: you were briefed on

Senator Payne: For a period of time, yes.

Senator CAMERON: For a period of time; thank you. Who is carrying out the further consultations?

Senator Payne: Finance and the scoping study operators.

Senator CAMERON: PwC?

Senator Payne: Yes, to the best of my knowledge.

Senator CAMERON: So you do not have any details about how that is going to be conducted?

Senator Payne: Not available here, no.

Senator CAMERON: Is there a terms of reference?

Senator Payne: No.

Senator CAMERON: So it is just further consultation

Senator Payne: I think I would take it as an extension of consultation from the previous scoping study, but any of the detail of this goes to Finance.

Senator CAMERON: It can go to Finance but, as it relates to DHS, it can be questioned here.

Senator Payne: Certainly. I am just telling you that I do not have the detail that you are looking for and that is a matter for the Department of Finance.

Senator CAMERON: You have said that it is not a secret. Can you just explain how it is not a secret if nobody can talk about it?

Senator Payne: I know that you would like to build another grand conspiracy, but unfortunately I am not going to be able to assist you with that today.

Senator CAMERON: I am not looking for a conspiracy; I am just looking for information.

Senator Payne: And I have said that, with regard to the detail of the study itself, which is in the purview of the Department of Finance, that is where you need to ask for that detail.

Senator CAMERON: What will DHS's role be in the consultations? Will you be one of the groups consulted, or will you be participating as part of the scoping study group?

Senator Payne: I am happy for Mr Hutson or Ms Deininger to answer that.

Mr Hutson : The consultation is not the responsibility of the Department of Human Services. I expect that we will be kept informed as they progress, but they are not something that we are actively a part of.

Senator CAMERON: Will there be any role for Australian Hearing services in that?

Ms Deininger : We expect that Australian Hearing might be consulted in that process. The consultations are being led by the Department of Social Services and the Department of Health and, as has been canvassed, they will establish the consultation arrangements in consultation with Finance.

Senator CAMERON: So you were consulted; DHS were consulted by the scoping study group?

Mr Hutson : Yes.

Senator CAMERON: What issues did you raise with the scoping study group in terms of the proposed privatisation?

Mr Hutson : The issues which we would have discussed with the Department of Finance's consultants would have been fairly wide-ranging in terms of considering all of the issues accommodated by the terms of reference, in broad terms. In particular, there are responsibilities that we have in terms of the legislation and responsibilities in terms of our advice to the minister concerning Australian Hearing.

Senator CAMERON: What were those wide-ranging issues that you

Mr Hutson : I am afraid that I do not have that detail with me to be able to give you a breakdown.

Senator CAMERON: Who from the department sat down with the scoping study group?

Mr Hutson : That would have been Ms Deininger and her staff.

Senator CAMERON: Ms Deininger, you were there. What wide-ranging issues did you discuss, in broad terms?

Ms Deininger : I do not have the information to hand. We had the opportunity to have some discussions in relation to the scoping study.

Senator CAMERON: So you cannot remember, or you are not going to tell us what is happening?

Ms Deininger : There was some information in the scoping study that there was potentially some factual information about Australian Hearing and the services it offers and how the Community Service Obligation and the Australian Government Hearing Services programs operate. As I recall, we provided some comments to ensure that that information was factually correct and accurate.

Senator CAMERON: When did you meet with the scoping study?

Ms Deininger : The scoping study has been ongoing for some time. There have been some committee meetings. I would have to take it on notice to alert you to the specific committee meeting times.

Senator CAMERON: When you say that there were committee meetings, what do you mean by a 'committee meeting'? Do you mean that this was a committee of people from DHS or that the whole meeting was called a committee meeting? What is the committee?

Ms Deininger : There was a committee that Finance chaired and that involved us and others who have an interest in the scoping study. They met on a few occasions. As I say, I would have to take on notice the exact dates of that.

Senator CAMERON: Sure.

Ms Deininger : But, as has previously been indicated, PwC and the legal advisers were those who took the lead, with Finance, on the drafting of the scoping study.

Senator CAMERON: So PwC and the legal advisers. Weren't PwC the lead adviser?

Ms Deininger : There were also some legal advisers. I just cannot recall.

Senator CAMERON: So they took the lead; is that what you are saying?

Ms Deininger : With Finance. It is a Finance responsibility.

Senator CAMERON: What was this committee called? It was just 'the committee', was it?

Ms Deininger : I am happy to take that on notice. It might have been called a steering committee or something like that.

Senator CAMERON: So there was the establishment of a committee that you were part of and you represented DHS on that committee.

Ms Deininger : That is right.

Senator CAMERON: You only ever gave factual information. Your total input to that committee was providing factual information?

Ms Deininger : As I have said, we had the opportunity to provide that factual information and make sure that the information that was in the scoping study about the various programs was accurate. I would have to take on notice what other information we might have provided.

Senator CAMERON: Why would you need to take on notice what your input was?

Ms Deininger : In terms of the specifics.

Senator CAMERON: How many meetings did you attend?

Ms Deininger : I am relatively new to the role. I believe that I attended one meeting, but there were meetings previously.

Senator CAMERON: Who was responsible for it previous to your involvement?

Mr Hutson : Prior to Ms Deininger's commencement at the Department of Human Services, other people in that role or who were in her position would have been responsible for it.

Senator CAMERON: How about saving me the problem of asking who that was?

Mr Hutson : I am just trying to recall. I think that was Ms Bird.

Senator CAMERON: Is she here?

Ms Campbell : No, I do not think Ms Bird is here today. She is in another role and we did not bring her to the estimates.

Senator CAMERON: That is understandable. Ms Deininger, before Ms Bird moved on, did you receive a briefing from her on the issues?

Ms Deininger : As part of my induction, I received a background briefing on the range of issues that are covered in my division.

Senator CAMERON: From Ms Bird?

Ms Deininger : From the relevant staff in the area as well; some of it was written and some of it was oral.

Senator CAMERON: You have said 'as well', so that is an affirmative that you did meet with Ms Bird.

Ms Deininger : Yes, I have spoken to her. I cannot remember exactly the conversation with Ms Bird. My division covers a range of issues.

Senator CAMERON: The question I have askedand I am still not clearis that you did speak to her about the issues raised through her involvement and the department's involvement in the scoping study? Did you get a briefing on that?

Ms Deininger : I was briefed in relation to our role in the scoping study. I cannot recall whether it was Ms Bird or a more junior staff member, but I was given information about the scoping study and the fact that it was ongoing.

Senator CAMERON: So you cannot remember if the officer that you took over the responsibility from briefed you. Seriously?

Mr Hutson : I do not think that was Ms Deininger's evidence. Her evidence was with respect to the specifics. She actually said that she did receive a briefing from Ms Bird and she also received a briefing from junior officers, as would normally be the case when you take over a new role.

Senator CAMERON: I do not think it was as clear as that. But, if that is your evidence on behalf of Ms  Deininger, you should indicate that you are now speaking for her on this.

Mr Hutson : No. I am just giving you a general proposition as I understand it.

Senator CAMERON: No. What you are doing is giving me your opinion as to what she said.

Ms Deininger : I can confirm that I received a briefing from Ms Bird and from other staff in the area.

Senator CAMERON: That was easy, wasn't it?

Ms Deininger : Yes. I apologise if I

Senator CAMERON: No, you do not need to apologise. I am not looking for an apology. Were there any written briefs from Ms Bird?

Ms Deininger : I received written information about the role of the division and the responsibilities. I could not tell you that it was drafted by Ms Bird or other particular

Senator CAMERON: Yes, I am making it difficult. This was a simple question: did you get a written briefing from Ms Bird about the scoping study?

Ms Deininger : As you might appreciate, when you take on a new role, you receive a range of information, both verbal and written, and it is not always clear to say that this particular piece of information was drafted by this particular person or that particular person.

Senator CAMERON: Let us try again. Did you receive a written brief on the scoping study?

Ms Deininger : I think I would have received some written briefing in relation to the scoping study and where it was up to; I believe so, yes.

Senator CAMERON: You believe so; you are not sure?

Ms Deininger : Yes.

Senator CAMERON: Do you want to take it on notice?

Ms Deininger : I will take it on notice and confirm.

Senator CAMERON: You took the role over with this written briefyou are not sure who it came from. When did you take the role over?

Ms Deininger : In early December.

Senator CAMERON: How many meetings had DHS had with the scoping study people prior to your taking over? Would that be in your brief?

Mr Hutson : We will have to take that on notice.

Senator CAMERON: So you have had one meeting with the scoping study?

Ms Deininger : I believe so.

Senator CAMERON: That is since December. So in six months there has been one meeting.

Ms Deininger : That is a meeting of the steering committee, yes.

Senator CAMERON: Was there informal engagement with the steering committee other than through the committee process?

Mr Hutson : In addition to the formal meetings of the steering committee, there would have been a wide range of continuing consultations between officers of the Department of Human Services and officers of the Department of Finance. Some of those meetings would have, indeed, been informal.

Senator CAMERON: When you say, 'there would have been'

Mr Hutson : There would have been, yes.

Senator CAMERON: What does 'would have been' mean? Were there meetings?

Mr Hutson : Yes.

Senator CAMERON: That is an easier form of words than 'there would have been'. So there were meetings.

Mr Hutson : There would have been conversations and meetings, yes.

Senator CAMERON: Are there file notes in relation to those conversations and meetings?

Mr Hutson : I expect that there would be some notes on those meetings, yes.

Senator CAMERON: Can you provide the file notes and the details of the meetingsthat is, these informal meetingsthat took place?

Mr Hutson : We will search the file and see what we have. We will take it on notice.

Senator CAMERON: Thanks. Have you, Ms Deininger, come to a view about what DHS's and Australian Hearing's position should be in relation to the engagement with the NDIS?

Ms Campbell : With respect to the NDIA, that is a matter for the Department of Social Services. It has been clear that further consultation will be carried out with those entities. The Department of Human Services does not have a policy role in this respect and so it is a matter for social services and the health department from the hearing perspective, and they are the policy owners.

Senator CAMERON: But you have delivery responsibilities, haven't you?

Ms Campbell : Australian Hearing has delivery responsibilities, but these are policy issues that the government is considering. So we are providing input into these matters, but the policy rests with those two departments.

Senator CAMERON: Mr Davidson, have you had any

CHAIR: Senator Cameron, I am sorry to interrupt. I am conscious of the time, and Senator Siewert is waiting. So I might get you to wrap up this line of questioning and I will give Senator Siewert a go.

Senator CAMERON: I may have to come back to this line of questioning, but I am happy to wrap up and come back to it, if I need toif that is okay with you.

CHAIR: All right.

Senator CAMERON: Mr Davidson, have you had any informal discussions and meetings with the scoping study group?

Mr Davidson : Not since last year.

Senator CAMERON: So they were in December or November last year?

Mr Davidson : I think November, but I can certainly take that on notice.

Senator CAMERON: So no discussions for six months?

Mr Davidson : No.

Senator CAMERON: Thank you, Chair.

CHAIR: Senator Siewert.

Senator SIEWERT: Mr Davidson, I want to go back to how much of the scoping study you have actually seen and clarify that.

Mr Davidson : We have only seen what is in the public arena; nothing else.

Senator SIEWERT: So you have not seen a copy of the scoping study that affects your future?

Mr Davidson : In terms of the findings?

Senator SIEWERT: Yes.

Mr Davidson : We saw the terms of reference, but the outcomes?no, nothing at all.

Senator SIEWERT: Have you asked to see them?

Mr Davidson : No, not really. I think that is a matter for government at the right time to share whatever information they wish with us.

Senator SIEWERT: In terms of the ongoing consultation process that we have been talking about, has it been made clear to you how you will be involved in the ongoing consultation process?

Mr Davidson : Not as yet. Having been party to the original consultation, we do expect that we will be part of the subsequent consultation, but we have had no detail on that.

Senator SIEWERT: In regard to the briefing process you have already been engaged with in terms of the most recent meeting, can you give us a bit of detail on what was expected of the outcomes from that process?

Mr Davidson : It was purely information and an outline to us of the next steps in the process. So it was factual information about the timing and the fact that it was covering previous stakeholders, with a view to understanding the possible impact of the implementation of the NDIS on hearing services.

Senator SIEWERT: Has your understanding of that possible impact changed since we talked about this at the last estimates hearings?

Mr Davidson : No, because we do not have any clarity on the processes that NDIS will impose when the whole industry becomes contestable.

Senator SIEWERT: So you have not spoken to the Department of Social Services further or to NDIA?

Mr Davidson : We have had one meeting with NDIA to indicate that we are more than happy to be part of any discovery process they have in terms of getting the best outcomes for our clients.

Senator SIEWERT: What is your understanding about where they are up to with such a discovery process?

Mr Davidson : They have established an expert committee regarding early intervention. I may throw to Emma Scanlan again because Emma is on that committee.

Ms Scanlan : The two principal audiologists from Australian Hearing are on the early intervention committee. We have so far had one meeting, which was on 31 March, to discuss the terms of reference; there were no actual findings from that meeting. I expect that we will continue to meet as a group to talk through the different aspects of the early intervention and how we can bring any expertise from Australian Hearing to that discussion.

Senator SIEWERT: So that was two months ago?

Ms Scanlan : Yes.

Senator SIEWERT: Is another meeting scheduled?

Ms Scanlan : Not as far as I am aware.

Senator SIEWERT: So it is not such early intervention. I presume that I should ask the NDIA for the terms of reference for that committee.

Ms Scanlan : Yes.

Senator SIEWERT: What is your understanding of the role that committee is to play in terms of discussing the ongoing findings of the scoping study, given that is the issue around NDIS that is explicitly referred to?

Mr Davidson : We do not really know, but I would think this expert advisory committee is purely there to make sure that any hearing issues that currently exist can be captured in any future service delivery model, and I do not think that committee will be part of the scoping study discussions. But I am not aware.

Senator SIEWERT: So you are saying that there is a committee that NDIA has that is looking at early intervention for hearingobviously, looking at that is a good thingbut you do not think that will have any role in the discussion about ongoing consultation with the scoping study, even though it is said that part of the explicit work that will be involved in that ongoing consultation is around interaction with the NDIS.

Mr Davidson : I really cannot answer because I do not know what the NDIA, NDIS or DSS decision will be about that committee. Just giving you my personal opinion, I think it is an advisory committee with regard to service delivery and possibly not anything else.

Senator SIEWERT: Mind you, I would have thought that was still pretty important.

Mr Davidson : Yes.

Senator SIEWERT: I want to go back to the issue around the meeting that you had. Was that to update the information on what the next steps are and will you just be included as another stakeholder?

Mr Davidson : Again we are not sure how they are going to run the stakeholder engagement; we have not been advised of that. All we have been advised of is the process and we have no detail on that process. But I would hope that we would be part of that subsequent consultation.

Senator SIEWERT: How long did the meeting go for?

Mr Davidson : It was just one session on a quarterly meeting regarding a large amount of other stuff; it was just an agenda item at the end. It was for our information; we had no real discussion on it.

Senator SIEWERT: So it was just a normal meeting where they updated you on the process and you have not seen the scoping study and no-one has briefed you on the actual findings?

Mr Davidson : Correct.

Senator SIEWERT: Thank you.

CHAIR: Senator Cameron, I remind you that we are due to finish this area at 10 to 10, so we will try to stick to time.

Senator CAMERON: Yes. Let me formally make the request for the scoping study to be tabled.

Senator Payne: We will take it on notice. I would suggest that you make the request to Finance, frankly.

Senator CAMERON: Yes; but I am asking you. You have a copy, so I am asking you. How many recommendations were in the scoping study?

Senator Payne: I do not have that amount of detail with me.

Senator CAMERON: How many of the recommendations affected DHS?

Senator Payne: Clearly I do not have the detail with me. If you want to put some questions on notice about this, I will take them up with Finance as to what is possible to respond to.

Senator CAMERON: So it is not a secret?

Senator Payne: What is not a secret?

Senator CAMERON: Do you stand by the statement that you made that the scoping study is not a secret?

Senator Payne: Yes.

Senator CAMERON: Then why won't you talk about it?

Senator Payne: Because I do not actually 'own' the document about which you are speaking. I do not own the scoping study, I do not own the process. The process is managed by the Department of Finance, the Minister for Finance, and the extended consultation is being managed by the Department of Finance and the Department of Social Services.

Senator CAMERON: We are here till four o'clock, I think. Could I ask that the department contact the Finance department and seek their agreement to the tabling of the document here so that we can have a sensible discussion about it?

Senator Payne: We can put the question to the department, yes.

Senator CAMERON: Can that be done todaythis morning?

Senator Payne: I will take advice from the Secretary. I suspect it can, yes.

Senator CAMERON: Secretary?

Ms Campbell : Senator, we will ask the Department of Finance.

Senator CAMERON: So that would not be a big ask. They will say either 'yes' or 'no'.

Ms Campbell : Senator, we will ask the Department of Finance.

Senator CAMERON: This morning?

Ms Campbell : I am assuming that someone behind me is ringing them now.

Senator CAMERON: That is fantastic.

Senator SIEWERT: No-one is reaching for their phone, though.

Senator Payne: Senator, they are all on silent or turned off.

Senator CAMERON: Secretary, I cannot ask for more than that. Well, I could ask for the document. Just table itthat would be a good thing.

Senator Payne: Sorry, Senator.

Senator CAMERON: Mr Davidson, the speech processor upgradesremember we had the discussion about that at the last estimates hearings? Where are we up to with the funding for the upgrades and what are the implications of the funding issues?

Mr Davidson : If you do not mind me doing a tic-tac with my colleague; Emma can come in when I flounder a wee bit. There was a significant increase in demand that was not part of our forecast as a result of two elements. One was that the uptake of bilateral implant was greater than at any time in the past and, in fact, was 30 per cent higher than the previous year. If you are looking for two to three to four per cent growth each year, we were woefully short in our forecast at that stage. Secondly, I think Cochlear themselves were very comfortable in spruiking the new upgrade and causing possibly greater demand than was expected, as well. Given that the funding is capped, we had to go and revisit the clinical criteria for the upgrade so that any person who had a genuine need to be on air would be on air. The previous processor of the Nucleus 5 and the Nucleus 6, the new processor, have only one fundamental difference. The reduction of noise in noisy situations is currently available in Nucleus 5, but you have to actually physically go in and adjust it yourself. The new Nucleus 6 does an automatic activation of that process. Emma, the process for deciding the clinical need?

Ms Scanlan : We reviewed the candidacy criteria specifically for upgrades from the Nucleus 5 to the Nucleus  6. The focus is always on making sure that every child is on air at all times. So we looked at which groups of clients would benefit the most from that upgrade. We based that on reviewing the scientific literature and also information on the features and benefits of the processors. We also consulted with the implant clinics to see who would actually benefit from this automatic access to the features that are available in the Nucleus 6 processor.

Senator SIEWERT: Who did you decide would be the main beneficiaries of that?

Ms Scanlan : Children under the age of five

Senator SIEWERT: Who could not

Ms Scanlan : who were unable to, yes, physically; and also older people who had an additional disability that would make it more difficult for them to access that feature themselves.

Senator SIEWERT: Have you turned down people who have sought an upgrade because it is capped? I understand what you have done with the criteria. How many people have you had to then say no to?

Ms Scanlan : As of 31 March, we had had six people who had asked for a review or made a complaint about the change in the candidacy criteria, people who had come in. But we do have a process for anyone to come inthe information is on our websiteand actually have an individual review of the decision and we also have outlined the candidacy quite clearly on the website.

Senator SIEWERT: But you have only 'turned away'sorry, they are not quite the right wordsthere are only six people that have missed out. The others may well have self-selected when they looked at the criteria. Would that be right?

Ms Scanlan : They were the people who had actually contacted us to make a complaint. There may be other people who had asked for a review and who were not successful in obtaining the upgrade, but I would have to take that question on notice to get the actual figure.

Senator SIEWERT: If you could, that would be appreciated. Thank you.

Senator CAMERON: Mr Davidson, how is the uncertainty for staff being handled?

Mr Davidson : We have been in this uncertain state for some time now.

Senator CAMERON: For how long?

Mr Davidson : Since the scoping study was announced and taken on board. I have to say that our staff engagement numbers are at the highest ever. Our vacancy for employees is at the lowest rate ever; in fact, in clinical services, it is less than one per cent at the present moment. In addition, lost time through unwarranted sickness levels is at the lowest ever. So, taking those three criteria, you would have to assume that the staff are comfortable with the current situation. That is not to say that that will continue forever. But at the present moment, I would say that there will be pockets of uncertainty but, in the main, it appears to be tracking fairly well.

Senator CAMERON: So they are pretty resilient at the moment?

Mr Davidson : People are.

Senator CAMERON: This will not be resolved, as I read it from the minister's letter, until the second half of this year, until some time late this year. Is that your understanding of the time frame?

Mr Davidson : It is. I have been reading the same publications that you have.

Senator CAMERON: So you do not have any copies of the secret document?

Mr Davidson : No, absolutely not.

Senator CAMERON: The government's secrecy has held firm. Thank you for that.

CHAIR: Are we done with Australian Hearing?

Senator CAMERON: And we are early.

CHAIR: Thank you very much. I know that there are a number of senators with questions in this area. Again I will start with you, Senator Cameron; I will give you about 20 minutes and then I will go to others and we will just go back and forth a little. I will go to Senator Cameron.

Senator CAMERON: Are we in cross-portfolio?

CHAIR: Yes, cross-portfolio. In consultation with the secretary, in particularI think this is the way that we have done it in the pastgiven that there is only one outcome, we tend to just go across the issues. I suggest that is the best way to go.

Senator CAMERON: Minister and Secretary, I want to go to the ANAO report. I suppose I could ask the question that is asked in the publication: what kind of government service puts the public on hold for 811 years?

Ms Campbell : I am not sure where the 811-year number comes from. So I cannot answer that. It could be made up, for all I know. If we go to the substance of the ANAO audit, I think there is a waiting time, which of course has been quite transparent in the last number of PBSs and annual reports.

Senator CAMERON: I have heard other adjectives used as well as 'transparent'.

Ms Campbell : That KPI has been in place under this government and the previous government.

Senator CAMERON: Do you have the report before you?

Ms Campbell : Yes.

Senator CAMERON: Can I take you to page 12. We will go to the overall conclusion. Basically, in paragraph 7 on that page, they talk about the service being unique, being technically complex and being different from anything that applies in the private sector. Do you agree with that?

Ms Campbell : Yes.

Senator CAMERON: So it is quite a different organisation from

Ms Campbell : Very much so. Particularly with the complexity of the legislation and the framework that has grown over many years, it is very complex. Many customers call seeking for us to decode that for them in order to understand how that fits together.

Senator CAMERON: So you need highly skilled, highly trained people operating at the front line?

Ms Campbell : We have highly skilled, highly trained staff answering those calls.

Senator CAMERON: In the introduction on page 11, they say that the cost is about $159 billion a year, dealing with about 59.5 million calls, $338 million for telephones and you are still implementing the smart-centre approach.

Ms Campbell : We are.

Senator CAMERON: One of the things in the ANAO report that raised my eyebrow a bit was that the report was dealing with the telephony as distinct from any other service.

Ms Campbell : Yes.

Senator CAMERON: I was wondering how the ANAO could actually get a fix on the issues, given that telephony and service are a mixed function.

Ms Campbell : I think you would have to ask the ANAO that question.

Senator CAMERON: I have asked them, actually. But I was wondering what your view was in relation to how you disaggregate that.

Ms Campbell : We did raise with the ANAO throughout the process of the audit that it is a holistic service. We have the telephony, we have the digital offerings and we also have face to face. Of course, in that smart-centre mix, both telephony and the processing, one of the objectives of the smart centre, having telephony and processing together, is for us to be able to balance our supply of staff basically with the demand that is coming in on any occasion. So we did raise with the ANAO that these were very complex and intricate services that were provided.

Senator CAMERON: I have been keen to try and deal with it in that context. That is not to say that some of the criticisms are not issues that I want to raise with you today, but I am aware of that complexity. Minister, have you had a briefing from ANAO?

Senator Payne: Not from the ANAO, no.

Senator CAMERON: Did you think about getting one?

Senator Payne: I have been consulting significantly with the departmentI am sorry, 'significantly' is not the word I wanted'comprehensively' with the department on this during the process of the audit and the release of the audit, obviously with the secretary and the senior officers, and these are issues with which I and previous ministers have been dealing on a daily basis for some time.

Senator CAMERON: I must say, I sought and received a briefing and it was very helpful to understand the issues in the report, because obviously the secretary cannot give you all the answers from the ANAO context. I am just a bit concerned that you did not seek to get that wider briefing on this very important document. Okay, so no briefing. There is the issue of the 16 minutes. I understand that you have said that is the KPI that has been there for some time. One of the areas was thatthis is paragraph 10 on page 14 of the reportmany customers waited an average of nine minutes and 42 seconds before hanging up. Does the department think that is the pain threshold and that is when people just cannot stand it any longer?

Ms Campbell : We tried to make the point with the ANAO on a number of occasions around what are called 'abandoned' phone calls. Sometimes it can be because customers may have received the information that they were looking for, because we have prerecorded messages which provide detailed information on, sometimes, changes to payments, what the payments mean and the wait times. We also in our prerecorded messages alert customers to the use of digital services where they can get on line some of this information which they may be seeking. When a customer abandons, it is not clear to us whether they have to do something else with their time or whether some of their information needs have been met.

Senator CAMERON: I have not rung up, to be honest. How long are the prerecorded messages for?

Mr Tidswell : That would vary, according to the program or the line that people come through. But sometimes when there are particular government initiatives that are related to a particular customer group, like families, then we will have on that general families queue a recorded message that you do not need to do anything further or this is what you need to do, and in some instances it can be quite lengthy. So what people do is they talk into the telephone and that interprets where they would go to in that message as a result of their inquiry. So quite often, as Ms Campbell has said, our customers get the information they need and they can then go on and go about their life.

Senator CAMERON: Can you give me details of how long the recorded message is on each different source of incoming?

Mr Tidswell : We will take that on notice, but I expect that would be quite a challenging thing

Senator CAMERON: Would it?

Mr Tidswell : because it is a very complicated IVR with numerous utterances that will direct you to various places depending on points of time.

Senator CAMERON: I do not want to put the department to any unnecessary work on thisI want to be clear about thatbut I would like to get some rough idea, even. The argument that you are putting back to methat is, the departmentis that yes, you look at that nine minutes and you are putting to us that people are getting genuine help during that nine minutes

Mr Tidswell : Yes.

Senator CAMERON: But how long does the genuine help last for? If you are telling me that the genuine help lasts for one minute, then we have another eight minutes that people are hanging. If that help goes for five minutes, it is less that people are hanging. These are some of the issues

Senator Payne: Could we provide you with a sample across a couple of different lines?

Senator CAMERON: Yes, that would be handy. What is your longest wait time and in what area? It is welfare, isn't it?

Mr Tidswell : What was the

Senator CAMERON: What is the longest wait time?

Mr Tidswell : In the IVR?

Senator CAMERON: Yes, for any of your services?

Ms Campbell : For answering a call?

Senator CAMERON: Yes, the KPI ones.

Ms Campbell : On average, the longest?

Senator CAMERON: Yes. Is it welfare?

Mr Tidswell : We obviously have a number of different lines. There will be wait times above the 16 minutes wait times.

Senator CAMERON: Why don't you take that on notice? I am happy with what the minister has put to me.

Senator Payne: Thank you.

Senator CAMERON: We will do that sample. I might come back outside estimates or later today and say, 'Can you have a look at these specific ones?' That is okay. You have got 12.9 million abandoned calls and 13.7 million blocked calls; that is, about 31.7 per cent of total calls are blocked. I have not been out there. Have you got a control room?

Mr Tidswell : Yes, Senator.

Senator CAMERON: I should come and have a look at it. It has been described to me in layperson's terms as a big pipe. The calls come in through this big pipe and sometimes the pipe gets overloaded, so you restrict the pipe. And what can't get in goes to a 'call engaged' signal. Is that correct?

Mr Tidswell : One of the things we have done over some years is attempt to restrict the amount of call blocking, which effectively means the customer will receive an engaged signal over some time. We have reduced that by about 66 per cent over the last few years deliberately so that people can get the choice to enter into that IVR and get information about the service they might need.

In that sense what happens is that at certain pointssay, at the end of the daywe have to clear the queues out. It is no different, in a sense, from running a club or a bouncer letting people come in to that environment. You can only let a certain number of people in to that environment to protect the telephone infrastructure and to make sure that you handle the workload in a suitable fashion; otherwise we would be working every day of the week 24/7. So we try to restrict it very much to a demand situation where we do it, or to protect our infrastructure. The easiest way to fix wait times is to introduce more engaged signals. Previously, that is what we did. With respect to the level of blocking previously, there were far more blocked calls than we ever answered in any given year.

We went to the industry. They told us that, to understand your true demand, you need to restrict your blocking as much as possible. We then surveyed our customers and they said, 'We would prefer to be able to make a decision about wait times.' We advertise those wait times on those phone lines now and people can then make the choice about waiting or not. On top of that, we have put in a 'place in queue' that gives people the chance to be rung back at their convenience when their call would have received that wait time.

Senator CAMERON: I read some of the critiques. I am sure you have as well. There are quite a lot of them. I have never seen so many. I did not realise this would run, and I am sure the minister and the secretary did not think this would run, as long as it did. I think it is going to continue to run, given this report. This is quite a serious issue. These are citizens of Australia engaging with government. More citizens engage with government through this process than any other process. This is their engagement with government. The ANAO has highlighted that it is not very effective for lots of citizens. It is certainly not good enough. Even the way you measure the wait times and the KPIs is critiqued in this report. They talk about the ATO KPI being 80 per cent within five minutes. That is on page 15. Since this report, have you given any consideration to reverting to what the ANAO seems to say is best practice on the measurement of wait times?

Senator Payne: I will ask Secretary Campbell to answer that. It is worth noting, in regard to some of the comparisons that are made in the report by the ANAO, that the ATO takes 10 million calls a year. We take 59½  million calls a year. I understand the point that they make about what is desirable, but you need to be comparing apples with apples, in my humble personal opinion. I will let Secretary Campbell talk further about that.

Ms Campbell : Yes, the ATO do take a lot less phone calls. They do deal with a different subject matter. I accept that the tax system is very complex as well, but we are often dealing with multifaceted issues. Customers will ring up not just about their family tax benefit but about their family tax benefit, their Newstart allowance, their rental assistance and various other issues. Often, if we have vulnerable customers, we will also look to referrals to other services that they may need. The tax office does not have that spread of responsibilities.

The report at one point says that we are unique and that we are quite different from anything else, but then it does go on to compare us with others and their wait times, which is somewhat challenging for us in making that case. So, yes, we are constantly looking at this issue. We are constantly reviewing these matters. Up to 2012, we used to block calls on entry. I think we used to block some 43 million calls. We would start blocking calls at five past eight in the morning so that people would have shorter wait times. But I think we had approximately 8,000 complaints a year about the engaged signal. We get probably a similar level of complaints about extended wait times. But as Mr Tidswell said, the advice, when we went out to customers and to the private sector experts on smart centres, was that people did want to know what the wait time was, rather than receiving that blocking and continuing to have to call.

Senator CAMERON: Can I take you to page 26 of the report. The minister offered to look at a number of the areas. Table 1.1 shows the top 10 telephone lines by number. The biggest is family and parenting; employment service is No. 2; disability, sickness and carers is No. 3; and then you jump down to participation solutions. Would it be possible to give me the times for the digital helpnot the digital help

Senator Payne: The IVR.

Senator CAMERON: On those four?

Senator Payne: Is that what we were talking about earlier?

Ms Campbell : Yes, we can do that, Senator. We will take it on notice.

Senator CAMERON: I am not sure whether other people might think there are more important ones but they are the big ones.

Senator SIEWERT: You did not bring those numbers with you when you knew very well that we would be talking about wait times?

Senator Payne: Senator Siewert, I do not think Senator Cameron is just talking about wait times. He wanted to know how long the IVR message went for.

Senator CAMERON: Yes.

Senator Payne: And what its wait time was.

Senator CAMERON: Yes. We have not even covered the wait times yet.

Senator Payne: No, I understand that. So there is a distinction between these two points.

Senator CAMERON: It is a different debate. Thanks for that.

CHAIR: Senator Cameron, if you are looking to move on to other areas, you are just about out of time on this.

Senator CAMERON: I have lots of different

CHAIR: I know you do. You can have a couple more minutes and then I will go to Senator Reynolds.

Senator CAMERON: With respect to the issue of the computer system fixing this in the long term, I need to understand how the computer system, if it is not going to be up and running for seven years, will fix this problem.

Ms Campbell : Senator, you took us to table 1.1. The largest number of calls we have is families and parenting, at 6.6 million, compared to the next closest one at three million. Many of those customers are not customers of other services. Many of those customers are family tax benefit customers who may be in employment and may have regular interaction with digital services. So our strategy is to try and get as many of those customers onto digital services as possible so that we can free up this very popular service and this very popular channel. We are constantly looking at channel management. The new ICT system is very important in that, so that we can get best practice, really good digital products to the market, so that customers are able to use those and want to use those and will stick with those channels, rather than going back to telephony.

Senator CAMERON: But the ANAO report actually deals with the whole issue of channel management.

Ms Campbell : It does.

Senator CAMERON: They reference in here an OECD report on channel management. They indicate that channel management and digitisation are not delivering the benefits, the cost savings and the improved service that many governments around the world have forecast, because of the complexity of what you are dealing with. We spoke about that earlier. The complexity means that even if there is an app, even if there is a digital channel, people end up saying, 'I have to get back and talk to somebody about this.' The digital channels overseas are actually creating more work for face-to-face delivery. So this is the conundrum.

Ms Campbell : The government has other initiatives in place. The McClure report on the social services framework has also reported. Our colleagues in the Department of Social Services are looking at whether there are ways to simplify the payment system so that it is easily able to be understood by citizens.

Senator CAMERON: That is a debate for another place because simplification of the system means that there are other implications for citizens who may not get a payment that they otherwise would have received. So there are other debates

Senator Payne: I am sorry, Senator Cameron; I do not understand what you mean.

Senator CAMERON: If you simplify the system, you make it less flexible. It is not more flexible; it can be less flexible. That is another debate; it is not for here. But even where there are flexible systems, the McClure report is based on the British experience. The British experience still shows that by using digital it creates more calls back to face-to-face.

Ms Campbell : I do not think that is the evidence.

Mr Tidswell : I disagree with that. The evidence is not there in face-to-face. You were right in your opening comments about the complexity of the service delivery system that we run. In the last financial year there were 26.5 million transactions and contacts in our face-to-face environment, 59 million in the call environment, and 101 million self-service transactions in the last financial year. So it is a big, complex system. But the evidence is overwhelming. We are getting more and more people taking up the self-service offerings. We are getting well over 80 per cent of people reporting

Senator CAMERON: So the 16 minutes is going to come down; is that what you are telling us?

Mr Tidswell : I am not saying that, Senator.

Ms Campbell : He is not saying that.

Senator CAMERON: That is what I want to talk about.

Mr Tidswell : I am saying more and more people

Senator CAMERON: You tell us all of this stuff. We need to talk about how you can give citizens in this country a decent service. That is what we have to talk about.

Mr Tidswell : There is a lot going on, Senator.

CHAIR: You can get into some more detail on that when we come back to your questioning, if you like, Senator Cameron. I will go to Senator Reynolds now.

Senator REYNOLDS: Thank you, Chair. I would also like to pick up on some of the issues Senator Cameron has discussed this morning about the telephony system. Clearly, from the discussion this morning, it is a very complex system and environment. From what you are saying, is it the most complex of any federal agency?

Ms Campbell : We think so.

Senator REYNOLDS: Clearly, from what we have heard, something this complex is not only challenging but it is quite easy to sensationalise it, having regard to some of the headlines we have heard quoted this morning. What I would like to do first of all is to understand the complexity of the problems that you face. Can you go through and quantify a bit further exactly what that problem is? If we understand the problem and the complexities, it makes it easier to understand how to fix it. Could you verify some of the numbers? How many clients do you have potentially who are going to seek information and advice from you every year?

Mr Tidswell : In the Centrelink program there are about seven million. As you can see from those figures within the ANAO report about top 10 telephone lines, there are obviously a lot of people that ring us more than once in any given year.

Senator REYNOLDS: So the potential users of this service at the moment are about seven million people and quite often on multiple occasions?

Mr Tidswell : That is right, Senator. In any given week we answer about 200,000 calls that are really general inquiry calls. They are about: 'When is my payment due? How does this work in the system? My child is attending childcare,' et cetera. One of the things we are trying to do is build more information offerings, either aurally through the IVR that we talked about earlier, or through the website, so that people have more of the information they need to understand what they are entitled to, and then go off and take action to self-serve.

Senator REYNOLDS: Could we go through the categories of calls and unpick them further? The first one is people seeking basic information?

Mr Tidswell : Yes, Senator.

Senator REYNOLDS: I think the secretary indicated that there was a multitude of different programs. Do you have any idea of how many programs and types of questions somebody who answers the phone might have to deal with?

Mr Tidswell : That is a challenge, absolutely, because it can be quite difficult for one individual agent to have the ability to answer all the things that one particular family might be entitled to. So it is challenging. What we are seeing is that we are getting more complex inquiries. As we push more for self-service and more for transaction work and activities done by the customers themselves, our agents then are dealing with more complex activities. One of the things that is going on is that you are getting a longer handle time, which means fewer calls

Senator REYNOLDS: Because of the complexity?

Mr Tidswell : That is right. Fewer calls can be taken. In some instances we are able to finalise and finish those activities. In our families queue, for example, if someone rings and we can determine that it is to do with the progress of their claim, because they will speak that into the system, we will transfer them to an agent who is processing that claim. So in some instances it might take a little longer, but the work is done, the work is finished, and there is a great outcome for our customers.

Senator REYNOLDS: Someone on the first call is actually giving answers to the questions they have?

Mr Tidswell : That is right. That is what we want to try and do more of, to try and ensure that when the inquiry load comes through that it is a complex inquiry that cannot be handled by the individual themselves and it goes to the right agent with the right skill tag to do that work. We know there are a lot of moving parts to our system.

Senator REYNOLDS: So would it be safe to say then that you are gettingwhat did you say?60 million calls per annum?

Mr Tidswell : Fifty-nine, yes.

Senator REYNOLDS: Fifty-nine; close enough to 60.

Ms Campbell : It is close to 60.

Senator REYNOLDS: The tax office gets about 10 million a year?

Mr Tidswell : That is right.

Senator REYNOLDS: So seven million clients, 60 million calls, and 20,000 a day

Mr Tidswell : This is just the Centrelink program.

Senator REYNOLDS: were answered?

Ms Campbell : This is just the Centrelink program; this is not the Medicare Master Program or the Child Support Master Program.

Senator REYNOLDS: So a lot; hundreds of thousands. At the moment you are trying to move those people who have information inquiries that can be dealt with either on your recorded messages or digitally out of the telephony system so that your operators can then effectively and expediently deal with more complex advisory issues and perhaps even referrals or those sorts of things?

Senator Payne: And our more vulnerable customers, yes.

Senator REYNOLDS: And the more vulnerable customersspend more time on the phone with them. Just to clarify: you have got the telephone, you have got digital services and you are obviously still physically going to the offices and talking to someone face to face. Are those the three main avenues

Mr Tidswell : Absolutely, we have got the telephone, but within the telephone we have four 24/7 telephone lines where people can get information and do self-service. There is a phone self-service and we take about 5.5  million transactions per year in that area. We then have our digital offering, which is the online delivery, which invariably is more likely to be claiming activity, and that is increasing considerably. And we have our mobile transaction activity that last year did about 36 million transactions.

Senator REYNOLDS: On smart devices?

Mr Tidswell : On smart devices. Increasingly, more and more people are self-selecting to do that work and that activity themselves. We are trying to encourage and teach people how to use the digital service offering. Often a lot of the work our staff are now doing is not only explaining how it works but also encouraging and helping people to do that.

Senator REYNOLDS: To do it themselves.

Mr Tidswell : That is right. You will have seen that at the front of our service centres we have a digital service offering. We try and sit down with our customersand we do not do certain work like we used to do for everybody. We show how you can use it yourself. You can go in there during our operating hours from Monday to Friday and use those self-service computers.

Senator REYNOLDS: I have seen those with the minister.

Senator Payne: We have.

Senator REYNOLDS: They are very effective. We have seen people use them and get assistance. With that volume of demand on the telephone system itself, obviously you are going to try and upgrade the system and your processes to make it more effective. You are getting some people off the phone so that others can then engage one to one on more complex issues. Can you explain a little more about this call blocking issue? How does that impact? Why did you introduce call blocking?

Mr Tidswell : Previously call blocking was used literally as a way to prevent customers entering the queue. It is the simplest and easiest way

Senator REYNOLDS: To reduce call waiting times.

Mr Tidswell : to effectively game the system to deliver a result.

Senator REYNOLDS: You have great statistics.

Mr Tidswell : Correct.

Senator REYNOLDS: You cannot report what you don't know.

Mr Tidswell : That is right, Senator. We were told some years agothis was before the department was createdthat if you do not understand your demand, you will not be able to manage your demand. If you block, you will prevent people from entering that system. When we say there were 13 million blocked calls last financial year, they are blocked call attempts. That is where somebody could be sitting at their office desk or in their home hitting re-dial 10 times in the space of a very short period of time. They are call attempts. In the crudest and simplest way, the best analogy is how you would deal with a hotel or a club environment that is only licensed to take 500 people and you only let 20 in when 20 come out. It is the simplest way of giving the better average speed of answer.

Senator REYNOLDS: Some of these 13 million blocked calls could well have been, as you said, the same person who is just sitting there going redial, redial, redial

Mr Tidswell : That is right.

Senator REYNOLDS: within one minute or two minutes.

Mr Tidswell : That is right. We have no way of identifying that unless we do some sample survey or something to find out exactly how that occurs. Blocking occurs everywhere in contact centre environments. If a contact centre operator tells you that they do not block, I would not necessarily believe them, because everybody has got a bandwidth

Senator REYNOLDS: Having experienced it regularly myself with other services, I know exactly what you mean.

Mr Tidswell : That is right. Our customers have said that they do not like it. What we do now is advertise a wait time. We have been extraordinarily transparent in this process. We advertise the wait time, which leads me to have some difficulty with complaints and other activity. But then people can make a choice. That is what our customers have told us.

Senator REYNOLDS: In an axiomatic or a perverse way, by actually reducing the amount of calls blocked, in the long-term it is going to allow you to provide a better service because you know what the demand is and then you can deal with it through the telephone, smart devices or anything else.

Mr Tidswell : Yes.

Senator REYNOLDS: So while it might be a bit frustrating for those people who do experience longer call times, in the longer term it will make things easier.

Mr Tidswell : That is right. On top of that, for some of the more vulnerable customers, we do not block. With some of the more vulnerable queues, effectively, we have a very low average speed of answer.

Senator REYNOLDS: Have you got any examples of that?

Mr Tidswell : We have; the income management BasicsCard after-hours number. We have an average speed of answerthis is year to date up to 24 May this yearof two minutes and 18 seconds. For the BasicsCard inquiry linethis is not a small line; it has taken up to a million calls up until 24 May this yearthe average speed of answer is nine minutes and seven seconds.

Senator SIEWERT: Over what period of time?

Mr Tidswell : This period of time is for this financial yearyear to date up to 24 May 2015.

Senator REYNOLDS: Sorry, Mr Tidswell; what line is this one?

Mr Tidswell : That is the income management BasicsCard inquiry line.

Senator REYNOLDS: That was a two minute average wait time?

Mr Tidswell : No. That is the income management BasicsCard inquiry line. That is the one that is at nine minutes and seven seconds and we have taken 1,091,590 calls already this financial year. The previous one that I talked about at two minutes was the income management BasicsCard after-hours line. That runs 24 hours.

Senator REYNOLDS: They are clearly some of the people who are more vulnerable and need a much quicker access

Mr Tidswell : That is right.

Senator REYNOLDS: and it is a 24-hour service.

Mr Tidswell : That is right. We have got the TTYthe telephone typewriter servicefor the hearing impaired

Senator REYNOLDS: You do have a lot of acronyms.

Mr Tidswell : at an average speed of answer of 16 seconds. We have taken 1,400 calls in that period. We are deliberately protecting those who have urgent payment inquiries. There is another queue, which is probably our most complex queue, and that is the participation solutions team. This is where a job seeker may not have done the right thing.

Senator CAMERON: Sorry, I missed that.

Senator Payne: Participation solutions.

Senator CAMERON: That is the one that

Senator Payne: Job seekers.

Ms Campbell : Job seekers who have not met their obligations.

Mr Tidswell : We have to talk to the job seeker. Sometimes we have to phone their Job Services Australia provider. We have a three-way hook-up, to say, 'Why didn't you attend the appointment? Why didn't you do this?' We have taken 759,000 calls on this line, on average, to 24 May this year, with an average speed of answer of 16 minutes. That has got some of the longest average handle time that you will get. We are concentrating on helping those customers with their needs.

Senator REYNOLDS: It would be safe to say, from what you are sayingthis is my perception of what you have saidthat while it is very easy and perhaps a bit sensationalist to aggregate numbers, when you disaggregate them and have a look at them, it is very different. Where you can identify vulnerable groups who need a longer, more rapid response, you have the capability to do that.

Mr Tidswell : Yes.

Senator REYNOLDS: And then you move people off the lines. I think the secretary may have mentioned this briefly, but are there significant variations in calls? Do you get peaks and troughs which might aggregate some of the figures?

Mr Tidswell : Absolutely. We have a number of peaks through the year. We have an end of financial year and new financial year peak. We have a Christmas-January peak. We have a students peak. We have a whole raft of peaks.

Senator REYNOLDS: What sorts of variations would you get then?

Mr Tidswell : Considerable variations. You can get upwards of 50 per cent more calls, in particular, in about the July-August period and the December-January period. It is challenging. We try to match the demand with the supply. We try to get our staff in the right place at the right time to handle the work.

Senator REYNOLDS: What staff have you got on this telephony system?

Mr Tidswell : The total number of staff we have at the moment? I do not have that figure with me. We have probably got it in here in our ANAO report. It is probably best to stick to that. For 2013-14, and I think we can go to page 39 in the report

Senator REYNOLDS: Sorry, say that again?

Mr Tidswell : Page 39 in the ANAO report. It is probably best to keep to these figures.

Senator CAMERON: What page are you on?

Mr Tidswell : Page 39.

Senator Payne: We might need a little more volume in the room.

Senator MOORE: It is an issue with this room.

Senator CAMERON: I thought it was my old boilermaker ears.

Senator REYNOLDS: No, it is the room.

Mr Tidswell : Senator, I will speak up. How is that? Is that better?

Senator REYNOLDS: That is great. Thank you.

Mr Tidswell : We have 2,743 staff

Senator REYNOLDS: 2,743?

Mr Tidswell : FTE for 2013-14. It is best, I think, if we deal with those figures in that sense because the numbers vary. We try to put on extra staff to manage these peaks. In the last number of years we have been using intermittent and irregular employees. In some of our service centres we are running seven day a week to manage the demand and workload across the entire system.

Senator REYNOLDS: That is quite sizeable; 2,743 is a very sizeable permanent workforce already. So you have them on

Senator MOORE: Permanent work?

Senator REYNOLDS: Shifts?

Mr Tidswell : Shifts, that is right.

Senator REYNOLDS: Obviously over 24 hours. Some of them will be business hours?

Mr Tidswell : We run our call lines across Monday to Friday, but we also run some of the lines across Saturday and Sunday and operate 24/7 on those lines.

Senator REYNOLDS: I have one final question. It relates to a Canberra Times story last week about the nearly $500 million telephone contract. I do not know whether you have seen the article. The article was quite critical of the contract with Telstra. Can you give us a bit more information about that particular contract and what it is designed to do?

Mr Tidswell : This is one of our great opportunitiesparticularly for meto manage telephony volume and traffic across the country. We hope, by this calendar year, that we will have in place the ability to move calls around the entire network and I will have 15,000 handsets to be able to distribute calls to. On top of that, we have built a work distribution system to pass all the work up and move the work around. We are now in the process of working with our partner provider Telstra to schedule those 15,000 staff in terms of the work and activity. It gives us the chance to move the work where there is the available skilled tag agent around the country. It will mean improvements in managing the demand. I do not think we have ever said it will reduce the demand, but it will give us a great chance to manage that demand in a much more coordinated way than we do at the moment. When the pressure is on we try and have as many people early in the week. We get a surge of activity on a Monday and on a Tuesday and it trails off towards Friday. So we try and schedule as many people on the phones early in the week, take the demand out of it, and then move those people back into doing processing work and other activity. There is always work coming in in that phase.

Senator REYNOLDS: So as you said, at the moment you have just over 2,700 staff whom you try to manage, including some surge workforce to deal with the daily, weekly, monthly and yearly peaks and troughs. It is exponentially going to give you the capacity to manage those more effectively by having another 15,000 across the department? Is that right? It is almost like a surge capacity, all to better manage the calls.

Mr Tidswell : That can mean that I have an expanded network now. We will have to train people. There will be times when we will distribute phone calls. We will also distribute processing work. We will also maybe shift work back and forwards between the face-to-face network, the processing teams and the inbound telephony teams in that sense. On top of thatMr Sterrenberg can give some more detailswe are getting greater ability to find out more information about why people are ringing, the ability to record utterances and give us that sense of what is happening on those phone lines. Why are people ringing us? What has happened? Has something gone on? Has an announcement been made? Is something happening? So we can real-time respondnot just moving staff to the effort but also adjusting our communication products in our website, in our IVR, in our general media information to manage that in a better way. It is an exciting opportunity, the technology

Senator REYNOLDS: I'd say it is.

Mr Tidswell : is very challenging. It will take us some time to take the great benefit of the technology.

Senator CAMERON: Chair, can I follow up on this? That all sounds very soothing. It sounds very gooda terrific management approach. But I haven't heard the staff mentioned once, other than your IIEs. Your staff don't seem to come into it. Given that you have managers in your place who think your staff are rats

Senator REYNOLDS: Excuse me, Chair. I think my colleague has taken a pass through the telephony issue through to the EBA

Senator CAMERON: They are the equivalent of toilet paper.

CHAIR: Senator Cameron! You wanted a follow-up and I allowed

Senator CAMERON: I am seeking answers

CHAIR: You are not. You are making all sorts of assertions now.

Senator REYNOLDS: You have gone into the EBA now

CHAIR: Senator Reynolds had the call. If it were going to be a genuine follow-up on this issue, I would allow it.

Senator CAMERON: As a genuine follow-up, how do you engage with your staff in this? You haven't spoken about your staff once.

Senator REYNOLDS: Excuse me, again, Chair.

Senator CAMERON: If people think they are the equivalent of rats and toilet paper, how are you going to fix it?

Senator REYNOLDS: Excuse me again, Chair. Senator Cameron has interrupted my time and he has moved into the EBA

Senator CAMERON: The EBA?

Senator REYNOLDS: I clearly heard them talk a lot about staff. We have gone through staffing in some detail, in the course of my questions.

CHAIR: On that note, we are over time. This is an opportune time to break. We are over time. We will come back at ten to eleven.

Proceedings suspended from 10 : 33 to 10 : 49

CHAIR: Let us recommence. Before I go to othersand I think Senator Reynolds was finished thereI had one follow-up there. I do not think it was asked. In relation to the number of blocked calls, do we have numbers over the last few years? Have we seen it going down, going up or staying steady? What has been the trend in the last few years?

Mr Tidswell : We have made a dramatic reduction. The report I do not have at the table in front of me. It is at page 37 of the ANAO report. You can clearly see there the reduction in blocked calls from 2010-11, from just under 40 million down to 13.7 million last financial year. So we have been quite active in literally weaning ourselves off using blocking as a way in which to control average speed of answer. It is about a 66 per cent reduction in call blocking.

CHAIR: That is a very good outcome. Thank you for that. Now I will go to Senator Siewert, who has been waiting.

Senator SIEWERT: I want to go, firstly, to the comment you made about the income management lines. Could you clarify what the first line was?

Mr Tidswell : This is the average speed of answer from the period 1 July 2014 to 24 May 2015. The first line is the income management BasicsCard after hours line. That is an average speed answer of two minutes 18. We have taken thus far 737,000 calls. The next one is the income management BasicsCard inquiries line. That obviously does not run 24/7. That was an average speed of answer of nine minutes and seven seconds. We have taken 1,091,000 calls so far up to 24 May.

Senator SIEWERT: Just to be clear, that is on income management. My calculation from the figures that DSS has very helpfully provided in advance is about 27,000 people and we are getting over a million calls?

Mr Tidswell : I do not know. I do not have those figures in front of me. My colleagues here may have those figures. As you know, I knew the numbers backwards. I cannot confirm that.

Senator SIEWERT: I obviously will be following that up with DSS. I would say that is an alarming amount of phone calls from 27,000 people.

Mr Tidswell : I think it just highlights what we are trying to do here with the most vulnerable to make sure that they have access to their money, and we had many conversations in this room about what we try to do. On top of that people can get their BasicsCard balances through auto line. They can get it through a phone line. They can get it in smart app as well. So we have tried to do as much as we can because we know how important that is.

Senator SIEWERT: Can I go back now to the wait times, please. I am pretty certain that you would have a list of the most up-to-date wait times against those lines.

Mr Tidswell : We can give you what we call 'the 'main queues'.

Senator SIEWERT: Can you table that instead of us writing it down? Are you able to table the document now?

Mr Tidswell : We will see what we have. We have all the data there. I can read it into Hansard.

Senator SIEWERT: I am very conscious that we are going to run out of time. If you could table it, that would make life a lot easier for everybody.

Mr Tidswell : We will have a look if we can.

Ms Campbell : We can give you this piece of paper, if that is okay. It is not typed.

Senator SIEWERT: I don't care if it is not typed. As long as you are comfortable to give it to us, maybe we could get that.

Mr Tidswell : Okay.

Senator SIEWERT: Thank you. That would be appreciated. I wanted to go back to how you know that the people that are hanging up at nine minutes may have got the information from the recorded messages?

Mr Tidswell : We do not.

Senator SIEWERT: You do not?

Mr Tidswell : There is a debate about a good abandon and a bad abandon. We are not quite sure. But what our customers told us was: 'Don't stop us getting in there. We will make up our own minds up whether we want to wait or not wait.' The other thing on those main business lines at the moment is that over 12 per cent of calls this financial year thus far have been placed in queue. So people have elected to take a place in a call queue. We are getting a very good strike rate in calling people back. They are very appreciative of it.

Senator SIEWERT: What is the strike? I wanted to come to the call back. I will come back to that in a minute. I want to know, in terms of the hang-up at nine minutesand we have established that we do not know from the wait time why they are hanging up—what calls are calculated in the wait time.

Mr Tidswell : Basically the average speed of answer is once you have entered the IVR until you speak to an agent. So that is our average speed of answer.

Senator SIEWERT: But it does not include the nine minutes after they hang up?

Mr Tidswell : No.

Senator SIEWERT: So we actually do not know what the wait time would be if those nine-minute hang up people actually stayed on the line?

Ms Campbell : And we do not know whether they ring back and get through and have their question answered. It is a bit like

Senator SIEWERT: That is a whole other matter. It is still about accessibility for people that need to know information. That, we have already established this morning, is a very complex process that people are trying to navigate.

Ms Campbell : I do not think we can add those people who wait for the nine minutes onto the ones who do not and assume that they do not ring at some other time and get through as well.

Senator SIEWERT: Basically we do not know if we have got an accurate understanding of the wait time because if those people actually stayed on they would be waiting longer?

Ms Campbell : But then they may not ring back later and be another call later on. We do not know whether those people who abandon then ring back the next day and go into the average then. So to say that all those people that abandon do not ring back later and get through and add that in is not

Senator Payne: On that premise

Senator SIEWERT: But we do not

Senator Payne: we put the whole Medicare population in as potential waiting caller. That does not logically flow.

Senator SIEWERT: Yes, it does. I am sorry, these people are ringing up and then giving up.

Senator Payne: The whole Medicare population?

Senator SIEWERT: You are saying the average wait time is 16 minutes, when people are waiting on, and the average hang-up time is nine minutes; so they are not included in the wait time.

Ms Campbell : No. But it is possible that they may ring back a different time and be answered and be included in the wait time. So it is not reasonable then to add the hang-ups and say that that may have necessarily extended the wait time.

Senator Payne: Or that they may have received useful information in the period in which they were on the phone in the first place.

Senator SIEWERT: Basically we do not know. So we are making some assumptions.

Senator Payne: We have to.

Senator SIEWERT: We are saying it is only a 16-minute wait time when there are a whole lot of people that are hanging up and are not being included in the wait time. We do not know if they are ringing back and we do not know if they are getting the information they need.

Mr Tidswell : Sometimes what we found was that there is a particular flurry of activity because of a policy announcement or something in the press, and we have been able to get a quick message into the IVR. This is those people who will go into the IVR and listen to that message. Then we have seen a drop-off in demand for calls. People have got a message, 'You don't need to do anything—this is not going to happen until January such and such,' which is a very real circumstance in our world. We are trying to perfect that ability to manage in real time, to give people information, calm people down if necessary, so that we do not have to deal with really simple inquiry calls, because our trained agents want to do the best thing they can do for more complex inquiries.

Senator SIEWERT: In terms of the average hang-up time at nine minutes, do you have an understanding of when that happens? Following up on what you just said in terms of you getting surges, is the nine minutes across the board? Do you have an understanding of when people are hanging up?

Mr Tidswell : Generally, in the broad sense, you get demand coming on and there is more pressure by people trying to come in through the queuesand we have some pressure in respect to adjusting the call-blocking parametersyou are likely to get a high level of abandon. Where you are not having high level of demand, later in the week and it is not a period of one hour season peaks, your abandon figure will be much lower. That is the general proposition of how it works.

Senator SIEWERT: But the 16 minutes is over the year?

Mr Tidswell : Yes.

Senator SIEWERT: It can be higher in those high demand periods?

Mr Tidswell : Yes.

Senator Payne: And lower, yes.

Senator SIEWERT: Yes, it can be lower. I am worried about, obviously, the numbers that are trying to find out what is going on.

Mr Tidswell : In the early part of the evidence here we did say that we still had a substantial physical network handling 26.5 million transactions last financial year, 100,000 transactions every day. We do provide that serviceand we know thisfor the most vulnerable in those settings. That continues. We are getting better at managing. We have an average wait time there of 12 minutes 45 seconds year-to-date, I think to 30 April this year. We are more in control of that environment than we ever have been. We are doing longer activities with those customers because more of those customers are doing the simple stuff themselves.

Senator SIEWERT: That was what I was going to come to, the complexity of the issues that are being dealt with. How many of the staff in the call centres are casual workers?

Ms Campbell : Irregular and intermittent employees?

Senator SIEWERT: If that is what we are calling them now, yes.

Ms Campbell : That is under the Public Service Act. I think that is what we are calling them, yes.

Senator SIEWERT: Sorry, I am still old fashioned. I call them 'casual'.

Mr Tidswell : We are just trying to find the percentage of IIEs that we have, if you can bear with us.

Senator SIEWERT: It has been put to me that those that are casual are unable to deal with the more complex issues that people ring up with and that it lengthens the time that their call takes because they have to be transferred or they are told to ring back.

Mr Tidswell : In the early days, probably three or so years ago

Ms Campbell : Two years ago.

Mr Tidswell : when we put a big number on, it was a particular issue for the former government. We did have that with our first group of people.

Ms Campbell : First few months.

Mr Tidswell : But now we have much lower transfer rates. We are trying to develop what we call a skills pyramid, where we have a general layer of more simple inquiry load and then it goes up to a more complex inquiry load. Our aim is to try and get a customer with that inquiry to the right agent at the right time so that you do not have multiple transfers. It is difficult because some individuals might have multiple payment issues for their family, and it is very challenging for one agent to be able to do this. It is the same with a bank. You do not go to the same agent to talk about your credit card, your home loan and your insurances; you have to go to different desks or phone contact points to do that.

We are trying to minimise that trend. We know that it adds time to the activity for the customer and it is not an efficient way to utilise our staff. More and more, we are getting that generalised layer working right across the board. That is generally where we surge early in the week to get on top of that demand.

Senator SIEWERT: Do we have the figures on how many are casual?

Mr Tidswell : As at 30 April 2015 we have 1,010 FTE IIEs across smart centres.

Senator SIEWERT: Sorry, how many?

Mr Tidswell : 1,010

Ms Campbell : Full-time equivalents.

Senator Payne: Who are IIEs.

Senator SIEWERT: Who are?

Ms Campbell : Irregular and intermittent employees, or 'casuals' in your terminology.

Senator SIEWERT: Yes, casuals. So of the FTEs, the 2,743and I know the problem is I am now comparing apples to oranges.

Mr Tidswell : Yes.

Senator SIEWERT: You can tell me that to 30 April this year. That was to this year, wasn't it?

Mr Tidswell : That is right. That is this year's figures.

Senator SIEWERT: Surely, you can tell me how many FTEs overall there are, if you can tell me how many irregular and

Senator Payne: Intermittent. You can keep saying 'casuals', Senator. We know what you mean.

Senator SIEWERT: Thank you.

Senator CAMERON: Unless you change the meaning.

Senator Payne: You would have to go to the Public Service Commissioner. Nothing is that simple.

Senator SIEWERT: My head hurts already!

Senator Payne: It just means not permanent.

Mr Tidswell : We will have a problem here with apples and oranges because the ANAO report particularly talks about inbound telephony staff for the Centrelink master program. We have figures here for our smart centres, where they will do work across a variety of queues outside Centrelink. In terms of our smart centre staffing profile until 30 April 2015, we have 2,515 staff, both non-ongoing and ongoing. Then we have 1,010, as we said, intermittent and irregular employees.

Senator SIEWERT: The 1,010 are on top of

Mr Tidswell : Yes. That is a total figure of 3,525. You cannot compare back to that other dataset because that was just for the Centrelink inbound telephony. These staff will do work across a number of other queues that are contained within the

Senator SIEWERT: The smart centre?

Mr Tidswell : That is right.

Senator SIEWERT: I understand that. Of that, there is about a third of the smart centres

Ms Campbell : Less than a third, Senator.

Senator SIEWERT: A bit less than a third.

Ms Campbell : Yes, less than a third.

Senator SIEWERT: So that 1,100 is actually for the smart centres as well?

Ms Campbell : That is 1,010 for the smart centre call

Mr Tidswell : But it does not just apply to the Centrelink only queues that are in the ANAO report.

Senator SIEWERT: I understand what you are saying.

Ms Campbell : It does things like Medicare public, Tasmanian freight equalisation and some of those other

Senator SIEWERT: Thank you. The question is: for 2013-14, would there have been a similar proportion of irregular and intermittent staff?

Ms Campbell : Broadly, it has been about those same proportions. We would have to take that on notice and get you the numbers.

Senator SIEWERT: So a fair proportion of them are casual?

Ms Campbell : Less than a third. The irregular and intermittent employees allow us to surge, when the surges are required, and not to have them there when it is a quieter time. So we are able to provide better service when we experience surge.

Senator SIEWERT: There are still some on, though, throughout the year; is that correct?

Ms Campbell : When I say 'surge', sometimes we surge on Mondays and Tuesdays and not on Thursdays and Fridays.

Senator SIEWERT: So you are not just talking about surges in terms of what we were discussing earlier, of when announcements are made?

Ms Campbell : No; and it can be surge within the day as well. Sometimes we are really busy on different queues at lunchtime; sometimes it is later in the afternoon. So we are able to match supply and demand.

Senator SIEWERT: In terms of the number of calls, the issue then is ability to deal with complex issues. Do you keep records of how many are having to be transferred?

Mr Tidswell : I do not know whether I have that figure in front of me. We will have to take that on notice.

Senator CAMERON: You do. If you look at page 72 of the ANAO reportI was just looking at it, fortuitouslythey say that it used to be 40 per cent that were transferred. It is now 29 per cent.

Senator SIEWERT: I want to know the figure for this year.

Mr Tidswell : We do not have those figures. We acknowledge that in the early days there was a higher transfer rate than we would have liked. We really worked hard. The aim here is to guide the customer to the right place.

Senator SIEWERT: I understand what you are saying. I am trying to find out what the figures are.

Ms Campbell : We will also have transfers from ongoing staff because they will start with an issueand I refer to Mr Tidswell's analogy to the bankand they will discover that they cannot talk about some question. So those transfers are about getting the best customer service for that customer. This implies that transfer is bad, whereas transfer can often be very good because the customer is going to get the right answer.

Senator SIEWERT: I understand what you are saying. So there is the issue around transfer where it is a really complex issue and they need to be transferred. There is the issue around transfer where you are dealing with somebody who does not know all of the detail because they are irregular and intermittent staff, and people are being transferred anyway.

Ms Campbell : We will often have staff under training who are full-time, ongoing staff and who will not be able to deal with an issue because in the course of the conversation it becomes outside their skill set. I am not sure whether we define why calls are transferred. We will take that on notice and get back to you.

Senator SIEWERT: If you could.

Ms Campbell : I do want to be clear that we should not take transfer as being a bad outcome.

Senator SIEWERT: I understand that. That is why I am asking around the two issues. I realise there is that complexity. Could you take that on notice for the two? Does anybody that rings up ever told that they can go and look it up themselves on the computer?

Ms Campbell : We often encourage people, so that they do not have to wait next time, to use digital services. Again, we see digital services as a positive thing. People can find the information they want in their own time.

Senator SIEWERT: I understand that. Telling people for future referencethat is fine. Are people, once they get through, told to go and look it up digitally rather than being given it there and then, once they are on the phone?

Mr Tidswell : I have no information that that occurs. Our aim is to try to tell people that there are other solutions, without telling them, 'You shouldn't have come through to us and we're not going to answer your questions.' We do not do that. We deal with the inquiry and move it forward. What we are really trying to showcase to people is that there are alternatives for a lot of the calls; not all, but for a lot of the calls. They are pretty good alternatives, and more people are taking them up. Our role is to try and help people cross that digital divide if it is an issue for them. Increasingly, it is not. We have gone out of our way to try and do that, in that sense. I have never heard of it; I have not had a complaint where somebody has said to me they have been told they have not got an answer and to go and search a website. I would not be comfortable with that service outcome at all.

Senator MOORE: Mr Tidswell, have you particularly told staff not to say that?

Mr Tidswell : I do not think it is in our scripts to do that. Our scripts are really about

Senator MOORE: That is not my question, Mr Tidswell. This is not an unusual statement from people in the community, and I am surprised that you have never heard of it. In terms of the discussion with the community, one of the things we have been told is that sometimes people feelagain, I am not a witness to these conversationsas though they have been told to go away and look at a computer and check it out themselves. I take all the arguments you have put about encouraging people to use alternative systems. I am saying that this is something we hear not irregularly, having regard to the concerns of people that contact our offices. It would be useful to know whether there is something in the training so that, in the midst of encouragement to use alternative methodologies, you could learn better ways of actually saying that.

Mr Tidswell : I will take that on notice. Certainly, we encourage our staff to sell the digital service options, but it would not be in a way that is described here. We will take it on notice and look at our training and provide that information.

Senator MOORE: That would be great. Thank you.

Senator SIEWERT: I want to go back to the issue about call-backs. Do all requests for call-backs now get done?

Mr Tidswell : The approach that we have, as I said, in this financial yearI am not quite sure of the dateis that about 12 per cent of all the calls we have taken on those main business lines, where it is offered, are placed in queue calls. My figure, unless somebody can correct me, is that it is about a 94 per cent success rate in getting back in contact with people. Sometimes people might not be at their phone, they go and do something else or whatever. This is well received. It is a great thing for customers. It is very difficult to manage because you can almost turn your inbound telephony operation into a 'place in queue' service offer. So at about 3 pm every day we close that offer down, because we could be there until midnight answering calls. It is a great solution for those who have urgent and pressing concerns and needs. I would hope that it is, by and large, used for that purpose.

Senator SIEWERT: In terms of the well-known issues with the software problem

Ms Campbell : The Centrelink computer system?

Senator SIEWERT: Yes, the Centrelink computer system. People have talked to me about the fact that sometimes the systems are not working when they ring, so they cannot get the information that is required. Is that an issue or is that just anecdotal?

Ms Campbell : Mr Sterrenberg can come to the table and tell us when the systems were down. For most of the information that people have sought, that is usually on the website. I do not think the website has been down very often.

Senator SIEWERT: Surely, people are ringing up around their particular payments, and, in particular, where you have complex issues around when people were working, when they are reporting their earnings. For example, I have had people tell me that they have reported their earnings and it has not been processed. It has not actually been processed in their payments.

Ms Campbell : Mr Sterrenberg can tell us about when the system has been down. Sometimes there are a number of ways to report earnings. We can do it by the digital system. We can do it by telephony self-serve. We can do it by telephony. We can do it face-to-face.

Senator SIEWERT: I am using that as an example of some of the things that people have raised with me that they have rung up to talk to a human about.

Mr Sterrenberg : I can provide the information you are looking for. Over the last three months, January to March, our average systems availability has been 98.77 per cent. We manage and monitor service levels across 324 different services, including availability, reliability and transaction response. In the last month the performance was 99.07 per cent.

Senator SIEWERT: When is the period of time that that is not going to be working? Is it for a period of time or will you have glitches for a short period of time when the system will not be available for something?

Mr Sterrenberg : We have a categorisation in terms of the types of errors. Where it is a priority one incident, that means that the service is not available generally to the public because of a major system failure, which could be hardware related or whatever. In the last three months we have had two such incidents. That equates, if you compare that against the previous three monthsthat is, January to March in the previous financial yearto a 95  per cent reduction. Year on year against the same seasonal period we have had a significant stabilisation in our systems.

Senator SIEWERT: I think we are talking about two different things. That is useful information. That is when the system has been available to the public, as I understand it.

Mr Sterrenberg : Yes.

Senator SIEWERT: What about when they ring up and ask something about the details of their payments or query something and the person answering the call then has to use the system?

Ms Campbell : It is the same number.

Senator SIEWERT: It is the same number. So when we are talking about it being available to the public, we are actually talking about

Mr Sterrenberg : To the staff as well.

Senator SIEWERT: whenever someone is ringing or online themselves?

Mr Sterrenberg : Yes.

Ms Campbell : It is one system available both to the public and to staff.

Senator SIEWERT: Thank you for that. That is helpful.

CHAIR: Senator Cameron.

Senator CAMERON: Thank you. Mr Sterrenberg, we will come back to the computer system. In terms of the statements that have been made about the importance of the computer system to resolve some of these call wait problems, it is about seven-year lead time for the ISA system to be dealt with, isn't it?

Ms Campbell : The system is going to take seven years in entirety. It will be modularised, so there will be some improvements as the modules are built.

Senator CAMERON: What modules are going to be built for improving smart centre wait times?

Ms Campbell : As the minister has said, if we could have systems which are able to be used by customers from start to go, a system that could tell them where their claim is up to. We get a lot of calls from people who say, 'Where is my claim up to?' They are told that claims will take a certain period, but they might ring quite regularly to find out where their claim is up to. If we have a system that tells them where their claim is up to, that it has gone through, they have got the information and we expect it to be X days, we are hopeful that that will reduce the number of calls coming into our smart centres.

Senator CAMERON: When will that be in place and operating?

Ms Campbell : We are starting this process now. We are about to go to the market. We do not have those finalised time frames. We will be able to advise it once we have been to the market and we have the project plan established.

Senator CAMERON: I will come back to that when we deal with the computer system itself. The recommendations in the ANAO reportthe first recommendation you have agreed, and that is to establish a pathway and timetable for the implementation of a coordinated channel strategy. How long will it take before the channel strategy is in place?

Mr Tidswell : We have engaged an external company to provide that advice. They are working on that as we speak. We are hopeful to have that report by the end of this month, so the end of this financial year. It is to help us work through a lot of the stuff we have been saying here. How can we actually increase the channel movement from the older traditional channels, face to face and voice, through to the modern digital channels? What do we need to do to effect that?

Senator CAMERON: The channels are not just digital channels, are they?

Mr Tidswell : I think, Senator, you opened your questioning with the view that it is a total service system. I think the ANAO would have given you that advice as well. So we look at the whole thing together. What happens in face to face, what happens in an inbound telephone conversation, what do we do in an outbound telephone conversation, how do we actually keep people in the digital world? There is all sorts of modern technology coming our way that the rest of the world is using to keep people in the digital channels as part of the context of their environment.

Senator CAMERON: Who is undertaking this work for you?

Mr Tidswell : PriceWaterhouseCoopers.

Senator CAMERON: PwC. They get a lot of work from you.

Senator Payne: Sorry?

Senator CAMERON: I said they get a lot of work, PwC, around government.

Senator Payne: From the government?

Senator CAMERON: Yes. It is just an observation. I am not asking for any response. So their report will be ready in a month?

Mr Tidswell : It will be delivered to us by the end of this month.

Senator CAMERON: Then there will be an implementation period.

Mr Tidswell : Then we will review and consider what we have got to do and develop an implementation approach and strategy.

Senator CAMERON: Will that be another secret report?

Ms Campbell : The report will be received by the department. We will provide advice to the minister.

Senator Payne: It is the normal process of government.

Senator CAMERON: The report is not advice to the minister, is it?

Ms Campbell : I said that we would get the report, we would consider it

Senator CAMERON: I heard what you said. I am making the comment that the report is not advice to the minister. So when the report is available, will you provide it to this committee?

Ms Campbell : Will I provide it to?

Senator CAMERON: To the committee.

Ms Campbell : We can take that on notice.

Senator CAMERON: Okay. The second recommendation relates to the quality call listening process. That goes to this IIE problem that the ANAO talk about extensively in terms of the transferred calls. Partly this is because of quality assurance and part of it is because of lack of experience. It was 29 per cent in 2014-15that is, 29 per cent transferred calls. This quality control framework is designed to try and help that, isn't it?

Mr Tidswell : Yes. We agree with that recommendation. We have been working on that to develop a more integrated approach to our quality listening and quality approaches across the board. I am not quite sure when; my colleagues might be able to tell me.

Mr Maloney : As Mr Tidswell said, we did agree with this. We have already increased the amount of quality call listening that we are doing. But, broader than that, we are looking at the framework around quality generally inside the organisation. I believe that is also due to be completed by the end of this month.

Senator CAMERON: Will that report be available for the committee?

Mr Tidswell : We will take that on notice.

Senator CAMERON: The third area is the key performance indicators. As I indicated, the recommendation was to change the mode to the mode market standard, which is equivalent to Telstra, Qantas and other companies like that. You have agreed with qualifications. What does that mean?

Ms Campbell : I was not convinced that that was the only part of the recommendation to clarify that and to make it like Telstra and the other ones, because of the complex nature. This comes back to that part in the report where, in the first part of the audit report, it says we are very different, and then in the recommendations it draws it says 'make it the same'. We agreed that there was an issue there, but we were not convinced that taking it to the way that Qantas and Telstra do it was going to be ideal. So we said we would review but we were not guaranteeing that we would change.

Senator CAMERON: What has happened with this review?

Ms Campbell : This report has been out for not very long. We will review it as part of our normal corporate planning and our strategic planning and in accordance with the KPIs which form part of the portfolio additional estimates and the portfolio budget statement. It will be part of that process.

Senator CAMERON: And the length of time?

Ms Campbell : We have got PAEs later this year.

Senator CAMERON: Do you see this as an issue that is important to deal with?

Ms Campbell : I think all recommendations of the ANAO are important to deal with. That does not mean that we will do exactly what the ANAO have suggested. Their recommendation is to review. We will conduct the review. Depending on where we come to with that review, we may or may not do what the ANAO have suggested.

Senator CAMERON: The performance indicators are always dealt with in consultation with the minister, aren't they?

Ms Campbell : They are, because of the additional estimates

Senator CAMERON: So the minister can make a call on this and say, 'I think this is what should be done.'

Ms Campbell : We provide advice to the minister.

Senator CAMERON: Yes, and the minister can advise you what to do as well.

Ms Campbell : Indeed.

Senator CAMERON: Minister, why would we not move to the industry standard?

Senator Payne: I will work closely with the department on this. I refer to the observation that the secretary made in relation to the context in the report where it begins in its contents by saying that this is a very different service; it is not easily comparable to any other operation. You have cited too where the report says that. Then at the end it says that we should become more like those services in the way we respond. But we do not work in the same sort of business environment. I think that is an important qualification from the secretary. I will work with the department and wait for their advice.

Senator CAMERON: Why don't you just show some leadership and say, 'We should do it because it is helpful to the citizens of this country'?

Senator Payne: That would be a silly thing to do if it would not work.

Senator CAMERON: The ANAO seems to think it works everywhere else.

Senator Payne: The Department of Human Services is not everywhere else. That is the point we have made, repeatedly.

Senator CAMERON: The document that you tabled, this handwritten document

Senator Payne: We have handed it up and not kept a copy. If we could get one from the secretariat, that would be helpful. I do not think it was returned to us.

Senator CAMERON: Do you want a copy of that?

Ms Campbell : It was not returned.

Senator Payne: I do not think it was returned to us.

Senator SIEWERT: We have got five. That is how efficient we are.

Senator Payne: It is stunning efficiency, Senator.

Senator CAMERON: While that is being done. I want to go to page 41 of the ANAO report, table 2.3. It gives the 2013-14 figures in terms of this issue. There is a bit of triage that goes on, isn't there? You have explained that. There is a triage across all of these different telephone line areas.

Mr Tidswell : I am not sure what you mean by 'triage' there.

Senator CAMERON: A triage is when you deal with the most important issues first.

Mr Tidswell : What happens is that we have

Senator CAMERON: Unless there is another

Mr Tidswell : The way the triage works, in a sense, is that we run 50 call lines for Centrelink: 50. The triage starts when people ring a number and then find their way into the IVR. They may well hear information and not have to do anything further and exit that call or they may then wait to speak to an agent in that designated queue.

Senator CAMERON: Let us go to participation solutions on page 41. In the handwritten document that you have handed up you have got 'PST'. I suppose that is 'participation solutions'?

Mr Tidswell : That is right.

Senator CAMERON: 16.08.

Mr Tidswell : Yes.

Senator CAMERON: At 21/5, that is 16.08. The participation solutions figure in table 2.3 show that 52  per  cent of people are waiting more than 30 minutes

Mr Tidswell : Senator

Senator CAMERON: in 2013-14.

Mr Tidswell : Can I

Senator CAMERON: Can you just let me finish?

Mr Tidswell : Sorry.

Senator CAMERON: How does that relate to this figure that you have handed up?

Mr Tidswell : Can I firstly state that you cannot look at these figures and put them into this table. We either concentrate on this table or we look at these figures, because this is for a different time period.

Ms Campbell : This is for 2014-15.

Mr Tidswell : There might be different things that have gone on and changed. I just want to make that statement.

Senator CAMERON: Yes, I understand that.

Mr Tidswell : Basically, what we have got here in table 2.2 on page 41 is that it breaks down

Senator CAMERON: 2.3.

Mr Tidswell : Sorry, 2.3, yes. It breaks down the calls answered over those intervals. Obviously, the figure we have here is for a different time period, but this is the average. Naturally there are calls answered much quicker and there are calls answered beyond the 16. Any normal bell curve distribution occurs. But on this one, this is a really tricky, complex area with high average handle time. It is where a job seeker may well lose their entitlement. We concentrate hard. I will give you an example on this one. We kick in placing a queue on this line if the wait time is over five seconds

Ms Campbell : Five minutes.

Mr Tidswell : Because we know that for a lot of customers it is a really important area for them.

Senator CAMERON: Can I just ask you this question? You had this figure back in 2013-14 of 52 per cent waiting more than 30 minutes. Does that include if they rang up and got an IIE or casual worker? The casual worker picks up the phone and then the transfer takes place. How do you measure the length of that call? Do you measure the length of the call from when the IIE picked it up until it is transferred or do you measure it until that call has been completed?

Mr Tidswell : There are two different things going on here. There is the average handle time of the inquiry load; so there is that period of time. Then there are the participation solution teams. Generally, these are highly trained staff. Generally, I do not think we have IIEs doing this work. So they are our more highly trained people who really understand the employment system and what needs to occur. So, firstly, I do not think there is a transfer involved in these calls, unless you came in on another queue and we discovered that you have a payment participation issue that needs to get sorted out. But, generally, people know this queue very well. Also, and why the figures are better than they have ever been with this queue, we are trying to do more outbound calls to people who we can see are impacted. Where we have advice from the Job Services Australia provider that the jobseeker is not doing what they need to do, we try and make contact with that jobseeker before their payment gets stopped. So we are doing more outbound calls in that line. But the average speed of answer here is really about the time it takes for them to speak to a trained agent.

Senator CAMERON: One area in your response that worries me a bit is this attitude that people can make a choice whether they hang up, hang on or use an app. Lots of people are given no choice. It is not like you are one of the Liberal senators ringing their stockbroker to get some advice. This is a much different proposition, isn't it?

Mr Tidswell : That is why they are placed in queues there, for that purpose, where it is an urgent inquiry. I gave incorrect advice to the committee. In the PSTsparticipation solution teamsit is at 15 seconds. If the wait time is more than 15 seconds, we provide the opportunity for somebody to receive the place in queue call. On the other general business lines, the wait time is five minutes. So we do give that option to people to do that for that urgent inquiry. We do not stipulate that it has to be only urgent, but we give that to them. On top of that, we are open, as you know, right around the country doing 100,000 transaction work and activities in the service centres. So we do provide those avenues for people where there are challenging circumstances.

Senator CAMERON: When was the last time you did a systematic survey of your staff who are answering calls, as to the issues they are facing?

Mr Tidswell : I am not quite sure that we have necessarily done that. We talk to our staff a lotoften also through their representatives. So often we get feedback about how things are going and what is operating. We have our surveys, engagement surveys and other things, where we get feedback about how things are going in that sense. To what extent we ask staff about what calls they are taking, I cannot recall.

Senator CAMERON: But if you are going to deal with these issues, the staff have hardly been mentionedit has been about technological fixes, management system fixes and making management changes. The staff are the key to this and I find it unacceptable that you have not engaged in a systematic way with your staff to talk about these problems, deal with these problems, survey the staff and get some ideas in a systematic waynot just by talking to them.

Ms Campbell : Our managers talk to their staff every day. They have stand-up meetings. If you go to a smart centre, every morning they have a stand-up meeting where a number of the staff representatives come in and talk about what is happening that week: what are they seeing, what is the surge and how can we better deal with what is happening at the moment? So I do not accept that we do not talk to staff. You are suggesting a survey, and we can take that away and consider how that might work. But we engage with staff each and every day, so we do hear what they are saying and we do know what they are seeing in the front line.

Senator CAMERON: Who is doing this? This is your front-line managers, is it?

Ms Campbell : It is.

Senator CAMERON: Are these the same people who put the rat up on the website, or the toilet paper?

Senator Payne: Senator, I have already said that if you are going to buy into that sensationalism then you are just going to cheapen the whole process.

Senator CAMERON: It is not sensationalism; I am not cheapening anything.

Senator Payne: Yes, it is actually.

Senator CAMERON: That is your opinion; it is not mine. So how do you capture that information?

Ms Campbell : The staff who run those smart centres are engaging with their staff, their team leaders, their managers every day and they are hearing that. They feed that back through the processes which Ms Teece runs at the smart centres so that they can get that feedback on how we can improve. Each and every one of our staff and managers want to improve the service we provide to customers. That is what we are trying to achieve all the time.

Senator CAMERON: Can I move to the computer system, Chair?

CHAIR: Just one moment. You have had 20 minutes. I was going to ask some questions, and Senator Siewert is waiting. There is a clarification needed, and then I will come back to you. I have questions on the IT system, as well.

Senator Payne: Senator Cameron made a passing reference to the room where the department can observe all of this activity and so on. My colloquial reference to it would be the control room; Mr Tidswell would have a better term. May I offer to the committee, through you, Chair, an opportunity to visit that location at the Caroline Chisholm offices of the department to get some visual and literal appreciation of some of the sorts of issues we have been talking about today. I am sure the department will facilitate that visit.

CHAIR: Wonderful. I would certainly appreciate that.

Senator CAMERON: I am not a member of the committee.

Senator Payne: I extend that offer to you as well, Senator Cameron.

Senator CAMERON: I may not be able to match my time frame with the committee's. So if the offer is to me as well, I appreciate that. Thanks for that. I would like to make it with the committee, if I could.

Senator Payne: Yes, I understand.

Senator CAMERON: But if I cannot, can we organise something separate?

Senator Payne: I understand. Yes, Senator Cameron.

CHAIR: Wonderful. I want to go to some questions around the new IT system.

Senator SIEWERT: Can I clarify a mistake before we move on? I want to clarify a figure on your handwritten table. For the YAS, do I read that as 21?

Ms Teece : I am sorry; 24:42 as at 24 May.

Senator SIEWERT: So YAS is 24?

Mr Tidswell : It is 24 minutes and 42 seconds at 24 May, 2015, and that is the youth and students queue.

Ms Campbell : That was a decision of the former government, to try to encourage youth and students to take up the digital offerings. So there was a decision on that in a previous budget.

Senator SIEWERT: I just wanted to clarify what that figure was so that I did not misread it. The other thing is: do you have the figureyou may have given it and I missed itfor the number of abandoned calls? We talked about the time frame in which people abandon calls. Do we have the percentage of calls that were abandoned for the year to date?

Mr Tidswell : We do not have that. We could take that for you.

Senator SIEWERT: Could you take that on notice?

Mr Tidswell : We will take that on notice.

Senator SIEWERT: Are you able to give us that before we finish today?

Mr Tidswell : Yes, we can.

Senator SIEWERT: Thank you.

CHAIR: Moving on to the IT system, we are talking about the Welfare Payments Infrastructure Transformation Programme; is that correct?

Ms Campbell : Yes.

CHAIR: The $60.5 million, which is to kick-start the process: are you able to talk us through what that money is exactly for and how that might get the process going?

Ms Campbell : I will ask Mr Shepherd to take us through that detail.

Mr Shepherd : The allocation of funds is specifically for what we call tranche 1 of the program. The major focus, as you can imagine in a program like this, of tranche 1 is procurement activity. So we need to do all the preparatory work around the procurement, we need to engage in the procurement and we need to execute on the procurement. So it is a significant piece of work. Also, as you can imagine in a multi-year program of this size and scale, there is a significant amount of activity to set up the actual programgovernance structures, stakeholder engagement structures, risk management structures. All of that work will occur during tranche 1 as well. The figures we touched on before. During tranche 1 there will also be some delivery that occurs. One of the lessons we learned from a range of large transformation programs is that you have to get on and deliver as well as rebuild the systems. So we will deliver a range of digital enhancements during tranche 1 of the programthe Secretary touched on one of those enhancementsand that is, when people submit digital claims or digital transactions, they want real-time feedback about where they are at. Minister Morrison has talked about the Domino's pizza wheel. When you order the pizza, you see that your order has been submitted, you see when someone is cooking it, you see when it is being delivered. Lo and beholdyou look out of your lounge window because it is telling you, 'It's here'.

Senator CAMERON: By that time, you could have gone out and bought it.

CHAIR: I am going to make comments on the quality of Domino's versus others pizzas.

Senator CAMERON: It is up to Minister Morrison what analogies he uses.

Mr Shepherd : Our customer experience is not that. When they submit their digital claim, we can usually only pass two statuses back to them: 'You have submitted it' and 'It has been completed'. Because of that, they will often ring us or come in and check. Have we received it? Are we processing it? Is the claim completed? So that is one of the deliverables.

CHAIR: When you say that is a deliverable, that is something you would expect to see as an improvement early on?

Mr Shepherd : Yes.

CHAIR: What kind of time frame are we talking about?

Mr Shepherd : Tranche 1 is for 18 months from 1 July. So we will deliver the first deliverablesthe procurement, the program managementall within that first 18 months.

CHAIR: So you are delivering the procurement and all those preparatory things, but then also delivering improvements to the system as you go?

Mr Shepherd : Yes. One of the things we did was go back through the feedback that customers had given us and staff had given us around our digital products. One of the things in that feedback was: 'If I am in your digital channel and I need help, I want to stay in that digital channel to get that help.' So one of the things we are looking at is whether we can use the same sort of technology that other organisations use to get help in the digital channel. It is called 'click to chat'; you might have used it. When you are in the middle of a transaction and you need help, you click to chat and you are actually talking to an operator in a smart centre who is helping you online with your question online. At the moment, the customer experience is that you have to get off your computer and ring us to get that help. But it is sort of counterintuitive if you have already decided to do business online, so we are looking at working on that in our first 18 months.

CHAIR: Just give me a little more detail on this initial spend. You have talked about procurement and upgrades and things. What does that look like in real terms within the department? Has a team of people been established to look after this, and how big is that team?

Mr Shepherd : The spend to get us to the business casebecause a lot of work was done to get us to the business casewas that the government allocated $16.2 million.

CHAIR: That is part of the 60?

Mr Shepherd : That is right.

Ms Campbell : No; the 16 was previously allocated; it is 60 from now on.

Mr Shepherd : It is 60 from now on. The department will have a team of people

Senator CAMERON: You are saying 60?

Mr Shepherd : It is 16.2 for the business

CHAIR: There was the 16 and then the 60.

Mr Shepherd : That is right.

Senator CAMERON: Yes, I get that. I am just trying to be clear where that is in the budget measures. I am on table 1.2.

Ms Campbell : It was two years ago, so it was in budget 2013-14: the business case, $16.2 million.

Senator CAMERON: So this is the previous money that was allocated.

Ms Campbell : Yes, it is previous.

Senator CAMERON: So there is no new money for this computer system?

Ms Campbell : Yes, there is new money.

Senator CAMERON: How much? Is that the 18.6 and the 27.7?

Ms Campbell : Page 19 in the portfolio budget statement.

Senator CAMERON: I am sorry, Chair. I was confused about the money. I am always confused about money!

Senator Payne: Page 19.

Senator CAMERON: Thank you. Where are we?

Senator Payne: Under table 1.2, part 1, just above where it refers to the department of agriculture, there is the welfare payment infrastructure transformation tranche 1.

Senator CAMERON: It is $93.3 million in 2015-16?

Ms Campbell : Yes.

Senator CAMERON: And that is that carried forward money?

Ms Campbell : No. This is new money that the government is providing for the WPIT program.

Senator CAMERON: Then there is $29.3 million in 2016-17. How come you have these savings of $44  million and $64 million in 2017-18 and 2018-19?

Ms Campbell : Pardon?

Senator CAMERON: What are those figures in 2017-18 and 2018-19?

CHAIR: Senator Cameron, if you are going to go into detailed explanations here, I might get you to come back to it because I am assuming it is a slightly different line of questioning.

Senator CAMERON: No problem.

CHAIR: We can come back to that. Just to get a little more clarification, we have this program, particularly over the next 18 months, with all of those activities. Going back to my earlier question, what does that look like within the department? Do we have a new team that is set up? How many people are devoted to it? What does it look like?

Mr Shepherd : There is an extension with the new program, a new team. Resources from the department are being moved into that team to set up the program, to oversee the commercial and procurement activity and to go in on the first deliverables. With the build of that accelerating from 1 July, we have needed to engage in preparatory activity to switch the lights on on 1 July.

CHAIR: How many staff within the department are we talking about in this project team?

Mr Shepherd : I can take the number right now on notice. But the size of the program at the moment is under 100 staff.

CHAIR: Presumably it will grow?

Mr Shepherd : Yes, that is right.

CHAIR: If much of the job is procurement, how much do you need particular expertise when it comes to ICT and the like? How much of that will you bring in in terms of staff and how much will you be contracting out to the private sector?

Mr Shepherd : During the business case phase of the program, it was pretty clear from all large transformation projects that what was required was a blended team of public servants who know the Social Security Act very well, public servants who know our business very well and who understand the service delivery, experts who understand building large ICT systems and experts who understand how to procure those. So already we have some of those experts on board.

CHAIR: Are they on staff?

Mr Shepherd : They are. They are contractors that have been brought in from companies, and a number of them have just rolled off very large procurements of similar type projects, some for very large government clients.

CHAIR: Just going to some of those benefits, you have talked about one of the benefits that you could be seeing early on with that real time. Are there any other benefits of the system for customers that we envisage going forward?

Mr Shepherd : The answerand I will link this back to Senator Siewert's question about digitalis that we will be able to move from an environment where a customer can input something into the department in a digital channel but we actually need to then grab it and do a lot of manual processes to have that actually finalised. This will allow the customer to have that input digitally and we will be able to process the input, the transaction in digital, end-to-end right throughout the process. We are unable to do that because our back-end legacy systems are over 30 years old. They were not built in a time when digital was the way customers transacted with us; they transacted face to face, on paper and on the phone.

While with the front end of our systems we have made a lot of good progress in the digital space, often they are talking to a back-end system which is not able to transact in an automated form. So there is a big benefit there for customers in terms of getting real-time feedback about their applications, about being able to track and monitor how their applications are going and about the ability to be able to do their transactions with government when they want to in their own time. As opposed to many environments and many applications they make, we need to be open on the phone or open in the face-to-face environment.

CHAIR: Is part of this easing the compliance burden for customers in terms of all the forms and various things they have to fill out, whether on line or otherwise?

Mr Shepherd : There is a really big red-tape reduction element to this. You will have customers in your offices telling you how much running around they have to do to collect information to give multiple times to fulfil other requirements of applying for one of our payments. In many circumstances they will be able to do that online. We will be able to help them by providing things like real-time, live links to agencies like the ATO. So you will be able to have, in real time, your income information transmitted from the ATO to us. That cuts out millions and millions of people having to every week tell us what their income is every fortnight, every month or whenever they are paid. So there is a large lowering of compliance for the customer.

At the back end of the system, we will move from a system that still requires a lot of manual intervention to perform the functional compliance to something more akin to the banking industry where the compute power of the back-end systems of the banks does a lot of the heavy lifting of the data, and then the compliance officers apply their high-level skills around analysis. But at the moment a lot of that work, a lot of that data collection, happens via manual intervention. It will be far more automated and far more of the standard than you currently see in the banking and insurance industries.

CHAIR: Are there benefits for staff as we see these improvements?

Mr Shepherd : I do not know whether you have sat in a call centre and watched our staff do a complex transaction across the multiple parts of the portfolio, but let me describe one to you where you sit in the Brisbane call centre and you hear a grandparent ring up and their grandchild has become separated from their parents and you watch the fantastic work that the staff do with the fragmented systems in front of them. They do the Centrelink work from the Centrelink system. They work with the child support elements and the Medicare elements, bringing that together for the staff so that they can focus on and provide a better service to the customers rather than needing to literally slide between different systems to try and provide an end-to-end service. That is a massive benefit to staff.

CHAIR: We will start to see some of these benefits before the 18 months are over? Is that what we anticipate?

Mr Shepherd : That is right. In fact, we have designed in particular those customer interfacing benefits to come out in the first 18 months. The back-end system, the stuff I have just described for staff, that is part of the seven-year program and that is actually transforming the back-end system that they use. Some of that will be slower and will be staged but that is the intention, yes.

CHAIR: What about fraud detection? Will part of the new system build be focused on fraud detection and, if so, how?

Mr Shepherd : The ability that I talked about to be able to use the computer power to do a level of work around that is really key, but I would need to ask the accountable officer, fraud, to come and give the specifics. But like the banks, they transform from a mode where multiple people are pulling together computer data, Excel spreadsheets and analysing it into an environment where the computer power can do a lot of that data collection and initial analysis. Then the officers actually are providing the high-end analytics.

CHAIR: Do we have someone to come and speak about the fraud aspects?

Ms Campbell : I think Mr Withnell is just about to join us at the table.

Mr Withnell : I am not sure if I caught the question.

CHAIR: The question really was about whether or not the new system will improve fraud detection. Tell us a little about how it will do that.

Mr Withnell : I think the system will assist, largely because we will be able to improve some of the monitoring and logging capability. Because the current system is not as stable, when we keep hitting it, if you like, from our systems, that creates problems. So we will actually be able to touch the system far more and, therefore, do the risk profiling we need to do.

CHAIR: What does 'touch the system far more' mean to a lay person? You will be able to 'touch the system a lot more'.

Mr Withnell : If you think of the main system as being herewe have our own systems where we do risk profilewe would take information out of that system, do the risk profile and then decide what to do with it. The more we can keep doing that in real time, the more effective we can be in identifying fraud early and then intervening quickly.

CHAIR: At the moment what is the main impediment to that?

Mr Withnell : The limitations on both systems.

Ms Campbell : This new system will be built with the risk profiling in it whereas, at the moment, it is kind of like an add-on to the old system.

CHAIR: And you have to try to deal with the old, creaky system and you have to make sure that you do not break it when you are doing that?

Senator SIEWERT: Is that for fraud or mistakes?

Mr Withnell : Both.

Senator SIEWERT: But can you tell the difference?

Mr Withnell : Yes.

Senator SIEWERT: You can tell the difference between fraud and mistakes?

Mr Withnell : Sometimes at the early point you cannot and you will have to make some further inquiries to make a distinction between the two, but in general we can.

Senator SIEWERT: Can I ask how? How can you tell?

Mr Withnell : Fraud has intent.

Senator SIEWERT: But how do you know intent from the

Mr Withnell : If a person has created a false identity, they have clearly intended to do something.

Senator SIEWERT: So you can pick up whether or not it is a false identity?

Mr Withnell : Yes. In some we can pick up very clearly that they have intended to actually do something to defraud us. In some, because of the nature of the welfare system, the fraud only becomes apparent over time. Mistakes generally can be quite simply understood. If a person has, for example, declared the same amount of income each fortnight and then in one fortnight it is clear that the decimal point is in the wrong spot, we can have risk profiles that pick that sort of thing up which actually then flag that that is an incorrect amount, potentially.

Ms Campbell : And it would be service recovery rather than a fraud action.

Senator CAMERON: You have analytics that do this now, haven't you?

Mr Withnell : We have analytics that do some of that now, yes.

Ms Campbell : But by building it into the new systems, we think it will be more efficient and more timely.

Senator CAMERON: I will come to that.

CHAIR: No worries. What about customer privacy? What is going to be built into the system to make sure that is protected?

Mr Shepherd : The new system will be built in a way that complies with the government's obligations under privacy legislation as it is today. One of the key, I guess, enhancements around privacy has already started with the development of the MyGov program where consumers actually, on a consent basis, drive what they want to link to. That will be an ongoing feature of the digital journey where, on an ongoing basis, consumers, who are walking with their fingers, want to link the way they do business. But, in terms of privacy, the program will be subject to not only the privacy provisions but also the secrecy provisions and it also will be guided by security policies on how personal information is collected, stored and used. There is nothing unique in that regard.

CHAIR: We are just about at our scheduled break time, so I think we may as well pause for lunch. It will be an early lunch, which means that we have a long afternoon. We will suspend now and come back at one o'clock.

Proceedings suspended from 11 : 58 to 13 : 02

CHAIR: We will recommence. What we are proposing to do is Senator Xenophon has some questions around the Child Support Agency, so we might deal with those questions, and then Senator Cameron will go back to some other areas. Senator Xenophon.

Senator XENOPHON: I will be relatively brief. Ms Campbell, I just want to talk in general terms and put this to the minister. I understand I will be having further discussions with the department and the minister about the broad principles as well, so I will be somewhat circumspect. If I can go to the 2008 Ombudsman report titled Child Support Agency, Department of Human Services: Responding to allegations of customer fraud. The report was initiated because: 'A growing number of complaints to the Commonwealth Ombudsman have raised concerns about the way in which the Child Support Agency, CSA, responds to allegations that one of its customers has provided false or misleading information. ' I know that that is seven years old, and I am happy to get an update from the department in respect of that. It did make some criticisms that the department was wanting with respect to its response when a parent made an allegation that the other person was not telling the truth. The Ombudsman made the statement that the integrity of the child support scheme hinges on the reliability of the evidence on which child support assessments are made, and that it is a core function of the CSA to uphold that principle. Does the department disagree with the Ombudsman's opinion, Ms Campbell?

Ms Campbell : I do not have the Ombudsman's report. Unfortunately I was not in the department in 2008.

Senator XENOPHON: I am not suggesting you were.

Ms Campbell : I will just ask someone to grab it for me so I can see it before I respond.

Senator XENOPHON: Okay. If I can quote directly from the report: 'The integrity of the Child Support Scheme hinges on the reliability of the evidence on which child support assessments are made. ' And it is a 'core function of the CSA to uphold that principle'. I am reading directly from the report.

Ms Campbell : Is that a statement by the Ombudsman?

Senator XENOPHON: It is a statement by the Ombudsman. If you assume for the purpose of the question that I am reading to you a direct statement from the Ombudsman. If that was a statement by the Ombudsman, would that be a principle with which you would agree?

Ms Campbell : I would like to see the context of the quote, and that is why I am trying to get the report, because I was not there in 2008.

Senator Payne: I am not immediately familiar with all of the aspects of that report either.

Senator XENOPHON: It is at page 1 of the executive summary, and maybe I could ask the secretary to run off a couple of copies so that there is no confusion. Can I just speak to you as a general principle?

CHAIR: We might come back to that.

Senator XENOPHON: I think that might be better, Chair. I do not want to put the minister or the agency at any disadvantage.

CHAIR: We will come back to that in a little while. I will go to Senator Cameron.

Senator CAMERON: We were talking about the expenditure. I think you drew my attention to page 19 of the DHS budget statement, table 1.2. Can you explain how this expenditure works over the forward estimates?

Ms Campbell : We have been funded for tranche 1 of the project. There is both an expense measure on page 19, and I am just looking for the capital measure, which is on page 24. There is funding in both of those lines for this measure.

Senator CAMERON: The WPIT?

Ms Campbell : Yes, that is it.

Senator CAMERON: That is a great item.

Ms Campbell : We are hoping people will remember it. Mr Shepherd outlined some of this. We are going back to government after we have commenced. We have a number of these projects that Mr Shepherd talked about that we will deliver in the next 18 months, as well as doing a business case, going to market, determining how the following tranches will be delivered. This is just tranche 1. This is just that business case process as well as some of those digital transformation projects that we talked about. The funding in the expense measure is reflected there in that table on page 19, and then again on page 24, which is the capital money. For example, if we go to page 24 with the capital funding, that funding is for those builds and those constructs that we were talking about before.

Senator CAMERON: So, this is really a small part of the overall project?

Ms Campbell : Yes, it is a small part, the commencement of it.

Senator CAMERON: What is the cost of the project overall, from the business plan?

Ms Campbell : We need to go to the market to determine those costings. Estimates may be commercial-in-confidence, and we need to get the best value we can.

Senator CAMERON: Yes, I understand. But it is significantly higher by some numbers?

Ms Campbell : Yes.

Senator CAMERON: Tell me how the $44,688,000 figure on page 19 kicks in. What is that about?

Ms Campbell : That is a save which, of course, is offset by amounts on page 24. Also, we would expect in 18 months to go back to government with the business case and ask for more money. That money would be appropriated at that point in time.

Senator CAMERON: How do you make a $44 million save in 2017-18 and a $64 million save in 2018-19? What is that save?

Ms Campbell : We are expecting saves in both our ICT operations and our processing operations.

Senator CAMERON: I am genuinely confused about this. We have a business plan, right?

Ms Campbell : Yes.

Senator CAMERON: That was the previous government funding the business plan. It ran through about the first 12 months of this government. The government has received the business plan and made announcements for a $1 billion-plus spend, right?

Ms Campbell : Yes.

Senator CAMERON: You are now saying, and Mr Shepherd outlined some of the projects that were going to take place in that first couple of years.

Ms Campbell : Yes.

Senator CAMERON: With a small amount of money.

Ms Campbell : Yes.

Senator CAMERON: How did you determine to go ahead with those projects without going to the market for the overall business plan?

Ms Campbell : We are going to do most of those projects in house. We are going to commence them in house and we are going to bring in expertise just as we do with all our ICT projects, but managed in house and bring in that expertise.

Senator CAMERON: It is extra funding that you have?

Ms Campbell : Yes.

Senator CAMERON: You will use that funding in house?

Ms Campbell : We will manage it in house. Quite a large proportion of our—

Senator CAMERON: Yes, so it could be external contractual suppliers?

Ms Campbell : Yes, plus all ours.

Senator CAMERON: So the first two years it is about $110 million, $112 million or $113 million?

Ms Campbell : Yes, and that is at the point where we go back to government in that 18 months and we do the market testing. We have been to the market; we can see what are the costs of the next tranche. There are five tranches—tranches 1 to 5—and then we go back to government in a normal procurement methodology where we say we have gone to the market and this is how much it was.

Senator CAMERON: Given this is a seven-year project, why is there no funding allocated over 2017-18, 2018-19?

Ms Campbell : Because we are going to go back to government once we have been to the market to determine that pricing, and go back to government then.

Senator CAMERON: In reality, the big fix, if I can use that colloquial term, that is the ISIS system replacement, really will not commence until sometime in maybe 2017-18 or 2018-19?

Ms Campbell : The 18 months that we have spoken about—we are in 2015 now, and we will go back in 2016 with more detail after we have been to the market. We will go back to government and tell them what the market said, and that is when we would be appropriated more money.

Senator CAMERON: The government has announced a commitment to this, has it not?

Senator Payne: Yes.

Senator CAMERON: That commitment was a $1 billion-plus commitment?

Senator Payne: As the secretary said, until we have actually been to the market and costed through the tranches, there is not a final figure, but you and I and the secretary all know that it is a very significant investment for government in government infrastructure.

Senator CAMERON: Yes. When this is described as the first stage of the Centrelink upgrade, it is not the ISIS system upgrade, is it?

Ms Campbell : We are going to the market to determine the ISIS system upgrade. This enhancement that Mr Shepherd spoke about will be a sort of bolt-on to the ISIS. We will not go into ISIS, but we will sort of have bolt-ons to the outside of it.

Senator CAMERON: This is to try to deal with some shorter term issues?

Ms Campbell : We would be seeking to reuse what we do now as part of the new system as well.

Senator CAMERON: What methodology did you use to come up with these savings of $109 million?

Ms Campbell : We looked at what efficiencies were likely to come from these programs that we were putting in place. It is not dissimilar to what we did with service delivery reform in 2011-12. We did benefits realisation; we looked at how these strategies would produce benefits in our operations.

Senator CAMERON: Is it your understanding that there is a clear commitment to this project?

Ms Campbell : Yes.

Senator CAMERON: There will be funds available in 2017-18 and 2018-19?

Ms Campbell : This is not unlike a number of procurements where money is appropriated to departments for initial phases, and then we go back to government.

Senator CAMERON: Mr Shepherd, you indicated that one of the initiatives would be the click to chat initiative. You looked quite excited when you were talking about that.

Mr Shepherd : My mother-in-law spent an hour and a half telling me how she wanted to click to chat online, so I am very excited.

Senator CAMERON: Does that raise the issue that ANAO raises, and that is that actually online creates more demand for face-to-face or direct contact? So, if you click to chat, someone has to be there to chat?

Ms Campbell : They do, but hopefully they will only have to do it once. Hopefully once they are able to convert that customer on to digital, then we have invested in that transition and they will stay on digital.

Senator CAMERON: Hopefully?

Ms Campbell : That is the whole basis—

Senator CAMERON: Is that the best you can give me?

Ms Campbell : That is what everybody else does. That is what Qantas does. That is what Telstra does. That is the thinking behind click to chat. If we can keep people on the digital channels, they will continue to use them. If they are delighted by the digital channels, it is handy for them and they can do it at any time of the day.

Senator CAMERON: I assume that you are familiar with the business plan?

Ms Campbell : Yes.

Senator CAMERON: I have called on the minister a few times to table or make the business plan public. Minister, can we see the business plan?

Senator Payne: I think I have indicated in previous estimates that the business case is a cabinet document prepared for the express purpose of supporting cabinet to make the decision in relation to the future of the welfare payments ICT system, and as such, as a cabinet document, it is not able to be made available to the committee.

Senator CAMERON: You have the most secretive Minister for Human Services ever.

Senator Payne: My life is an open book.

Senator CAMERON: I am not interested in your life, I am interested in what is happening at Human Services. This is a huge commitment—

Senator Payne: You are right; it is not that interesting, actually.

Senator CAMERON: We will strike that from the record. This is a huge commitment.

Senator Payne: Yes, it is. There is no question about that.

Senator CAMERON: We were told that there is a $1 billion-plus investment. The history of these investments by private sector and public sector is that they can go horribly wrong. That is reality.

Ms Campbell : There are significant challenges in a large ICT transformation project.

Senator CAMERON: One of my concerns is that we seem to be moving on to these little bolt-on platforms immediately without any idea what the hardware solution will be or what is the software solution for the mainframe ISIS system. Was it in the business plan as to how to do that? Was that part of the business plan?

Ms Campbell : The early transformation pieces?

Senator CAMERON: Yes.

Ms Campbell : One of the pieces of feedback we received from a number of large organisations that have undertaken this sort of transformation was: make sure you provide something to the customers early so that they understand that you are actually transforming rather than going away for three to five years and then coming out and saying, 'Wow, look at what we have been working on.' That was advice we received from a number of parties: make sure you had deliverables early and deliverables constantly.

Senator CAMERON: So was that part of the business plan?

Ms Campbell : Yes.

Senator CAMERON: So, get in early, make these changes. This is a minor part of the overall structure. There is something like a $1.7 billion saving on improved compliance measures.

Ms Campbell : Yes.

Senator CAMERON: When will we see those $1.7 billion savings kicking in?

Ms Campbell : I will just get the relevant officers to the table and they can talk about that in more detail.

Senator CAMERON: Does this first tranche have anything to do with that?

Ms Campbell : I do not know that you would say directly linked, but of course it is within the social services portfolio.

Ms Golightly : The $1.7 billion savings is over the forward estimates. The measures start on 1 July this year, 2015.

Senator CAMERON: They start on 1 July. Those measures, as I understood it, were reliant on the new computer system?

Ms Golightly : No, that is not the case.

Senator CAMERON: Tell us how you start making these savings.

Ms Golightly : There is a number of aspects of the measure. The main one is around doing better analysis or more analysis of the data matching that we have in place already with the ATO. We know that, going back for the last three years, there are potential cases that we need to look into. This measure gives us the resourcing to do that.

Senator CAMERON: That is $1.7 billion worth?

Ms Golightly : Yes. There is quite a lot of savings in that part of the measure. That is the main one. There are also other aspects of the measure which will look at people who are not declaring their changes in circumstances or maybe issues of unexplained wealth. But the main one in terms of the saves is around the declaration of income.

Senator CAMERON: Are there any compliance measures in other areas of DHS, such as in Medicare?

Ms Golightly : Yes, this is in addition to what we would normally do.

Senator CAMERON: There is $1.7 billion on top of what you would normally do?

Ms Golightly : That is right.

Senator CAMERON: It was only a $1.7 billion saving factored in the budget papers. Are you telling me it is more?

Ms Golightly : The savings associated with this particular measure are $1.7 billion. Of course we will continue to do the work we normally do, which in itself already produces savings.

Senator CAMERON: If it was so easy to get $1.7 billion, why did you not do it before?

Ms Golightly : The tools that we have had to investigate these particular cases have been very manual based, and we have been doing some. But what this measure does is give us better tools to be able to do those investigations quickly and more efficiently.

Senator CAMERON: What is the cost of this measure?

Ms Golightly : I think it is in the order of $173 million over four years.

Senator CAMERON: Is this further software or hardware?

Ms Golightly : It is for a number of things. It includes some software ICT tools, but it is also for people to actually do the investigations.

Senator CAMERON: So, there are people there as well?

Ms Golightly : Yes.

Senator CAMERON: Is there a business plan on how this works?

Ms Golightly : We will be doing a lot of analysis about where to start, which cases to start with first, and how many we can get through each year, but that work is just starting. The measure commences on 1 July.

Senator CAMERON: So, there is an estimate of $1.7 billion without any business plan, without your starting to do the analysis?

Ms Golightly : No, I am sorry if that is what was gained from that answer.

Senator CAMERON: That is what you said.

Ms Golightly : No, I said—

Senator CAMERON: I thought you were starting.

Ms Golightly : Yes, we are starting our work on 1 July, and I thought you were referring to a business plan going forward. We have done analysis on the cases that we know about, and as I mentioned we have already investigated some of those. On that basis, we are able to extrapolate what the saves might be.

Senator CAMERON: Is this a cost-benefit analysis that you have done?

Ms Golightly : Yes.

Senator CAMERON: How long did it take to develop the cost-benefit analysis?

Mr Withnell : We have been working on this on and off for probably three years. In the initial stages, the cost-benefit analysis did not stack up, because the costs to do it were far greater than the returns or equivalent. What we have looked at with the new available technology and the move to online is a more streamlined process beginning in years 2 and 3 for this measure. That means we can do considerably more interventions at a lesser cost than we would historically.

Senator CAMERON: So, you will do more interventions because you have better technology?

Mr Withnell : Correct.

Senator CAMERON: What is the cost of the technology?

Mr Withnell : The technology is a small component of the measure. I do not have the exact costs, but I think it is around $10 million for a range of IT solutions. That is part of that solution.

Senator CAMERON: Is there some documentation we can have a look at, because I am quite sceptical that $1.7 billion will be achieved over a four-year period; you have invested $10 million in computer software and you have some more management changes and increased staff?

Mr Withnell : Perhaps if I explain a bit more detail. The $1.7 billion largely comes from undeclared income. It is based on information we already have from the Australian Taxation Office. The analysis of that data over three years has identified 1.1 million matches, if you like, using a data match term of people who have declared a different level of income to us than they declared to the tax office.

Senator CAMERON: That is 1.1 million?

Mr Withnell : That is 1.1 million annual matches. It is around 800,000 individuals. Some have matches in multiple years.

Senator CAMERON: So you know that now?

Mr Withnell : We know that now.

Senator CAMERON: Without spending $10 million?

Mr Withnell : We know that now, yes. We need to spend the $10 million to be able to cost-effectively deal with it.

Senator CAMERON: Is this mainly in the welfare area?

Mr Withnell : Yes. It is largely around Newstart, age pension, DSP, carers—anything where there is an income declaration required.

Senator CAMERON: What about in Medicare?

Mr Withnell : No, there is no Medicare involved in this particular measure.

Senator CAMERON: This is just targeting welfare recipients basically?

Mr Withnell : Yes. It is a target on those welfare recipients who have underdeclared their income.

Senator CAMERON: So this is separate software, separate hardware and a separate fix from the main game computer system?

Mr Withnell : It links into what Mr Shepherd has been talking about.

Senator CAMERON: Why did the minister say that the new system would contribute to this?

Mr Withnell : I was just about to explain. There are some elements that sit separately. We do data matching separately from, for example, the main system that Centrelink uses. We have done so for 20-odd years. We also do our risk profiling quite often separately from the Centrelink system. We manage some of our interventions separately, so we are not interfering with the normal service delivery stream. However, some of this requires people to engage with us online. The online environment needs to be part of the mainstream system. Some elements of this will be done in our system, but some of it will be done in the mainstream system.

Senator Payne: You have just referred to my comments about the new system, and the contribution in terms of the new system will significantly streamline the way we are able to do this work, which is what Mr Withnell has just explained.

Senator CAMERON: I got the impression reading your press release that this new system was going to deliver all of these savings, to be honest. That might be how the press release has gone out.

Senator SIEWERT: The PBS were about the savings made from the system.

Ms Campbell : From within the operations of our department.

Senator SIEWERT: No, under the new system, on the page that we were on before, page 19. There are dollars in brackets.

Ms Campbell : While you were out, we also talked about page 24, which deals with the capital elements of this project as well.

Senator CAMERON: Nobody is arguing that, if people are rorting the system, they should not be dealt with, and cheats should be dealt with. But it just seems to me that, after the report that you gave at the last estimates about your integrity system, suddenly we pop up with no mention of your compliance program, 2013-15. You say you have been working on this for three years. Why was it not in your compliance program report?

Ms Campbell : I think Mr Withnell talked about the cost-benefit analysis, that at some point it was going to cost us much more to actually find this information. I think one of the features will be that we will be able to say to people who are currently customers, 'You said this to us. We believe this is the amount you earned. Can you tell us which is correct? Ability to access that information has not always been there. The costs have changed over time, and it is now at a point where it is beneficial to put in place these mechanisms.

Senator CAMERON: You have used analytics for some time?

Ms Campbell : We have used the analytics, but this issue is about being able to do that data match and go out in a digital form to 800,000 customers and say to them, 'We have two different sources of your income. Tell us which is correct.'

Senator CAMERON: Is it possible for you to provide to the committee a cost-benefit analysis that has been done?

Ms Campbell : We can take that on notice.

CHAIR: I will just go to Senator Xenophon as we said we would at 1.30, but I know Senator Siewert has more questions on fraud, so we will come back to fraud, if you like. I have some questions on fraud as well. We will go to Senator Xenophon on Child Support.

Senator XENOPHON: If I can indicate, Ms Campbell, on the last occasion I referred to a specific case. I do not intend to refer to that case. I think it is appropriate at this stage not to. I did get a letter from a resident of Western Australia about a matter which I might refer to obliquely, because I think I was copied in on that. But I might refer to that in the most general of terms. Going back to the Ombudsman's report—and I am sorry I did not provide that to you earlier—the report is seven years old and it related to responding to allegations of customer fraud in the Child Support Agency. The Ombudsman made the statement that the integrity of the Child Support scheme hinges on the reliability of the evidence on which child support assessments are made and that it is a core function of CSA to uphold that principle. I am happy to put this to the minister. As a general principle, that is an unobjectionable reasonable statement?

Ms Campbell : That we should, to the best of our ability, ensure the integrity of that information, yes.

Senator XENOPHON: It is a question of what systems you have in place to try and effectively do that.

Ms Campbell : Indeed.

Senator XENOPHON: The Ombudsman went on to say that 'quality child support assessments rely on the ability of the agency to make people tell the truth and that, if it fails to do that, no decision it reaches can be free from doubt. That is in the report.

Senator Payne: Is that in the conclusions?

Senator XENOPHON: It is. I will just give you the specifics. I did have the executive summary. I am sorry, that was a more general statement in relation to that. As a general principle, in going back to the original statement of the Ombudsman's report, if there are prima facie allegations of false and misleading information being tendered as part of the CSA inquiry, it is a matter that is being sorted out perhaps not harshly but formally by the CSA. So, what happens if a statement is made not necessarily intentionally but recklessly or carelessly by one party? How do you deal with that? I know it is a very difficult area, but what protocols do you have in place to deal with those statements?

Ms Campbell : I will see whether we can find someone who has more knowledge about how we deal with it. Mr Withnell has taken responsibility for the fraud elements, but I think your question is more about day-to-day operations.

Senator XENOPHON: I will just put it in context. The Ombudsman made this observation in the report at page 7:

Centrelink, another service delivery agency within the DHS portfolio with 6.5 million customers, carried out 42,000 fraud related investigations in 2006-07 financial year. This translates to approximately one investigation for every 155 Centrelink customers. By comparison CSA's ratio of fraud investigations is one investigation for every 93,333 customers.

That was an observation made at page 7 of the Ombudsman's report, and then it made a number of observations of when there were matters last prosecuted for fraud under Child Support. They go back to 2007, 1998 and in February 2000.

Ms Campbell : I do not have comparative numbers for 2014 or 2015 at the table.

Senator XENOPHON: I am happy for you to take that on notice.

Ms Campbell : I think we might need to take it on notice. I understand the question, but unfortunately I do not have those numbers here.

Senator XENOPHON: I am relying only on the Ombudsman's report of 2008 that there seems to be a much lower ratio of fraud investigations with one for every 93,000 plus customers compared to one for every 155 Centrelink customers. That could say something about whether there are—

Ms Campbell : That was in 2008?

Senator XENOPHON: 2008; that is right. I am just trying to work out where the ratio is.

Ms Campbell : I hate to make—

Senator Payne: They are quite different environments.

Ms Campbell : Yes. Things have changed quite significantly since 2008 in Child Support. We have many more customers who have private collect relationships than in 2008 where they work it out. They use the formula. They work it out amongst themselves.

Senator XENOPHON: I am happy to take it on notice to show that obviously things have changed significantly.

Ms Campbell : Things have changed and I think it would probably be better for us to get more up-to-date information to give you a much more accurate answer.

Senator XENOPHON: And if you could take on notice an update on CSA referrals to the DPP with respect to section 119 and sections 159 and 159A on the collections provisions.

Ms Campbell : Yes.

Senator XENOPHON: Do you have any idea of what the trend has been?

Ms Campbell : No, I do not have that information. I do not think that there are any officers at the table with that.

Mr Withnell : In terms of referrals to the CDPP, it is a bit up and down year on year, obviously as many of these things are, but certainly in 2013-14 we referred 29 matters to the CDPP in relation to child support.

Senator XENOPHON: So, there is quite significant change from the Ombudsman's report?

Mr Withnell : Correct.

Senator XENOPHON: Can I just point out that Senator David Johnson sought similar answers in 2012. That was question on notice 2159 of October 2012. If I can just refer you to that, because I think the answer to Senator Johnson's question back then was that no matters had been referred to the Commonwealth DPP under sections 159 or 159A of the Child Support Assessment Act of 1989, so it seems that the numbers vary.

In terms of general protocols—and this is not about being punitive—sometimes there might be sloppiness on the part of one of the parties that is not deliberate and it is not even reckless, but there has been perhaps a carelessness in terms of information provided that then leads to a chain of events with all sorts of consequences. What happens in terms of protocols when a customer makes an allegation if not of fraud then of inaccurate or misleading information being provided? I am trying to couch this in fairly gentle terms because that seems to me to be the nub of this.

Mr Volkers : There are a number of mechanisms in the Child Support Scheme. One of the most basic, fundamental ones is that there are two parents always involved in this process so the scheme itself has an almost built in checks and balances mechanism. Many of the issues that are raised by one party will be checked with the other. For example, it might be a change in care so one person will notify us of that change in care. We talk to the other party to check that. Then if there is a dispute we gather evidence and make a decision. That is analogous to a lot of the processes that happen in the Child Support Scheme.

Senator XENOPHON: Is that what happens as a matter of course? Could there sometimes be circumstances where an allegation is made or an assertion is made as to what one partner's income is or their circumstances, the other partner disputes that but there might then be a chain of events that ensues in the absence of having an ability to test the two assertions?

Mr Volkers : I have just used the care example there. In income we will obviously always have the ATO to use as the ultimate in a sense arbiter of what the right income is. We get that daily download from the ATO about the latest income information. If a customer wants to put in an estimate of income, if their income changes, which is an important provision in the scheme to allow us to have the flexibility and respond to a person's change in circumstances, but if they want to put in an estimate we will also look for some information from them to support and accept the estimate that they provide for us. Any change that we make to the assessment notice is issued to both the parents to say, 'This is what we have changed.' Then there are objection rights that are involved and checks and balances in the system in that sense.

Senator XENOPHON: What deterrence is there? I am not necessarily talking about prosecuting people. If a statement has been made that has been reckless or deliberately wrong—and it can be a very highly charged environment—what deterrence is there firstly and what mechanisms are there to try to correct that and perhaps a sanction? I am not necessarily talking about dragging someone through the court and having a conviction to their name, but what mechanisms and what deterrences are there with respect to that?

That leads to another question, which may be a question for the minister. Is this something that needs to be considered, whether there is an alternative approach or something that is less harsh than the current legislation but an easier way with not the same onus of proof that leads to the same outcome; that is, to have a fair assessment?

Mr Volkers : The ultimate penalty in that sense would be once we have obtained the correct information—and let us say we use the income as an example, which is obviously a common one—when we find the correct incomes the assessment is backdated correctly. The new amounts are generated and the penalties are applied to that amount.

Senator XENOPHON: Or conversely, if the information that you are given is that the income is X but it is only half X, what happens then? In other words, if the information given was exaggerated in terms of income?

Mr Volkers : That is quite an unlikely scenario in terms of a paying parent. That would possibly be a receiving parent in that case and essentially it is in reverse. The same sort of situation happens. The assessment goes down and the person has an overpayment. The receiving parent in that case would have an overpayment. That is the checks and balances in the system itself. Probably the main thing that we see is along the lines of non-compliance with a notice or gathering information from third parties. We use those different elements to provide—

Senator XENOPHON: I am coming towards the end. If it is possible to get how it works in terms of the mechanisms with both sides, because there are two sides to a coin. I have constituents who complain to me. Women who have ex-husbands, fathers of their children, who seem to be very well off but because of the way they have set up their affairs through family trusts they get away with paying next to nothing for their kids and then there is the flip side where sometimes the other side happens, although the former seems to be more common than the latter in terms of some men being able to arrange their affairs in a way that they are paying little or nothing in terms of child support, which I find repugnant. Finally, there is a matter that I was cc'd into from a Western Australian resident that was sent to you, Ms Campbell. I am not going to go into too much detail. I might write to you about it. I am sure that you get squillions and probably more than most of us senators in terms of correspondence, which is a lot. I want to be very careful about it. I just want to talk about general principles. It was sent on 28 May. I was copied into it for my sins, I think probably for asking questions in this field.

There was an issue of arrears, an assertion of formal arrears of about $17,800. The case officer conceded a quick review would put the arrears at around $10,000. The customer thought it should be about $3,000. An offer was made of about $6,600. Now there are enforcement proceedings for the full amount when it seems that the case officer considered that it should be a lesser amount. I am very careful. What I am trying to understand is in cases where there appears to be an opportunity to sit down with the parties and where the case officers or the department thinks there is a fair way of resolving this without the cost of a prosecution or enforcement proceedings, what flexibility is there to achieve a fair outcome, particularly for the children?

Ms Campbell : I have received that correspondence and sent it to Mr Volkers to respond to.

Senator XENOPHON: I am not asking specifically. I might write to you separately. It is the general principle. He says the case officer said, 'This is the upper limit. You are only a bit over half that we think.' He says a lesser amount. Do you try to save enforcement costs? Is there an informal mechanism or a mechanism to try to resolve these matters more expeditiously?

Mr Volkers : Absolutely. The way we address all issues in Child Support is that it is an escalated approach. Firstly, it is best if people are not in that debt situation in the first place, but once they are we will talk to them and try to arrange for a suitable payment arrangement. We have guidelines around that. Our staff are trained in having conversations around those things with our customers and set up an arrangement that meets the person's needs but also within the requirements. We are dealing with another person's money here. We want to make sure that the receiving parent has the money to support the kids. Then it is graduated. It might go then to us using more of our notice powers and getting information from third parties or getting payments from third parties. The ultimate is things like litigation action when we take them through court or departure prohibition orders and the like. Those are all at the end of the spectrum. We are always looking to try to get an agreed outcome, even when we are going through a litigation process.

Senator XENOPHON: I know it is a very difficult field. I will put some questions on notice through you, Chair, in terms of issues of legal costs and how much is spent in relation to that about this particular matter that I raised at the last estimates. I look forward to having a discussion with you, Minister, later this week.

Senator Payne: In relation to the recommendations in the Ombudsman's report of 2008, I will also ask the department, in putting together the responses to the questions that we have taken on notice, to put a summary of actions taken since then in the fraud area in particular.

Senator XENOPHON: That would be very helpful.

Senator SIEWERT: I wanted to go back to the fraud issue and compliance as well. Can I ask an overarching question first and that is before everything went online in the old days did you used to have a fraud investigation manual?

Mr Withnell : That is right.

Senator SIEWERT: How long ago did that cease to be one document?

Mr Withnell : It is contained in a number of documents that are available online for our staff to use.

Senator SIEWERT: Now?

Mr Withnell : Now. Some of it is protected and some of it is more publicly available.

Senator SIEWERT: What does 'protected' mean?

Mr Withnell : It deals with controls that we would prefer not to compromise and investigative techniques.

Senator SIEWERT: I am sorry?

Mr Withnell : It deals with some of the controls against fraud that we do not want them to make public.

Senator SIEWERT: Was it previously public?

Mr Withnell : Some of it was.

Senator SIEWERT: So, are you saying that when there was one manual some of it was not public?

Mr Withnell : That is right. Some of it was not made public.

Senator SIEWERT: The same issues that are now not made public?

Mr Withnell : Correct.

Senator SIEWERT: So, those bits that were previously public are still public?

Mr Withnell : We do not publish them as such. They are not published, for example, on the internet or anything like that.

Senator SIEWERT: Are they publicly available?

Mr Withnell : We do not generally make them publicly available.

Senator SIEWERT: Now I am—

Mr Withnell : If we were asked specifically for them we may be able to make elements of them public, but we do not, as a general rule, publish the actual fraud investigation manual.

Senator SIEWERT: So, people that want to understand what processes you undertake are not able to access that information?

Mr Withnell : Some of that information they could access.

Senator SIEWERT: Can you table for me the information that is accessible?

Mr Withnell : Yes.

Senator SIEWERT: Do you have a map of the process that you are now undertaking?

Mr Withnell : There are several maps, because there are multiple processes depending on what the problem is. We need to be clear that there is not one type of fraud.

Senator SIEWERT: I understand that.

Mr Withnell : And there is not one way of conducting the—

Senator SIEWERT: I was thinking of a higher principle map.

Mr Withnell : We may have a flow. We will see what we can do.

Ms Golightly : We will get something together for you.

Senator SIEWERT: That would be appreciated. You do not make the entire process available and you never have? Is that the message I take from that?

Mr Withnell : Correct.

Ms Golightly : That is correct.

Senator SIEWERT: Will that include in the process that is publicly available the current investigation, selection and prioritisation guidelines?

Mr Withnell : For fraud investigations or more broadly for compliance?

Senator SIEWERT: More broadly for compliance or for fraud and compliance.

Mr Withnell : More broadly for compliance they generally relate to data matching activity and some risk profiling in relation to the data matching activity. Fraud can be more difficult because the information may come from other sources, including law enforcement. The actual case prioritisation can vary quite widely in fraud, given the nature of the activity itself and given the nature of some of the material that we have available to us. In terms of compliance, generally, that is much more straightforward to be able to deal with that for you.

Senator SIEWERT: Can you take both of those issues on notice?

Mr Withnell : We will see what we can provide.

Senator SIEWERT: Do you provide the intelligence assessment template?

Mr Withnell : To whom do we provide them?

Senator SIEWERT: The one that you use.

Mr Withnell : Yes, but who do we provide it to?

Ms Golightly : Are you asking whether we provide it publicly?

Senator SIEWERT: No. I beg your pardon. Can you provide the committee with one?

Mr Withnell : We can provide you with a template.

Senator SIEWERT: I am sorry I was not clear. You have already taken the process with serious non-compliance and then investigation. Could you provide that as well?

Mr Withnell : Much of that is in what you call the fraud investigation manual. Some of it is more difficult because it is integrated to our case management system, but we will just have to see what we can pull out that is useful.

Senator SIEWERT: If you can, that would be useful and if you could include that when you are providing the maps of the process.

Ms Golightly : We will point that one out.

Senator SIEWERT: Tell me if this was asked when I was in another meeting. I could not get here for the restart at 1 o'clock. I was listening when I came in, in terms of the discussion about the process. There seems to be some misunderstanding. I think I share Senator Cameron's misunderstanding about what the process is with the new IT system and what I understood that came out of budget night, also subsequent media and the packages of materials that were provided on budget night that clearly linked the improvement in the system with savings in compliance. I think it was a substantial amount of money. Unfortunately I did not bring one of the glossies up with me, but it clearly says it in there or it can clearly be inferred from that document that that is a large part of what the system was about.

Mr Withnell : Probably the easiest way to describe it is that most of the strengthening integrity in the welfare system measure deals with historic overpayments but also provides some money for development into the future, which will connect into the welfare payment infrastructure.

Senator SIEWERT: I am having trouble hearing you.

Mr Withnell : With the budget measure most of the savings are historic overpayments, so they are overpayments that have already occurred. Those savings, in a sense, are retrospective because they have already occurred. In terms of benefits going forward there is a small amount of funding within the compliance measure which allows us to take advantage into the future of the developments in the welfare payment infrastructure transformation program.

Senator SIEWERT: I will come back to the historic overpayments in a moment. Is that the $20 million?

Mr Withnell : Of which? I am not clear on your question.

Senator SIEWERT: Is that money allowing you to take advantage of the new system?

Mr Withnell : It is a relatively small amount. I do not have the exact figure. I could get the exact figure for you on notice to break it down.

Senator SIEWERT: I heard $20 million being thrown around so I apologise if that is a misleading figure. Are you able to provide it before we finish?

Mr Withnell : Those that allow us to take advantage of the developments in the WPIT program. We can certainly provide that.

Ms Golightly : It is also the case that the WPIT program, the new technology, will be able to help us to do other things in compliance over and above what this particular measure does, so both statements are true.

Senator CAMERON: How do you know that if you do not have a business plan?

Ms Golightly : I think Mr Shepherd mentioned the new system will allow us, for example, to have a lot better real-time interaction with the customer. We will be able to do things like pre-fill fields from information that we already know and get them to confirm it. All of that will go to help to stop error or indeed fraud. Down the track we will also have better real-time interaction with the tax office as well, for example. That takes us forward from what we have now.

Senator SIEWERT: This goes back to the historic overpayments. Some of the errors and the processes, whether you call it fraud or where we have talked about before where people have made honest mistakes with processing of when they are putting in their income and so on, is that based on the estimates that you are making?

Ms Golightly : The estimates are savings for the specific fraud measure that Mr Withnell has been talking about. It is purely based on the historical cases where we know that someone has declared a different income to the tax office than to us. It is completely separate to the error-type issue.

Senator SIEWERT: I understand that. That is where I am going. So, in terms of the comment that you just made to Senator Cameron, where you said, 'We'll now be able to do it in real time', part of what the process has been is people making genuine mistakes and also the department making mistakes where data was not put into the system. Is that what you are using for those estimates of how you get the not wilful non-compliance but you can still say it is non-compliance but not deliberate non-compliance?

Ms Golightly : Yes. I am not sure that I was talking about the estimates, but what I was trying to explain is that the new WPIT system will absolutely have benefits in terms of reducing that sort of error.

Senator SIEWERT: I understood that. There is information about quite big claims of savings that have been made.

Ms Campbell : We have just had a look at the glossy and the website where it says 'Fairness of benefits'. It talks about the transformation program, which talks about the initial $60 million and then welfare system integrity, which has the proposal that has just been discussed here. The proposal and the higher education loan program for recovering from people who are overseas and the changes to PPL. They were side by side so there was a—

Senator SIEWERT: And they all add up to $1.7 billion?

Ms Campbell : I have not got that.

Ms Golightly : No, the $1.7 is purely to do with the business integrity measure.

Senator SIEWERT: Which is the fraud?

Mr Withnell : It is both.

Ms Campbell : I think the net number is $1.5 billion, because it is $1.7 billion in savings and $200 million in expenses, which is a net $1.5 billion.

Senator SIEWERT: It is the $1.7 billion that I was talking about in terms of savings.

Ms Golightly : That is to do with the business fraud measure. Those $1.7 billion savings are not to do with WPIT.

Senator SIEWERT: Just so that I am clear, are you saying that there will be additional savings because of WPIT for all those reasons that you have just articulated?

Ms Golightly : I am saying that there will definitely be benefits in terms of accuracy. It will be preventing errors. You cannot estimate how many that will be.

Senator SIEWERT: In other words, the money that is articulated in the budget statement is all about the—

Ms Golightly : The $1.7 billion.

Senator SIEWERT: Is it just a benefit that is uncosted of avoiding some of those mistakes?

Ms Golightly : That is correct. For WPIT, yes.

Senator SIEWERT: That is clearer now.

Ms Campbell : It is just that WPIT was on the same page in the glossy. We are looking at the glossy now and we can see why there would be some confusion.

Senator SIEWERT: Can I then go to the compliance measure? Is that where I ask about the compliance measure and the senior policeman coming on board?

Ms Campbell : This is a good opportunity.

Senator SIEWERT: Can we go through that in terms of the cost and the process?

Ms Golightly : As part of the same measure, as well as using the better tools for the income matching with the tax office, another part of the measure is to do a lot more investigations as well on the ground. That could look at not just income but more broadly at changes in circumstances more generally that may not be declared to us. That might go to things like where people are single or partnered and a whole lot of other things. Also, unexplained wealth. We will do a lot more investigations on the ground into other compliance issues. That work will be headed up by a senior AFP officer.

Senator SIEWERT: Will they be seconded to the department?

Ms Golightly : That is correct.

Senator SIEWERT: What is that costing?

Ms Golightly : I could get you that, but that is part of the overall $200 million that we mentioned as the cost.

Senator SIEWERT: If you could take it on notice about the specifics of how much it is going to cost?

Ms Golightly : Yes.

Senator SIEWERT: Could you take us through how that officer would then go about looking at changes in circumstances, unexplained wealth and those sorts of things? What would be the process there?

Mr Withnell : We have done a range of analysis, as we have indicated previously. What we have identified are some locations where we believe there is a high risk of people with overpayments. In some instances that seems to be quite systematic and quite organised, but in some instances less so. It is focusing in on those areas. It will be quite different depending on what we perceive as the risk in terms of how they may go about that, but I would see it as a range of integrated strategies, one of which will be an investigative strategy.

Senator SIEWERT: Investigative as in?

Mr Withnell : As in conducting a potential criminal investigation. Some others would be more compliance related activities. Some may be broader activities in terms of how people view the welfare system.

Senator SIEWERT: What does that mean?

Mr Withnell : We know in some locations that there is a more general view that rorting the welfare system may be okay and so changing people's—

Senator SIEWERT: What areas are you talking about?

Mr Withnell : We have not publicly identified the locations as yet, but there are some places. We get that from tip-offs, for example, that there is a general perception so it is changing people's view about the welfare system.

Senator SIEWERT: Are you talking about physical locations around Australia?

Mr Withnell : Yes. I can give you one example that we have had in the media. Some work we have done with family day care educators. One of the things that concerned us there was that many of the family day care educators and others were telling us that people were being informed they did not have to declare the income they earned to Centrelink even though they were receiving welfare benefits.

Senator SIEWERT: Do you mean the family day carers?

Mr Withnell : The family day care educators. So, when we had a number of tip-offs in that regard then we started to look at that whole activity more generally.

Senator CAMERON: Where you see this as systematic is this a problem where people do not genuinely understand the system or are getting bad advice or are you seeing that there is some massive conspiracy to defraud?

Mr Withnell : I would say it is the third. I would not call it a mass conspiracy. I think there are small groups who are organised in terms of how they work to rip off the system, if you like.

Senator CAMERON: How much money is involved in that aspect that you have just raised?

Mr Withnell : It is always difficult to predict with fraud, because it is one of those things that is both invisible and we are dealing with active opponents.

Senator CAMERON: If that is the case, how do you then figure that you are going to get $1.7 billion?

Mr Withnell : That is largely the people that we know of that have already underdeclared their income. That is not necessarily fraud, but in some instances it may be.

Senator SIEWERT: Is that the historic overpayments?

Mr Withnell : Correct.

Senator SIEWERT: So, when you are talking about historic overpayments are you talking about the genuine mistakes with overpayments? Were you actually talking about the cases that we are talking about now?

Mr Withnell : I am talking about anyone who has failed to declare the income that they are required to tell us about.

Ms Golightly : The historical mismatches were people have told the tax office one income and told us something different. Proving whether that is fraud is another issue again, because you have to prove intent. Some of it might be fraud.

Senator SIEWERT: So, there is the process about getting the money back?

Ms Golightly : That is right.

Senator SIEWERT: And then there is the fraud investigation?

Ms Golightly : That is right.

Mr Withnell : That is right.

Senator SIEWERT: Are they the main compliance measures in the budget?

Ms Golightly : They are the main ones, yes.

Senator SIEWERT: Are there other ones?

Ms Golightly : We are going to have a look at working with AUSTRAC, for example, to help us with some other data matching. Mr Withnell can perhaps talk about that.

Mr Withnell : We already have an arrangement with AUSTRAC, but it is very manual so we are looking at a much more automated system that will streamline that, particularly where people appear to have significant wealth but are declaring very low levels of income. That is one element of it. Again, it is relatively small compared to the ones we have spoken about. We are also going to have a look at some strategies we might use in relation to students and study load.

Senator SIEWERT: Students and study load?

Mr Withnell : Study load.

Senator SIEWERT: What is that?

Mr Withnell : If students declare their study load incorrectly that can lead to overpayments, for example, if a student drops out of half of their study load that can impact on whether they are eligible. If they fail to tell us then they incur a significant debt if they continue on say for the rest of the year. We are looking at ways we can intervene earlier in relation to that.

Senator SIEWERT: Any others?

Mr Withnell : We are looking at the way we intervene with students and some other things we already do, and how we might broaden those which, again, would allow us to take advantage over time of the WPIT program.

Ms Golightly : And extend that early intervention to other benefits from what we learn with students and what works. We will have a look at incorporating that in the WPIT program.

Senator SIEWERT: Is that all part of the $200 million?

Mr Withnell : Yes.

Ms Golightly : For students, yes.

Senator SIEWERT: Presumably that is not going to involve AFP?

Ms Golightly : No. As Mr Withnell said, those last couple are the smaller parts of the measure. The main parts of the measure are the first two things that we spoke about.

Mr Withnell : I think it would be fair to say with the measure there are those big parts but the other parts are allowing or helping us to start modernising some of our compliance activity, which will then help us to integrate more effectively with the program over time and with a focus on earlier intervention; therefore, being able to prevent debts rather than recover debts at a later time.

Senator SIEWERT: Is that why some of the measures appear to have a small return, in spending $3 to make $1? Is that why those appear to be, in the short term, a smaller return because you are investing in early intervention?

Mr Withnell : Yes. Early intervention is hard to calculate. The current model for calculating assumes a level of debt which is then extrapolated over a period of time. If you do not have a debt you do not get a dollar figure. However, in some we have looked at different ways of calculating that. We do have one early intervention measure that is now in its third year and on our calculations that has prevented nearly $200 million in debt.

Senator SIEWERT: Which one is that?

Mr Withnell : It was about three years ago. It is for people commencing work. It is early intervention for people commencing work. It is people who are starting work. What we do is intervene as soon as we are aware they are starting work and help them get their income declarations correct. What we have found is that over 80 per cent remain correct for the next 12 months or beyond and so they are then not incurring a debt.

Senator SIEWERT: I remember that one. Was that $200 million?

Mr Withnell : It is getting close to $200 million so far.

Senator SIEWERT: Thank you.

Ms Campbell : Chair, I have some answers to questions that were asked earlier this morning, if that would be useful.

CHAIR: Certainly.

Ms Campbell : Senator Siewert was asking about the number of abandoned calls year to date.

Senator SIEWERT: Yes.

Ms Campbell : It is 6.5 million. It is about 17.9 per cent of the calls.

Senator SIEWERT: Is it 6.5 million?

Ms Campbell : Yes. It is about 17.9 per cent of calls compared to 2013-14, which was 18 per cent so very much on par.

Senator SIEWERT: The number of abandoned calls is about the same?

Ms Campbell : The same.

Senator SIEWERT: I should have asked at the time about unanswered calls.

Ms Campbell : We will come back to you on that.

Senator SIEWERT: I should have asked that before.

Ms Campbell : We will see whether we can get that for you. Senator Cameron asked us to ask the Finance Department and they provided some advice back on scoping studies. I will read what they have provided:

Scoping studies are independent reviews to government about its entities and activities and contain significant commercial information, the release of which would prejudice the government's commercial interests. The practice of both this and previous governments has been not to publicly release such reports. It should be noted that Australian Hearing is a commercially exposed business operation which operates largely in a competitive market where there are another 250 competing providers.

As outlined by the Finance Minister in his media release of 8 May 2015, the government has not made any decisions on the scoping study at this stage. The government has committed to carry out further consultations with the deaf community on the implications of the introduction of the National Disability Insurance Scheme for government funded hearing services which will significantly change the way hearing services are delivered to community service obligation client groups, regardless of ownership of Australian Hearing.

The consultations will also include the relevant findings of the scoping study into Australian Hearing.

CHAIR: Thank you. Just following up on the fraud and compliance issues. There was a story last night on A Current Affair. It was about a person who fraudulently claimed her dead mother's pension and was convicted. I just wanted to get to the bottom of it, because it involved a fake ID. I am just wondering how that was able to happen and what is in place now to make sure that sort of stuff would not happen in the future.

Mr Withnell : The false ID was created, from memory, back in 1973.

CHAIR: 1973?

Mr Withnell : I think it was 1973, but it may have been earlier than that. It was certainly some time ago. The proof of identity arrangements within the Centrelink program became more robust around 2000. Prior to that it was far more difficult in terms of proof of identity arrangements. In terms of where we have got to, there are two things that are worth talking about. The first is difficult to go into detail, but we have a number of ways in which we are now identifying longstanding identity frauds within the system. We have had a number of projects in relation to that over the last few years which have been quite successful in finding these long established identities.

The second is in terms of our current arrangements. We are trialling the document verification service which will enable us to verify source documents for proof of identity back to the original agency that created the document, for example, Births, Deaths & Marriages. That will allow us to do a real-time verification of the authenticity of the document so the ability to fabricate identities in the system will be far reduced.

We also do a range of other risk profiling on a constant basis looking for false identities that are coming into the system. We have far more robust controls around that whole issue now that have been building since 2000 and have continued to evolve, both to stop false identities getting into the system but also some methods of identifying those that were established before those more rigorous controls were in place.

CHAIR: In this case I think it was a quarter of a million dollar fraud over 20 years. Are you able to tell us how that was detected?

Mr Withnell : If we were to tell you how it was detected it may make it easier for others to circumvent that control.

CHAIR: I understand. Thank you very much.

Senator CAMERON: I want to go to your annual report on page 142, and this issue of the secondment of a federal police officer as if it is something new. At page 142 of your annual report it talks about the department 'works with the Federal Police to promote a high level of program integrity'. It is not just program integrity. It is a high level of program integrity. You confirm that again in estimates last time when we were talking about the role of the Federal Police and Customs and your overall integrity program. The impression I got from all of your answers was that there was engagement with the Federal Police and there was a high level of integrity, and that is confirmed in that report.

It goes on to say on page 143, 'The department consults with a wide range of stakeholders such as the Federal Police, the ATO, the Australian Transaction Reports and Analysis Centre, the AUSTRAC, the AMA, College of General Practitioners, Pharmacy Guild' and on it goes. On page 148 it says, 'The Australian Federal Police supports the department's fraud control effort.' We had nine seconded federal agents working with the department during 2013. Are these all second rate Federal Police officers where you needed to put someone else in to actually get it all under control?

Ms Campbell : The police commissioner and I are working on the secondment of a senior AFP officer. These are excellent officers that we have currently seconded, but we are looking for a more senior officer at the SES equivalent level.

Senator CAMERON: It seems like a bit of froth and bubble to me. So, you have had nine Federal Police officers seconded last year and that is into your Financial Intelligence Assessment Team. That goes on as well?

Mr Withnell : We have a lot of links to the AFP and to other agencies. We have people like my own staff seconded to the AFP and seconded to the Australian Crime Commission and other agencies for various tasks including the Financial Intelligence Assessment Team. We also have AFP officers seconded to us and we often do exchanges with other agencies in a sense to build on the expertise they have and to skill up our own staff. People coming in have different views of how we might go about these things and I think it is useful for us to think of different ways in which we might tackle some of the problems.

Ms Campbell : I could add that the seconded police officer at the SES level will lead this work. They will lead this taskforce.

Senator CAMERON: So, you will have all the indians and no chiefs?

Ms Campbell : I am sorry?

Senator CAMERON: There were nine of these Federal Police officers. You said you had nine working with you.

Senator Payne: It is a different job. It is a different task.

Ms Campbell : We have this new taskforce. The nine police who were previously seconded and continue to be seconded are working in the business integrity area led by Mr Withnell. This is a new taskforce which will be led by a senior police officer.

Senator CAMERON: The minister's press release on 10 April really links the crackdown on welfare cheats, according to Minister Morrison, saying that the system is going to help stop the rot. The system would be in place for seven years and you are going to have two years before you even start the new system. I will leave it at that. It just seems to me that it is a bit of imaginative thinking that you are going to get $1.7 billion out of this. Let us see what happens.

Ms Campbell : They are different programs. We have worked through that, but they are different measures. They are vastly different.

Senator CAMERON: That is not how it was presented, but that is another story. I would like to come back to the actual system itself. Will the IT program kick in, in two years time, when you start building the mainframe?

Ms Campbell : It will start from 1 July. Mr Shepherd talked about those four projects. There are four projects which will start in the next 18 months. During that 18 months we will be going to the market to determine the platform and how we are going to deliver the system. Then we will be going back to government with those costings on what it will cost to do that replacement.

Senator CAMERON: How does the Senate keep itself abreast of what is happening with this given that you claim commercial-in-confidence for the previous business plan? I assume you do not have a business plan ready for the main project commencing in two years time?

Ms Campbell : We will go to the market and take those soundings about how much it is going to cost and how we will go about building this. The Senate will be informed, because before we can build it we need to be appropriated funds. Those appropriations will be documented in the portfolio budget statement and in the appropriation bills.

Senator CAMERON: But there is a difference from appropriating funds and an understanding of what is happening.

Senator Payne: We are able to ask questions about appropriations.

Senator CAMERON: I am asking questions and you keep telling me it is a secret because it is commercial-in-confidence.

Ms Campbell : I think we have articulated what the money that has currently been appropriated will be used for. When we go to the next phase and government hopefully agrees to that process and if we are appropriated funds then we will be able to outline what those funds are for.

Senator CAMERON: The minister has already made an announcement that there will be $1.1 billion spent on this system that you do not have a business plan for.

Ms Campbell : I do not think that we have ever said we did not have a business plan. We said that there was a plan that went to government, that the plan involved some production over the next 18 months and it also involves us going to the market to determine and to get someone to work with us to build the system.

Senator CAMERON: So, over this next seven years are you in a position to provide those key achievement points in the build?

Senator Payne: In the build?

Senator CAMERON: In the build of the new system.

Senator Payne: I was just trying to clarify the word you used.

Senator CAMERON: The build. That is what you call it when you build a system.

Senator Payne: I did not hear you.

Ms Campbell : We have broken it into five tranches. We have talked today about tranche 1. As part of tranche 1 we are going to the market for tranche 2 and when we have gone to the market, to ensure the commercial integrity of that process, then we will be in a better position to talk about what is going to happen in tranche 2.

Senator CAMERON: So, you cannot tell us about what is in tranche 2. How many tranches do you have?

Ms Campbell : Five tranches.

Senator CAMERON: What are those five tranches?

Mr Shepherd : We can be very detailed about tranche 1, because we understand the nature of the activities, program activities and the things outlined. We will actually build them ourselves so we understand how long that will take with the resourcing requirement, the detailed milestones and when they will be delivered. During the procurement phase one of the things we will do is go out to the market and say, 'The department has the following task. Come back to us with proposals around how you might approach that.' They will come back with proposals around resourcing, costs and timeframes and then we will, as part of the commercial negotiation, bid those down and come back to the government with advice around the plan for tranches 2 and beyond.

We developed, as part of the two-year process, an idea about how to phase these tranches and that was deeply informed by the consultations we did with others. The very firm advice we got was to start a tranche 1 with some customer facing deliverables and across the replacement of the back end system, to do that in a very methodical and careful way, with payment by payment by payment. How the market might respond to that challenge we will not find out until we go out to market through the processes of the tranches.

Senator CAMERON: You say you have five tranches?

Mr Shepherd : Yes.

Senator CAMERON: What is the headline for each one of those tranches and are there tender documents associated with each one of those tranches?

Ms Campbell : No, not yet. We are working through the procurement for tranche 1 at the moment. That is what we are doing.

Senator CAMERON: Let us forget about tranche 1. Tranche 1 is a minor change which has got linkages. We were told it is a bolt on to the main build. Let us talk about the main build. You have told us plenty about tranche 1. You have told us a lot about a smaller thing. I want to know about the main game. So, there are four tranches to come.

Ms Campbell : Tranche 1 includes the procurement for those latter tranches. We are working with our procurement advisers and going to the market for those later tranches as part of the next 18 months.

Senator CAMERON: So, what are you looking to procure?

Mr Shepherd : We are looking to procure a software product and a systems integrator to help configure that software product to meet the challenges that we have with replacement of the core Centrelink system, for example. So, across that challenge there are four. We know what they are. We have got an idea about logical sequence, but once again we need to go to the market because the vendor community will have ideas around how to meet those challenges.

Senator CAMERON: I am not arguing that you do not have to go to the market. I am not arguing that for one minute. Of course you have to go to the market, but you indicated you have five tranches in this project. You must have some overarching view of what each tranche will deliver, whether you go to the market or not.

Mr Shepherd : Yes, we do.

Senator CAMERON: And you call for tenders based on that parameter.

Mr Shepherd : We do.

Senator CAMERON: Do you have details of the parameters for each tranche of work that we can have a look at?

Ms Campbell : That forms part of the business case which we have talked about and the commercial-in-confidence nature of the business.

Senator CAMERON: What is the commercial-in-confidence? You are putting it out to public tender.

Ms Campbell : We are going to put it out to tender one at a time. We are going to go out and what we get when we go out in the next six to 18 months may change what the subsequent tranches are. Yes, the business case detailed that so the first procurement that Mr Shepherd has spoken about, which is about the platform, the software, and an integrator for that.

Senator CAMERON: Let us come back briefly to that first tranche and not the PR stuff that you are doing to make it look as if you are doing something. The issue is ensuring that we will get a business plan moving forward. Is that in that first tranche?

Ms Campbell : The first thing we are doing is the four very important customer facing functions as well as going to the market to procure a software platform and a system integrator to commence—and rather than say tranche—the first bit of the work that we are doing.

Senator CAMERON: When you talk about a system integrator, and I am not in any way an expert on this, but you have software and you have got hardware that drives the software. What is the system integrator?

Mr Shepherd : This is actually a key lesson in relation to the situation with ISIS. The issues with the system that we have is we are the only kind in the welfare space in the world. The only other kind is the Pentagon. So, when we go out for product what we will get is a product that will usually be one of the global providers. We will put their product up and that comes as a general product that you then need to configure to the business rules of the Australian social welfare system. It is that configuration and integration with the existing system that you need a systems integrator to do. The product in itself does not deliver on the welfare payment system. You actually need to have this.

Now, this has been a tried and tested approach by companies like the Commonwealth Bank of Australia. They went and bought a product and then they brought that project down to Australia to configure that product to meet all of the regulations and rules within the financial service sector. It was also pretty clear that when we went through the process of talking to other people who run these last transformations that if you do this in the right way, you sector a product that is manufactured and used by multiple people and then configured for your rules in your own country, you lessen the chance of being stuck with a system that only works for you and being responsible for all of its upgrade and all of its future investment, which is the situation that we are currently in. When I am trying to make sense of all of this I liken it to—

Senator CAMERON: When you are trying to make sense of it.

Senator Payne: For other people.

Senator CAMERON: So, when you are trying to make sense of it for me?

Senator Payne: Such as your good self.

Mr Shepherd : You will use a HR system in parliament and you will use a finance system in parliament. A lot of that system will come from a product that is actually globally the same everywhere. It just gets tailored for your HR rules and your finance rules and the organisation where you use it but two-thirds of that is actually a product which is used by other people.

Senator CAMERON: Does that mean that you are going out for this internationally recognised system, if that is the one?

Ms Campbell : An off-the-shelf product that we can then customise.

Senator CAMERON: Like Holden and Ford do with an international base for their car. They build on it for each country. Is it something like that? They do different things. There could be a left-hand drive.

Ms Campbell : I am not as well across the car industry as you.

Senator CAMERON: It sounds like that is what this is. You have a broad base that is internationally used and it will be customised.

Ms Campbell : Configured.

Senator CAMERON: Customised and configured. Would it be both?

Ms Campbell : The important thing about the configuration is what we used to do in the past was build it from scratch so then you had to maintain it from scratch, whereas if you buy a platform it is maintained and updated over time and you can configure into it.

Senator Payne: I would like to do two things. Firstly, I would like to ask Mr Shepherd to perhaps speak briefly about the engagement with business that we have undertaken in advance of getting to this point. Secondly, if you are interested, to provide an offer of a briefing to you without commercial-in-confidence material about this.

Senator CAMERON: Sure, but that briefing was out of commercial-in-confidence, as long as there are no restrictions on the briefing in terms of the issues—

Senator Payne: Without the commercial-in-confidence material.

Senator CAMERON: Let's see how worthwhile that is without any commercial-in-confidence.

Senator Payne: All right. The offer is there.

Senator CAMERON: I am happy to take up that offer.

Senator Payne: If I could ask Mr Shepherd to give some context—

Senator CAMERON: Just before Mr Shepherd does that, can I also ask him to indicate what are the opportunities for local suppliers of software, system integration and hardware systems within Australia? What have you done specifically to do with that?

Mr Shepherd : Perhaps I will deal with the first question and then come back.

Senator Payne: No, answer this question first.

Mr Shepherd : At the last estimates you asked me to articulate what our engagement had been with the department and the minister in particular on this issue. The engagement with the then Department of Industry, Innovation, Climate Change, Science Research and Tertiary Education—we have a shorter name now—started in August 2013. We actually went as a matter of course at the beginning of the business case to every agency, fronted up, told them what the business case exercise would be about, invited them for their input, and flagged to them that we would be coming back once we had developed further detail for their further engagement. The now Department of Industry and Science was involved in quite an in-depth session around designing the business case. They put this issue and they asked to provide support for us around their thinking through this issue then, and we have had subsequent meetings on 9 February, 16 February, 26 March, 8 April and 27 May with the department on this issue. As part of the tranche 1 activity, we need to go to market. When we go to market, we need to do that in compliance with our policy on this issue. The Department of Industry has given us support to make sure that what we do is absolutely compliant.

Senator CAMERON: Not so much compliance; I am more interested in opportunity for Australian business.

Senator Payne: It is about providing opportunity for small and medium enterprises in Australia to have involvement in that program. That is what the process with industry is about.

Senator CAMERON: So that will be part of the tender documents?

Mr Shepherd : There are policies that stipulate the words that we have to use. There are also practical ways in which we can facilitate that by providing additional briefings, for example, to make sure that industry in its broadest sense, including in Australia are aware. Perhaps as a nice segue to—

Senator CAMERON: So industry in Australia will be aware. All the industry knows that there is a $1.1 billion project out there. What I am asking is what can we do, within the constraints of cost, quality and delivery, to maximise Australian jobs , Australian IT advancement, what can we do with this $1.1 billion spend to do that?

Senator Payne: The engagement with the Department of Industry is about the participation of Australian industries, small and medium enterprises in particular, in the WPIT activities—I am using the acronym—the opportunities for small and medium enterprises in future procurement and the capacity for the potential to upskill Australian industry and workers as a result of this significantly large program. They are very specific engagements with industry. Industry brings the players, if you like, or the SMEs back towards us, and it becomes a discussion at least between the two departments. We have been very careful about that.

Senator CAMERON: Will that be reflected in the tender documents?

Senator Payne: I think that remains to be seen. But that is the whole point of these discussions, to make sure we cover off these points which we know are of great concern to you and, in fact, every member of the House of Representatives I have ever met, because of their own constituencies.

Senator CAMERON: I think that is right. I am not saying that I am the only one concerned.

Senator Payne: No, it is very important.

Senator CAMERON: Everyone, including you. There is no argument about that. Is the tender for the business plan going out in the first tranche?

Mr Shepherd : This is the RFT for the different tranches to build. We are looking at post 1 July. We would have to take on notice as to the actual time and sequences to be worked through.

Senator CAMERON: I am just worried that there might be a lot of talk between DHS and the Department of Industry, and they would put out a tender and it is all forgotten about. That is what I am concerned about.

Senator Payne: This is integral to what we are doing. It will not be forgotten about.

Senator CAMERON: It is integral. Can you explain to me how that integral approach is reflected in the tender documents?

Senator Payne: The tender documents are not yet finalised.

Senator CAMERON: I know that. That is why I am asking. There is no use asking after it if it is not there.

Senator Payne: I think Mr Shepherd has been through a monthly set of meetings with you, beginning in February and stretching to 27 May, which are a consistent part of this process to ensure that that engagement is there.

Senator CAMERON: Can this be part of the briefing that I get?

Senator Payne: We will take that on notice and try to incorporate that, yes.

CHAIR: We need to wrap up this section here, Senator Cameron. Others are waiting. Are you done with that one?

Senator CAMERON: Yes. I have other issues I want to move to.

CHAIR: Sure. That is no problem. We will come back to you. Senator Reynolds has been waiting.

Senator REYNOLDS: I would like to move on to the enterprise agreement negotiations if I could. Last time you appeared, you gave us an update at the time on the agreement negotiations. I would just like to run through a number of questions to give us an idea of where it is up to today. Can you remind us when the bargaining process began?

Mr Hutson : The bargaining process formally began with the issue of our notice of employee representational rights, which as I recall was May. I am just looking for the exact date. The issue of the notice of employee representational rights was on 3 June 2014.

Senator REYNOLDS: How many meetings have been conducted to date since that time?

Mr Hutson : Bargaining meetings?

Senator REYNOLDS: Yes.

Mr Hutson : I believe the answer to that is 36.

Senator REYNOLDS: So, 36 meetings in just under 12 months—or just over 12 months now, in fact?

Mr Hutson : Yes.

Senator REYNOLDS: How many offers have been put to staff as of today?

Mr Hutson : We have tabled two offers to staff in that time. We tabled one in July 2014 which we were seeking to put to staff, and following some action that occurred in Fair Work Australia, that did not formally go to a vote. We put a second offer to staff in February this year, and following some staff feedback, the secretary indicated at the last estimates that we were going to reconsider that offer. That is the current situation.

Senator REYNOLDS: You were going to reconsider the offer?

Mr Hutson : Yes.

Senator REYNOLDS: What has happened since then?

Ms Campbell : We have worked on that offer and we currently have another offer with the Public Service Commission for consideration.

Senator REYNOLDS: When did that go to the Public Service Commission?

Mr Hutson : That would have gone to the Public Service Commission on 27 May.

Senator REYNOLDS: What was the most recent offer? What were some of the key elements of the one that—

Mr Hutson : The key elements of the February offer?

Senator REYNOLDS: Yes.

Mr Hutson : I will ask Ms Talbot to take you through some of the key details.

Senator CAMERON: The February offer was the one that was rejected that is under reconsideration, is it?

Ms Campbell : It has not been rejected. We put the February offer on the table. As in all good faith bargaining, we had significant feedback on elements of it, and I said at the last estimates hearing that we would take it away and consider those. We have continued to work with our bargaining representatives, and we have now worked up another proposal which is currently with the Public Service Commission, which we will then put on the table.

Senator CAMERON: Which went on 27 May?

Ms Campbell : Yes.

Senator CAMERON: What is the point of going over the February offer if that is not what is being considered?

Senator REYNOLDS: Chair, if I were allowed to continue my questioning?

CHAIR: Yes, I thought it was just a quick interjection.

Senator CAMERON: I was trying to help you.

Senator REYNOLDS: Thank you very much, Senator Cameron, but I think I am absolutely capable of asking my own questions. But thank you for the very kind offer to assist me with my questions.

Senator CAMERON: Any time.

CHAIR: I have no doubt. Please proceed.

Senator REYNOLDS: Thank you.

Ms Talbot : The February pay offer was for a total general pay increase of 4.15 per cent over three years, which average out at about 1.4 per cent per year. It was headlined by a general pay increase in 2015 of 1.5 per cent, 1.5 per cent in 2016, and 1.15 per cent in 2017, which provides the total of 4.15 per cent. The other element was salary advancement for the three years of 0.5 per cent, which meant a total of 1.5 per cent salary advancement for those staff eligible to receive it.

Senator REYNOLDS: Is that on top of the general pay increase?

Ms Talbot : That is correct.

Ms Campbell : But not for all staff.

Ms Talbot : No.

Ms Campbell : No, only for those who are not at the top of the band.

Ms Talbot : About 38 per cent of staff were eligible for salary advancement at that point in time.

Senator CAMERON: Did you say that was 0.5 per cent?

Ms Talbot : Yes.

Senator REYNOLDS: With respect to that agreement that was put in February—not withdrawn but reconsidered in February—what would have been the implementation date for that, had it been accepted?

Ms Talbot : That would have depended on when we entered what is called the access period in terms of the length of time that we provided for staff to consider the pay offer. Then it is dependent on a successful outcome of a vote. The next element, if the vote is successful, is when it is actually endorsed by the Fair Work Commission. Some of those timeframes depend on how long that can take.

Senator REYNOLDS: Is it safe to say that, throughout that process, would the agreement have been implemented by now? Is it generally one month, three months—

Ms Talbot : It could take anywhere from I guess six to maybe 10 weeks, just depending on how long it is taking for the Fair Work Commission to assess, and how long the access period was. But it would have been implemented by now.

Senator REYNOLDS: Assuming it had gone through at the usual rate, even if it was at the outside of the eight weeks, your staff now would have been receiving an increase in pay?

Ms Talbot : That is correct.

Senator REYNOLDS: So, they now have an indeterminate period of time when they are actually getting paid less than they would have been had the agreement gone through; is that correct?

Ms Talbot : Yes.

Senator REYNOLDS: Last time you were here you talked about some protected industrial action. Can you give us an update on what action has occurred?

Ms Campbell : While the officers are getting the details, we have had a number of actions including not wearing the corporate wardrobe, coordinated lunchbreaks, reading out statements to customers, providing statements with a piece of paper detailing that the staff member was involved in industrial action.

Senator REYNOLDS: Just on that, if they were reading that out over the phone, would that have exacerbated the call wait times?

Ms Campbell : It would have extended the average handling time and, yes, that would have led to longer waits.

Senator REYNOLDS: Do you know how many clients were subject to this extended wait, how long the script was, and how much it may have extended people's time waiting?

Ms Campbell : As to the average handling time, we can talk about how many minutes or how long it took.

Ms Talbot : Since last estimates, we have had two periods of industrial action. The first period was from 30 March to 10 April. We received a notice of industrial action every day from 30 March up until 10 April. The notice identified five identical actions: coordinated lunchbreaks for the whole department, ban on the use of auxiliary codes, which are codes that indicate an individual is following their planned schedule for a particular day by staffing scheduled environment, bans on wearing the corporate uniform—that is only for those staff who are in face-to-face customer service, providing customers with CPSU verbal authorised statement for staff receiving inbound calls, and providing customers with a CPSU written authorised statement which was only at 26 sites. This period included two double lodgement periods, two public holidays over the Easter break, school holidays, and we had very high leave ceilings, given the time—

Ms Campbell : Can I just outline what a double lodgement date is?

Senator REYNOLDS: Thank you, yes.

Ms Campbell : Double lodgement dates are when we know we have a public holiday and customers would need to report their earnings on the public holiday. But because we are not operating on the public holiday, we bring that earnings lodgement date generally forward, so we have two lots of lodgements on that date, which means we have an increase in activity on those double lodgement dates. It is kind of to deal with our normal essential work that we would do on a public holiday.

Senator REYNOLDS: Which is clearly designed to impact on your clients?

Ms Campbell : They are very high usage days of our services.

Senator REYNOLDS: They gave notice of five actions. The first one you said was a coordinated lunchbreak, which means pretty much that the people all go off at the same time?

Ms Campbell : Yes.

Senator REYNOLDS: That would mean that all of your clients who use your telephone—does that include your call centre staff?

Ms Campbell : This is for union members, not all staff.

Senator REYNOLDS: So, call centre people in your offices. Does it affect the people who are sort of doing the internet work?

Ms Campbell : Generally we have managed by allocating other staff to fulfil what are essential tasks during those periods. For example, with the coordinated lunchbreaks, I think it is fair to say that a small number of offices have had to close over lunch to deal with this action. It has been two or three I think on a few days, for example. I think it was Horsham, Moree and Merimbula.

Senator REYNOLDS: Would the lunchtime be one of your peak periods, when people actually either ring in because they are on a lunchbreak or they can sort of pop around to the office and see you?

Ms Campbell : It is a busy period.

Senator REYNOLDS: The first one is a coordinated lunchbreak, which is clearly designed to cause maximum inconvenience to Centrelink clients. The second one was auxiliary codes. I do not really understand that. Is that actually just something internal or is that something that also has an impact on your clients?

Mr Hutson : That would really be internal.

Senator REYNOLDS: So that is internal, okay. So, one is designed to really stuff up your clients. The second one is to stuff up the other staff in the office with these auxiliary codes, whatever they are. The third one was the uniforms; is that right?

Mr Hutson : That is right.

Senator REYNOLDS: Apart from a bit of civil disobedience, I guess it is also a bit of a show of disrespect. So, clients coming in and not having people properly dressed—to me, I think that is just a show of disrespect to your clients. What was No. 4?

Senator CAMERON: A joke!

Senator REYNOLDS: You might consider it a joke, but—

Senator CAMERON: Senator, how would you know what these staff are doing is disrespectful. You would not have a clue.

Senator REYNOLDS: Please, Chair. It may be uncomfortable to you, but we are not on shopfloor right now, Senator Cameron, and please—

Senator CAMERON: I am happy for you—

Senator REYNOLDS: —give me the respect and give the department the respect for answering the questions.

Senator CAMERON: I am happy for you to keep going.

Senator REYNOLDS: You get heard in silence, no matter how outrageous your questions are, so please give me the same courtesy, Senator Cameron.

CHAIR: Well said.

Senator CAMERON: Keep going.

Senator REYNOLDS: You can bully me all you like and talk over me, but I deserve the same respect you do, Senator Cameron.

Senator CAMERON: I am not bullying you.

Senator REYNOLDS: Yes, you are.

CHAIR: You have been heard in silence. No-one has interjected on your questions. We do not comment on the quality of your questions or otherwise. Please allow Senator Reynolds to continue.

Senator REYNOLDS: Thank you, Chair. Can you remind me what the fourth action was?

Mr Hutson : The fourth was providing customers with a CPSU verbal authorised statement for staff who receive inbound calls.

Senator REYNOLDS: So, that is a verbal statement. If someone rings up and says, 'Can you please help me with this issue?', presumably from the clients in great distress and great need through to pretty much any inquiry, how long is this statement? Do you have a copy of it?

Mr Hutson : I might have a copy of it.

Senator REYNOLDS: Otherwise if you could table it for us. Is it one sentence?

Mr Hutson : It took about 20 seconds to read that.

Senator REYNOLDS: So before they say, 'Hello, my name is, whatever else, how can we help you? What can we do for you?', they get a 20-second written statement which delays their assistance, but also I guess this is where it would impact on your phone time?

Ms Talbot : On that average handling time, depending on how many do it.

Senator REYNOLDS: So, two of them are internal sort of stuff up your colleagues at work. We have had two that are absolutely directed at your clients by subjecting them not only to the message but also to delays and telephone calls. The fifth one was the phone statement. What was the last one?

Ms Talbot : Providing customers with a CPSU written authorised statement, which was at 26 sites.

Senator REYNOLDS: How did that work? This is actually at your offices?

Ms Talbot : It was a photocopy that was handed out by service centre staff.

Senator REYNOLDS: So, these are your clients again who are coming in to seek advice and assistance in your offices. They are greeted at the door, and I have seen how friendly the guys are there with their iPads and, 'How can we help you?' and 'What can we do?' Is it those people or somebody else who is handing them out at the door?

Ms Talbot : It would have been staff that were participating in the action. It is only members of the CPSU that are eligible to participate.

Senator REYNOLDS: Out of those five actions, three of them clearly were designed to inconvenience your customers? Not great staff customer service, I would have thought. We have had those two periods of industrial action since then—

Senator CAMERON: How good they are—

Senator REYNOLDS: Please, Senator Cameron.

Senator CAMERON: I just know how good they are.

CHAIR: Senator Cameron, allow Senator Reynolds to keep asking questions, please.

Mr Hutson : Those actions were in respect of the first period of industrial action.

Senator REYNOLDS: So those five ones were just for the first?

Mr Hutson : Yes.

Senator REYNOLDS: What was the second one, then?

Ms Talbot : The second period of industrial action was from 12 May to 21 May. There were four identical actions. They were coordinated lunchbreaks again, a ban on the use of auxiliary codes, a ban on wearing corporate uniforms, providing customers with a CPSU written statement. Then on 18 May we had notification of a stoppage of work for one hour commencing at 1130 hours local time and ending at 1230 hours local time.

Senator REYNOLDS: So, all union members just downed tools?

Ms Campbell : All those who participated.

Ms Talbot : It applied to the entire department, but it did exclude those that were in the National Emergency Call Centre or the Australian Organ Donor Register or Authorised Medical Personnel line.

Senator REYNOLDS: That was during the period from February, when you were reconsidering, through to May when you put forward a revised offer?

Ms Campbell : We have not put forward the revised offer to the bargaining room yet.

Senator REYNOLDS: But it has gone to the Public Service Commission?

Ms Campbell : Yes.

Senator REYNOLDS: I had heard reports, and you did not mention it here, that people had unscheduled absences from work as part of this action. During the past 12 months, have you had an increase in unscheduled, unauthorised absences, or whatever is the terminology in your agreement?

Mr Hutson : 'Unscheduled absences' is the term which is used to describe a variety of different leave types, primarily concerned with personal and carers leave. That number has been pretty stable over the past 12 months.

Senator REYNOLDS: So it has stayed the same?

Mr Hutson : It has been pretty stable. It is not totally stable.

Senator REYNOLDS: I cannot recall the date, but I recall reading in Perth that there had been a story that tens of thousands of Centrelink staff had participated in this industrial action, primarily designed against your clients. Is there any truth to these numbers that tens of thousands of your staff were engaged?

Mr Hutson : No. Certainly not tens of thousands. The numbers that participated have varied depending upon the action and depending upon the location. But it would not be true to say tens of thousands. If I can talk about the first period we talked about, which ran at about Easter, the percentage of staff who participated in the action over that two-week period was fairly low. Some 9 per cent of staff participated in coordinated lunchbreaks, 8 per cent of staff participated in the use of auxiliary codes, and less than 15 per cent of face-to-face staff participated in the ban on corporate uniforms. Of the 753 staff who could participate in providing customers with a CPSU written statement, only 23 per cent did so. Less than 2 per cent of staff participated in providing customers with the CPSU verbal statement.

Senator REYNOLDS: Less than 2 per cent. I do not have your total staffing here at hand, but that is significantly less than tens of thousands.

Mr Hutson : Indeed.

Ms Campbell : It is quite a small number.

Mr Hutson : Very small numbers.

Senator REYNOLDS: One final area I would like to talk about is something that has received a bit of media attention. I am sure I heard Senator Cameron raise with you earlier the issue of 'rats', apparently somewhat pejoratively. Could you explain to me this issue of the icons?

Ms Campbell : We have a system which I think is called Total View that records what people are doing within their day. There are icons, mainly used in the SmartCentre space—an icon for allocating what they are actually doing with that period of time. It came to our attention that a relatively junior staff member, when they had been allocating icons to protected industrial action, had chosen a mouse to be the icon for protected industrial action. Immediately it came to our attention, we changed it. We then changed it to a piece of paper, which some representatives felt was like toilet paper, so we immediately changed it again. There was no intentional disrespect to our staff members. I have put out a staff note and apologised for the offence taken, and that it was unintentional. That was published in TheCanberra Times. Someone passed it to TheCanberra Times and it was published the next day.

Senator REYNOLDS: Presumably, given there is a wide range of tasks that people perform, how many icons would you have in the system?

Ms Campbell : Mr Tidswell will take us through it, but there are over 200, and I have suggested that we go through and check that we can get rid of the animals.

Senator REYNOLDS: Any version of paper, clearly notebooks, papers, any Mickey Mouses or anything else.

Ms Campbell : Letters like P and U we are hoping will not offend.

Mr Tidswell : We had 270 of them.

Senator REYNOLDS: So 270 icons?

Mr Tidswell : Yes.

Senator REYNOLDS: As to the selection of the icon, with there being so many of them and you are adding and subtracting them, presumably it is not an issue at the secretary level of the FAS level in terms of what icon of these 270 goes to what item?

Ms Campbell : No. I think it is fair to say that I first learned of icons when the 'rat' issue was raised, and I have now reviewed said icon and it is a mouse, but it was removed as soon as—

Senator CAMERON: Looks like a rat to me.

Ms Campbell : We have another picture of—

Unidentified speaker: Well, you are in the New South Wales Labor Party.

Senator CAMERON: You would know all about it with a brown paper bag, wouldn't you?

Ms Campbell : We did not mean any offence whatsoever. This was a junior staff member who, when we talked about it, thought it was cute and innocuous. But we can now understand that others have taken offence and we have acted immediately.

Senator REYNOLDS: So it was a junior staff member who is probably quite mortified by all of this attention. You identified it, you corrected it, so no more animals, and no more pieces of paper?

Ms Campbell : Mr Tidswell is reviewing icons, I am sure.

Senator REYNOLDS: If you need that many, you will clearly run out of the alphabet. You will clearly run out of all sorts of different icons.

Mr Tidswell : We code the leave for the staff member or their breaks, so it is important for the team leaders and the staff to understand what their schedule is and where they ought to be at certain times. The staff member, as Ms Campbell says, a very junior staff member, thought it was a cute and relatively easily observable symbol. It is very small on your screen. It does not sit there very big, so it was considered by them to be very harmless.

Senator REYNOLDS: My characterisation of what you have just told the committee is that it is a sensationalist much to do about nothing story; that is my take of what you said.

Ms Campbell : Yes, that is right.

Senator CAMERON: I will be brief on the bargaining. You gave an outline of some of the offers that were on the table, but you did not go to the whole package that was put forward last time, did you?

Ms Campbell : We can go through more detail if you would like.

Senator CAMERON: You have already done that. You have done it on notice to me, but just for the record, we cannot leave the impression, can we, that what was responded to in terms of the questions was the whole story. It was not, was it?

Ms Campbell : There is more detail we can go through if you like.

Senator CAMERON: Yes. So, you wanted to increase the working hours from 37 and a half to 40 hours per week?

Ms Campbell : To the standard, yes.

Senator CAMERON: You wanted to reduce the accrual of personal carers leave from 18 days to 15 days?

Ms Campbell : Yes, to address our unscheduled absence issue.

Senator CAMERON: You wanted to maintain a workforce profile target ratio of one executive level staff member to nine APS members even though the staff had absolutely no control over that issue?

Ms Campbell : As we said at the last estimates hearing, we took that on board, realised that was the case and we are seeking to change that at the moment.

Senator CAMERON: You have changed the eligibility rules for higher duties allowance from no minimum periods to periods greater than 10 continuous working days?

Ms Campbell : And we are working with the bargaining room about changes to that proposal as well.

Senator CAMERON: You wanted to reduce the preparation and pack-up time for employees in scheduled environments from 15 minutes a day to 10 minutes?

Ms Campbell : We have worked with the bargaining reps and they have sought us to broaden that definition.

Senator CAMERON: At least now we have the whole picture there. That is good. Now, the mouse icon or whatever it was. It was either a relatively junior person or a very junior person. There were two different stories from two different officers. What was the level of this person?

Ms Campbell : APS 5.

Senator CAMERON: Who else had access to this icon?

Ms Campbell : Mr Tidswell can give more details on who accesses icons in this system.

Mr Tidswell : About November last year the spectre of protected and unprotected industrial action became a reality as a result of—

Senator CAMERON: I do not need an explanation. All I am asking is who else is accessing.

Mr Tidswell : Basically at that time we had to put in place icons in our Total View scheduling system for this new activity. As Ms Campbell said, it was at the APS 5 level. That is where we had this task delegated to. We have since raised that delegation to a more senior officer so they can look at the total picture of the icons. We do this all the time. Things change with different coding. It has never surfaced as an issue.

Senator CAMERON: Do not panic. You have answered my question. Was there anyone else that had access to these icons other than the APS 5 officer?

Mr Tidswell : It was literally a simple task. Somebody said, 'We need to do this.' It would have been followed through. It would have been sent through to the team for that team to do it.

Senator CAMERON: It is a simple question.

Mr Tidswell : As far as I know—

Senator CAMERON: Who else had access?

Mr Tidswell : I am not sure what 'access' means.

Senator CAMERON: Who else could have put the rat up on that?

Mr Tidswell : I think at that stage it was at that APS 5 level.

Senator CAMERON: Only an APS 5 person?

Mr Tidswell : But obviously there would be a chain of command to say, 'We need to put this into the system.' The choosing of the icon was at a very low level, because it seemed to be such a simple task.

CHAIR: It was not a subcommittee fault.

Senator CAMERON: No subcommittee.

Ms Campbell : No subcommittee.

Senator CAMERON: You have put a revised proposition to the Public Service Commissioner for approval on the bargaining. Has that offer been discussed with the CPSU and the bargaining reps?

Ms Campbell : The proposal we have has been informed by the discussions we have been having in the bargaining room but it is yet, in its totality, to be put to the bargaining room so we have sent it to the Public Service Commission to ensure that we adhere to the framework.

Senator CAMERON: So, it has to go through the bureaucracy first?

Ms Campbell : It has to go through the appropriate process.

Senator CAMERON: The bureaucracy. Are you aware that the Public Service Commissioner has made an offer to the staff in the Public Service Commission of 1.5 per cent a year with no trade-offs?

Ms Campbell : I am aware that that has been reported in the Canberra Times, but given the quality of that reporting from my own circumstances I am not sure whether that is true or not.

Senator CAMERON: In your proposal that you have put to the Public Service are there still concessions that you are seeking from the staff?

Ms Campbell : My understanding is that under the Fair Work Act we are not to talk publicly about it until it has gone to the bargaining room, because we are trying to adhere to the good faith bargaining principles.

Senator CAMERON: Who made this rule?

Ms Campbell : I think it is in the Fair Work Act.

Senator CAMERON: In the Fair Work Act?

Ms Campbell : I need to bargain in good faith and, therefore, need to present any proposal publicly in the first instance.

Senator CAMERON: The Public Service has not been bargaining in good faith now for a year and a half so why would this be an issue for you now?

Ms Campbell : We have been bargaining in good faith.

Senator CAMERON: You do not have the capacity to bargain with your employees, do you, without external interference?

Senator REYNOLDS: The unions?

Senator CAMERON: No. We are talking about the Public Service Commission and the minister. That is what we are talking about.

Ms Campbell : We bargain in good faith within the framework that has been provided by the government. This has been the case for many years under a number of governments.

Senator CAMERON: When do you expect to have a response from the Public Service Commissioner?

Ms Campbell : We would hope in the next couple of weeks.

Senator CAMERON: When did you put it in?

Ms Campbell : I think we sent it on 27 May.

Senator CAMERON: So, it could be up to three weeks before you get a response?

Ms Campbell : I have not spoken with the commissioner myself, but we are very keen. We are working very closely with the commission to get a response as quickly as possible.

Senator CAMERON: Which will be three weeks. I think I will leave it at that. Hopefully you are not proceeding with more concessions given that the Public Service Commissioner is showing the lead on this. Has there been a change in the definition of 'productivity'?

Ms Campbell : There has been some additional material provided on interpreting the productivity requirements and we have worked closely with the Public Service Commission.

Senator Payne: Please do not do this to me again.

Senator CAMERON: 'Productivity' was one thing at last estimates. It is a different thing at this estimates. Is that correct?

Senator Payne: Do me a favour and just take the Hansard from Employment estimates.

Senator CAMERON: You are here. I have got you.

Ms Campbell : We are working closely with the Public Service Commission on the interpretation of the framework.

Senator CAMERON: That really is Monty Python, is it not?

Ms Campbell : We are working to get the best proposal we can for our staff.

Senator CAMERON: I know we all want to get to other issues. Just fix this, Ms Campbell, please.

CHAIR: We will take that as a comment. I know that on this issue Senator Reynolds has one quick follow-up from her earlier questioning. Have you finished with the bargaining?

Senator CAMERON: We will see where it leads.

Senator REYNOLDS: I just wanted to pick up the point about the agreements. The first one was put a month after, so going back to July-August last year. Have you worked out how much your staff would be losing every month because of the fact that they have not had a pay increase come into effect for the last 12 months, had that first agreement or even the second agreement been accepted? Presumably it is still going to be several months more now before anything is finalised for your staff? Have you done any costings on the cost to staff?

Mr Hutson : In the offer that we were proposing—

Senator REYNOLDS: The first one?

Mr Hutson : The first offer, which was for the first year. We will just check on the amount. The proposal was that would kick in from 1 September.

Senator REYNOLDS: Let us say that first one had gone through. Have you got a couple of different salary bands, just to give us an idea, by month since September last year of how much your staff have lost out?

Ms Talbot : I can give you an example of the February pay proposal in terms of what the salary would have been for a staff member. For an APS 4, who was not at the top of their salary band, from 1 July 2013 their salary was $62,493 per annum. The pay scenario—if the department met its workforce profile target ratio, the person would receive the general pay increase of 1.5 per cent, which was $937, and a salary advancement payment of 0.5 per cent, which was $317. That meant their total 2015 yearly salary was $63,747.

Senator REYNOLDS: So, that is about $1,300 for someone who is in the mid-range of a standard APS 4?

Ms Talbot : It is $1,250 extra.

Senator REYNOLDS: So, pretty much all of your APS 4s since that time had that gone through over this 12 months have now missed out on over $1,200 in salary and those who were entitled to the additional salary advancement bonus would have missed out on even more than that?

Ms Talbot : It was $1,200 over general pay increase plus salary advancement combined.

Senator REYNOLDS: That is under the first agreement. What about under the second agreement?

Ms Talbot : That was the February pay offer.

Senator REYNOLDS: That was February.

Ms Talbot : I do not believe I have the figures for the July pay offer.

Senator REYNOLDS: What was the total bill across the department for what has not been paid to staff?

Mr Hutson : What has not been paid to staff?

Senator REYNOLDS: Yes. What is the total cost to the department?

Senator Payne: Do you mean a total amount?

Senator REYNOLDS: A total amount, yes.

Senator Payne: That would have been paid?

Senator REYNOLDS: Yes.

Ms Campbell : I am just working out what the percentage is. There has been moneys not paid out in the order of at least $30 million.

Ms Talbot : I do not have that.

Senator REYNOLDS: Did you say $30 million?

Ms Campbell : We will identify that figure and come back.

Senator REYNOLDS: If you could take that on notice.

CHAIR: Yes, take it on notice to get it right.

Senator REYNOLDS: Do you say a rough quantum of $30 million has not gone to your staff because of the delays of this process?

Ms Campbell : We will get that for you.

Senator REYNOLDS: You will get the correct figure for me?

Ms Campbell : Yes.

Senator REYNOLDS: I am just picking up a point from Senator Cameron. In terms of what you were just giving evidence on you are saying the department has accorded with the Fair Work Act. You are also going through a process that I presume every other Commonwealth department would go through in terms of the process so there is nothing unusual or nothing out of the ordinary with the process that you are going through?

Ms Campbell : No.

Senator REYNOLDS: So, you are not the only department attempting to do things in good faith?

Ms Campbell : No.

Senator REYNOLDS: Thank you.

Senator CAMERON: The process is extraordinarily bizarre, is it?

Ms Campbell : I am sorry, I did not understand that question.

Senator REYNOLDS: I do not think it was a question.

Senator CAMERON: The process is extraordinarily bizarre. I will just follow up on that. Given that you have been so helpful in calculating what could have been a pay increase, can you also calculate the quantum that would have been transferred from employees back to the department arising from all of the increased work hours, reducing the accrual of personal carers leave, the changing in the eligibility for higher duties and reducing preparation and pack-up time? Has that been calculated?

Ms Campbell : It has. That is calculated.

Senator CAMERON: If you can give us that as well.

Mr Hutson : We have that for February.

Ms Campbell : We can talk about the proposal that we put on the table in February if you would like to talk about that.

Senator CAMERON: I am just after the cost to the employee of those proposals.

Mr Hutson : We have the value of the productivity from each of those measures.

Senator CAMERON: Can you run through them? This is not productivity. This is a transfer of conditions from the staff and savings back to the government. It is not productivity. The definition changes every estimates anyway.

Ms Talbot : For the increase in working hours the productivity saving was approximately $95 million.

Senator CAMERON: So, $95 million goes from the staff to the department?

Ms Campbell : This is over the three-year life of the agreement.

Senator CAMERON: Yes. It is $95 million. It is $30 million a year from the staff to the department.

Ms Campbell : The $30 million was not over a full year.

Senator CAMERON: Personal carers leave?

Ms Talbot : Reducing the accrual of personal carers leave was $2.1 million.

Senator CAMERON: So, another $2.1 million against the pay increase.

Ms Talbot : Reducing incremental salary advancement was $76 million.

Senator CAMERON: Where are you? Is that the change in the eligibility of higher duties?

Mr Hutson : No. In the previous agreement we had a salary advancement of 2.75 per cent and in the February offer we were proposing to reduce that to 0.5 per cent.

Senator CAMERON: That was not in the response to my question on notice. Do you know why?

Ms Talbot : We can get the question on notice and have a look to see whether it has categorised under another heading.

Senator CAMERON: Just run that one past me again.

Mr Hutson : Reducing the incremental salary advancement from 2.75 per cent to 0.5 per cent per annum.

Senator CAMERON: How much?

Mr Hutson : It is $76,200,000.

Senator CAMERON: From the employees back to the department.

Ms Talbot : The workforce reprofiling target was $38 million.

Senator CAMERON: Is that the executive level staff member?

Ms Talbot : That is right.

Senator CAMERON: How much was that?

Ms Talbot : It was $38 million.

Senator CAMERON: So, that would have been jobs gone to meet that. You give up jobs for a small salary increase?

Ms Talbot : Changing the eligibility for higher duties was $6 million.

Senator CAMERON: So, $6 million from employee entitlements back to the department.

Ms Talbot : And reducing the preparation of pack-up time was $18 million.

Senator CAMERON: $18 million from an entitlement workers had back to the department. It is not quite as simple as saying workers have given up a pay increase and how terrible that is. The result is concessions that would be enforced on workers. What is the total figure?

Ms Talbot : The total productivity figure is approximately $238 million.

Senator CAMERON: Over three years?

Ms Talbot : Yes.

Senator CAMERON: So, that is transfer of entitlements and wages from workers of $238 million over three years back to the department. What was the figure for the wage increase over those three years? Do we have that?

Mr Hutson : The way in which the bargaining policy works is that—

Senator CAMERON: I am not asking you about that.

Mr Hutson : I would be approximately—

Senator CAMERON: I have heard people trying to explain how this bizarre bargaining policy works in various estimates. I really do not need you, Mr Hutson, to try to tell me again because it has changed again.

Senator Payne: The officials are trying their best to help you.

Senator CAMERON: I do not need their help.

Senator Payne: To provide the information for which you are asking.

Senator CAMERON: Yes. I have asked one simple question.

Senator Payne: We are endeavouring to identify that.

Senator CAMERON: What is the value of the wage increases over three years that were on offer in February?

Mr Hutson : I do not have the exact number with me, but that would be pretty much close to the value of the productivity.

Senator CAMERON: So, the workers pay for their own pay increase. I will leave it at that.

Senator REYNOLDS: I have some further follow-on questions. In terms of the bargaining policy that my colleague has just described as bizarre, which is interesting given his government actually introduced the policy and the act—

Senator CAMERON: And the—

Senator SIEWERT: I do not think you should.

Senator REYNOLDS: I do not think you should given it was your own piece of legislation. That aside, you gave me the figures for an APS 5. Do you have the figures there for an APS 6, which I understand is more the median salary in the department?

Ms Talbot : I only have the figures for an APS 4, and the majority of our staff are APS 4.

Senator REYNOLDS: But I understand in terms of the wage—

Ms Talbot : We could provide an APS 5 on notice.

Senator REYNOLDS: Is there an APS 6 in terms of the median wage paid over the department?

Ms Talbot : No.

Senator REYNOLDS: Could you take that on notice?

Ms Talbot : Yes.

Senator REYNOLDS: Perhaps if you could provide on notice for the APS 4, 5 and 6.

Senator Payne: You have the APS 4.

Senator REYNOLDS: No, I have APS 5. You said it was APS 5.

Ms Talbot : It was APS 4.

Senator REYNOLDS: It was APS 4?

Ms Talbot : Yes. I do not have the APS 5. I only have the APS 4.

Senator Payne: We can take that on notice.

Senator REYNOLDS: If you could take APS 4, 5 and 6 on notice. I have APS 4, but you can take the other on notice. I might be looking at this very simply, but as I understand the complexities of this it is that by having a 12-month delay your APS 4—not 5 which I thought it was—is now out of pocket around about $1,250 which they will never get back. Is that right?

Ms Campbell : That is correct.

Senator REYNOLDS: That will continue until a new agreement is made?

Ms Campbell : Correct.

Senator REYNOLDS: That could be some time before it is agreed and implemented?

Ms Campbell : And that impacts on their wages as well as their superannuation and salary.

Senator REYNOLDS: All the fancy explanations of the ins and outs of all the changes that occur, because there are some things that come and some things that go out, but after all of that, as I understood it, you said that there was $30 million that was left unspent. Are you going to clarify the exact number? It was somewhere around that that was never paid out to staff and never will be paid out to staff.

Ms Campbell : Our salary budget is about $2.5 billion. One per cent of $2.5 billion is $25 million. We are just trying to find that figure for you.

Senator REYNOLDS: I am happy for you to take that on notice, but thereabouts. That is money that will never go to staff because the agreement has not been signed and that will continue to rise into next financial year the longer this dispute goes on.

Ms Campbell : That is right.

Senator REYNOLDS: The staff lose out.

Mr Hutson : That is right.

Senator REYNOLDS: Thank you.

Senator SIEWERT: I would like to go to payment for aged care providers.

Ms Campbell : We can find someone for that.

Senator SIEWERT: I know we discussed this issue before and I thought it was fixed, but the feedback that I am getting is that it is not.

Ms Golightly : I am sorry, but I did not catch that.

Senator SIEWERT: There have been ongoing issues with payment to aged care providers from what I understand. I can certainly list a whole lot of the examples that I have been given.

Ms Golightly : Any information you have we are more than happy to look into.

Senator SIEWERT: I have had advice and we have talked about this before. I am sure I was told that there had been some issues and that it was fixed.

Ms Golightly : We have fixed the ones that we know about.

Senator SIEWERT: We have had issues with some home care providers not receiving payment; that there have been random amounts with no clear information to enable reconciliation; that some organisations have only recently had final reconciliation of some of their payments over quite a long period of time; and, that there were errors that occurred in January with the changes to the income test fee subsidy.

Ms Golightly : I would need to have the individual details. In general terms we are not aware of any providers that have not been paid as long as they have submitted the documents they need to. The reconciliations are up to date.

Mr Storen : Payment statements have been available to providers since late 2014. They have been available upon request from providers. There can be instances with the way the system works. It works on advances and then reconciliations from providers. If the reconciliations or the paperwork have not been completed the department cannot continue the payment cycle so they are followed up with providers when that arises. There can be instances where claims are held up when the paperwork is not completed and we need to work that through with providers. When that is brought to our attention we have arrangements in place for when we do come across that.

Senator REYNOLDS: I have also had similar complaints from aged care providers that this has been a regular occurrence.

Ms Golightly : Whenever we get a complaint we look into it. I would very much ask for any of those things to be passed through so that we can get on to it straightaway. Mr Storen can add to this, but I think any of the ones that we have received in the last few months have more or less pointed to earlier issues that have been resolved.

Senator SIEWERT: What about some of the assessments for some people where I am told there have been reductions? This is from the income test fee subsidy. Reductions are being incorrectly deducted from subsidies, not matching income test fee letters or deductions simply overstated. This has confused families, not to mention providers.

Ms Golightly : Very early on there were some issues with letters and, again, the ones that we have referred and we have looked into, in a large majority of the cases, it related back to those earlier letters. I think it is also fair to say that people may not have understood that when we do a means test assessment that may give a result that they were not expecting. That does not necessarily mean it is an error.

Senator SIEWERT: I understand there is a difference between people underestimating what they think is going to happen.

Ms Golightly : We cannot, of course, ever eliminate totally human error. That is why we very much want to see any details that you might have and we can talk to the customer or the provider to make sure that it is not an error or resolve whatever the issue is.

Senator SIEWERT: Whether it is a mistake or whether they have underestimated what their assets are, families are being notified some way down the track and they are not prepared for the cost. Are you saying that is more about where they have underestimated their assets?

Ms Golightly : Yes. Whether it is under or over, either way they will be notified of the result.

Senator SIEWERT: I am told that people have been raising this with Medicare.

Ms Campbell : With Medicare?

Senator SIEWERT: They say Medicare.

Ms Golightly : We have regular meetings with all of the peak bodies, both the provider peaks and the consumer peaks, as well as people at the Department of Social Services. People do raise issues and we very much encourage them. We look into all of them. What I am saying is that quite often when we look into that in most cases it is not a systemic issue. It may have been an earlier issue that has been fixed or it is something about that particular case that is a bit more complicated and a one-off.

Senator SIEWERT: Are you saying that the issues are generally not systemic?

Ms Golightly : Yes.

Senator SIEWERT: That means some are. What are those issues?

Ms Golightly : The ones that were a bit more systemic were the earlier issues.

Senator SIEWERT: The issues that we have talked about before?

Ms Golightly : Yes.

Senator SIEWERT: Do I take it from your answer that you do not think that there are any systemic issues now?

Ms Golightly : Not that we know of. Again, that is why, as well as fixing it for the customer, we are very keen to look at any information people have.

Senator SIEWERT: Who should people write to? I am told that their concerns have gone unanswered. Is it better to write straight to the department?

Ms Golightly : Yes.

Senator SIEWERT: I will feed that back.

Ms Golightly : Either Mr Storen or myself and we will deal with it.

Mr Storen : If they can communicate directly with me that is fine.

Senator SIEWERT: That is the best approach.

Mr Storen : The more specific the case is, the better it is. I have had communications with a range of providers over quite a few months. We prioritise correcting the issue for the particular recipient. That is the first priority. The second priority is to look for systemic trends, as Ms Golightly said. The vast majority relate to the data issues we had a lot earlier on, but we look actively for systemic issues to ensure that it does not continue.

Senator SIEWERT: I will pass that information on. What is the largest amount of money that a provider might be owed at one time?

Ms Golightly : That is very hard to answer. I could take on notice what we could give you. The reason that it is a little difficult to answer right now is because, as Mr Storen mentioned, this whole system is one of an advance payment at the beginning of the month and then a reconciliation at the end. The beginning of the month advance is based on what their end result was for the two months prior to that. It goes up and down. It depends on the size of the provider, the number of recipients they have in their care, and that sort of thing. I am more than happy to take on notice what we could get you to help answer that question.

ACTING CHAIR ( Senator Siewert ): That would be appreciated, thank you.

Senator REYNOLDS: I have got more. Have you got more questions?

Senator CAMERON: No—

ACTING CHAIR: I will get people to follow up with you and if you could take those other questions on notice, that would be appreciated.

Ms Golightly : Absolutely.

ACTING CHAIR: Did you want to kick off on the next one?

Senator CAMERON: Yes. You made an announcement on Friday, 22 May that there would be a new criteria for consumer leases. There would be an exclusion for leases that run for an indefinite period or of a duration of four months or less. How many indefinite and short-term contracts will be excluded?

Senator Payne: I do not have the number of short-term consumer leases and indefinite consumer leases with me immediately. One of the reasons for that, as you know, is that when the system records the relationship between the provider and our customer it does not necessarily record the nature of how they obtain the credit. I have been discussing with the department how we can actually address that so that the data we hold is improved in that regard. What we have done in making that change is to say that those unregulated consumer leases and leases of less than four months duration will no longer be covered by Centrepay. If an individual still wishes to use those as a form of credit then they are free and able to do so, but it will not be paid through the Centrepay process.

In that announcement, as you would know, we also extended the use of Centrepay to include a number of other low cost finance options, including laybys, savings plans and low interest loans. No interest loans have previously been included, but we are also going to include low interest loans.

Senator CAMERON: How many citizens who are on Centrepay will no longer have deductions made as a result of the changes?

Senator Payne: Again, we are going to grandparent that process so that we can support those customers and engage with those businesses to ensure that people are not negatively affected, but because of not holding that specific data it is difficult to estimate that. I can tell you that, if I am correct, over 600,000 Centrelink customers use Centrepay as a method of payment of particular bills such as utilities, household goods, a combination, and so on.

Senator CAMERON: So, you do not know how many contracts will be affected, you do not know how many Centrepay clients will be affected by this decision; is that a prospective decision?

Senator Payne: Yes, it is prospective and the department is engaging extensively with providers to work with them where they are existing providers to our customers, where the issues and system changes may affect them.

Senator CAMERON: But your press release says that there will be a 12-month transition period.

Senator Payne: I said grandparenting, actually, yes.

Senator CAMERON: If you do not know who is actually caught up in this rort—

Senator Payne: We talk to all providers.

Senator CAMERON: Will you talk to every provider?

Senator Payne: Yes, we will engage with all providers.

Senator CAMERON: What is the proportion of all consumer leases to which Centrepay deductions are made that are not regulated by the Consumer Credit Code?

Senator Payne: Again, that is not a piece of information that our system currently holds. That is an alteration I have asked the department to look at making so we are able to have a better idea of that. Obviously, the Centrepay system which was commenced in 1989 has been operating for a period of time. The process of both the review and the administration we have been looking at over the past 12 to 15 months means we are trying to change things progressively. It is not easy to change our system but these are requests that I have made of the department in terms of the system reform.

Senator CAMERON: Who is the department consulting with over these changes?

Ms Campbell : I will ask Mr Learmonth to talk through those entities.

Mr Learmonth : We have a range of stakeholders that we are consulting with and have consulted with over the last couple of years in relation to these changes. We will continue to do so.

Senator CAMERON: It was only announced recently.

Mr Learmonth : I am going back to the review.

Senator Payne: We work with the providers and the stakeholders all the time.

Senator CAMERON: I would like to know who you are consulting with, not over the last review that was not implemented. I am asking about who you are consulting over the changes announced in the minister's press release.

Mr Learmonth : We will be consulting with a number of stakeholders, including CHERPA, the Consumer Household Equipment Rental Providers, with the Aboriginal Community Benefit Fund, with the Financial Rights Legal Centre, and undoubtedly with our regulators as well.

Senator CAMERON: Have you consulted with anyone so far?

Senator Payne: I have met with a number of representatives in that space: Financial Counselling Australia, the Consumer Action Law Centre, the National Welfare Rights Network, and with Good Shepherd Finance. I told you in the chamber some period ago that I was in discussions with the Assistant Treasurer, who of course has some significant responsibility for the regulators that Mr Learmonth has just referred to—ASIC and so on. That part of our consultation is also ongoing.

Senator CAMERON: Have you got a program for consultation?

Mr Box : Yes, there is a program for consultation. Consultation has started. There has been draft documentation for the new terms and conditions provided to stakeholders. There has been a video hook-up and a telephone hook-up with stakeholders. The exact list of the names that Mr Learmonth gave you are parties to those consultations.

Senator CAMERON: Can you take it on notice and provide me a list of who you have consulted with, where you have consulted and the outcome of the consultations?

Mr Box : Definitely.

CHAIR: We are at our scheduled finish time. I need an indication—

Senator CAMERON: I have this to finish. I am nearly there. I have a few questions on a communications issue.

CHAIR: Senator Siewert also has some additional questions. Given that, and that there are some issues with the timing of the break, I would say we are probably going to need another 15 to 20 minutes. I would prefer to break. I apologise for that, but we are going to just have to extend—

Senator CAMERON: Is that 15 to 20 minutes including the break?

CHAIR: No, in addition I think, perhaps as much as half an hour. We will break.

Senator Payne: Are we going to have the break and then come back for another half hour?

CHAIR: We will then come back for around that time. Hopefully it will be a little bit less, but we will see how we go. We will come back at 4 o'clock.

Proceedings suspended from 15: 40 to 16:00

ACTING CHAIR ( Senator Siewert ): We will now resume.

Senator CAMERON: We were on the consumer leases. I think I am nearly finished. The calls I have had to my office from people using companies like Radio Rentals indicate that the effective interest rate is somewhere about 40 per cent, and sometimes people are paying about three times the face value for the goods that they are buying. Are you aware of that, Minister?

Senator Payne: I am aware and concerned, yes. I did consider those concerns in my recent announcement as well.

Senator CAMERON: Given that there are reasonable alternatives, far better alternatives, such as Good Shepherd Microfinance, why do you not just ban these lease-buy operations that really make it tougher for people in the longer term?

Senator Payne: We have made the decision in relation to the indefinite consumer leases, the indefinite unregulated consumer leases and the less than four months consumer leases to exclude those. We have increased the options, as I mentioned earlier. In making that decision, and in my discussions with the Assistant Treasurer, I have also had stakeholders put it to me that the sorts of consumer leases that we are talking about still do play a role for a certain cohort of Centrelink customers. I have had this discussion, for example, with the National Welfare Rights Network who made this observation in their submission to the Centrepay review which the previous government instituted. They still hold that view, for example. Some of our colleagues who represent some of the more remote areas of Australia remain concerned that families who do not have access to any other sort of credit, because of their financial situation and their status as a Centrelink customer, still are quite limited in their options in what they can access. So the option of consumer leases in the regulated sense remains important for them.

That is not to say, though, Senator Cameron, that I do not appreciate some of the concerns that you have raised, and obviously people speaking to you have raised, and in fact have been raised directly with me. I intend to continue working with the Assistant Treasurer to try to identify ways that we can ensure that our customers are as well informed as possible. We have already made changes to the presentation on our website, so you can see the ASIC link, the MoneySmart link, to make those assessments. We have been speaking about training our staff in this area about exposing our customers to information about other options, including no- and low-interest loans and so on. I am just hesitant at this point in time to completely cut off that option. I do intend to follow it up further with the Assistant Treasurer.

Senator CAMERON: I have been advised that this is just another way of maximising profit at the expense of some of the poorest people in the country. People like Radio Rentals depend on half of their turnover on these types of loans that are at least 40 per cent interest, and three times the face value. I just cannot see any reason—and I know the National Welfare Rights Network have a view—but in my discussions across the country, across all of the various groups, their view, quite frankly, is in the minority.

Senator Payne: I regard this, if I might say, as a work in progress. One of the reasons for that is because, having listened to stakeholders across the board, including those that you have mentioned before, others I have met with and the National Welfare Rights Network, they make a compelling argument particularly in relation to immediately vulnerable women in violent circumstances, and a number of other examples which I am listening to. I am being very frank with you here. This is something I have been working on for some time. I think we can make some changes in the way that Centrelink and the Centrepay system inform our customers of the implications of a consumer lease that will help in this space. The level of immediacy is something that the National Welfare Rights Network certainly continues to support. I take on board what you say, and I hope you will take what I say in good faith, and that is that this is an ongoing process, and I continue to review it with the department and with stakeholders.

Senator CAMERON: I appreciate your frankness on that. I have to say, I have the highest regard as you have for the National Welfare Rights Network. But quite frankly, I think they are wrong in this one.

Senator Payne: You are entitled to think that.

Senator CAMERON: I think that is the general view. I have had discussions with Anglicare, St Vincent de Paul and some of the legal support networks for poor people; I have had all of that discussion, and I just think what is going on is terrible. This continues to allow people like Radio Rentals to make a profit off the back of the poorest people in this country. It also lets people like Rent The Roo—have you heard of them?

Senator Payne: I have.

Senator CAMERON: They should have no place absolutely for presenting themselves as a reputable company. They are not excluded.

Senator Payne: ASIC has dealt with a number of the cowboys in this space, as we have tried to support them in doing, and we have had experience of that as well. As I said, we are going to agree to disagree this afternoon, but it is for me an ongoing process.

Senator CAMERON: With respect to this Good Shepherd Microfinance, I think they have about $150 million in terms of support from I think the National Australia Bank.

Senator Payne: NAB, definitely.

Senator CAMERON: They have significant funds available to help poor people in this country. They are a not-for-profit organisation; they are a charity. I know you said you were talking to them, but really, when people come in in these dire straits, surely there is something better we can do at Centrelink to say, look, do not go to Radio Rentals, because you will pay three times, and you will pay 40 per cent interest; go to Good Shepherd, go to a microfinance company and they will help you.

Senator Payne: We are doing that. I went to the Good Money store in Collingwood in Melbourne, which is the Good Shepherd store front, if you like—

Senator CAMERON: For a loan!

Senator Payne: I did not make the cut-off!

Senator CAMERON: That was a joke, for the Hansard.

Senator Payne: It is 'insert irony here', I believe. I am definitely very much aware of them, and am a very big supporter of them. We are doing a lot more in our service centres, in our face-to-face engagement, and in our telephone engagement with our customers to advise them of options. That is exactly why we have extended to low interest loans as well, because that is an important step in that process.

Senator CAMERON: I appreciate your candour; I appreciate your views, but I am sorry I have to finish on this: you should stop it now. People are being ripped off.

Senator CAMERON: You do not have to be sorry. I knew you were going to say that.

Senator CAMERON: Stop it now. I am finished on that, thanks, Chair. I have one more area on which I can be very brief.

CHAIR: I know Senator Siewert has another area as well. Shall I let Senator Cameron finish?

Senator SIEWERT: Yes.

Mr Box : Sorry, could I just correct the record before we leave Centrepay. I advised the minister that it was 1989; that is incorrect. It was 1998. I got my 8s and my 9s mixed up.

CHAIR: Easy to do.

Senator CAMERON: Is Mr Jongen here?

Ms Campbell : He is, but I can also try to answer your question.

Senator CAMERON: The tender has been put out for communications. Do you know the tender?

Ms Campbell : Yes. I will find someone who knows some details about this.

Senator CAMERON: I thought Mr Jongen would be here because when I read it, I thought this is the Jongen juggernaut.

Senator Payne: We do not call it that in Human Services.

Ms Campbell : I am not quite sure who does that tender, but I am sure someone will be here any minute.

Senator CAMERON: Talk of the devil; here he comes.

Mr Hutson : I am assuming you are referring to the one that was mentioned in TheAustralian Financial Review?

Senator CAMERON: Yes.

Mr Hutson : For some years the communications division has had in place a media monitoring arrangement that assesses the volume of material across the press and various other media sources in order to work out some broad statistics about those issues. That contract has been in place for a number of years. It has a value of somewhat less than $80,000 per annum. That contract is coming to an end, and this is a retender for it.

Senator CAMERON: The report in TheAustralian Financial Review says that this goes well beyond its existing media monitoring service. Can you explain to me where it goes beyond and why?

Mr Hutson : First of all, I do not agree that it goes beyond the arrangements which we have had in place for quite a lot of years. It is different to media monitoring in the sense that, when I say 'media monitoring', normally that involves looking at the press articles as they appear and reporting on what has been done. That does not generate any statistical information. This contract also generates statistical information. Mr Jongen, would you like to speak about the stats?

Mr Jongen : Yes. What we look for is statistical information to tell us whether we are appropriately targeting our various audiences. As a department, we do not have an advertising budget, which means we use media extensively in order to keep our customer base informed. This is similar to mechanisms used by commercial companies which provide you with information about the effectiveness and the number of sets of eyes, if you like, that actually hit your various media stories. I have to say that story is a complete beat-up.

Senator CAMERON: So you are telling me that you will not have probably the best picture of issues relevant to your remit outside of the intelligence agencies?

Mr Jongen : No, we will not.

Senator CAMERON: That is what the community thinks.

Mr Jongen : I know it does. They did not approach us in relation to that story. They clearly looked at the tender document but, as has already been indicated by Mr Hutson, I think for a contract in the order of about $70,000 per annum, it is not going to give us the sorts of intelligence that that article implies.

Senator CAMERON: So ASIO has nothing to worry about?

Mr Jongen : I will not be competing with them.

Senator CAMERON: Thanks, Chair. I will put a range of questions put on notice.

Senator SIEWERT: I will be as quick as I can. I apologise for going back to issues related to the aged care process and means testing. I am sorry that I am skipping around. Just when you thought it was safe to get away, I want to go back to the issues around the means testing process. I understand that you have improved the system about how you are dealing with sending out the means testing letters, which partly goes to some of the issues I was talking about before.

Ms Golightly : Yes.

Senator SIEWERT: You have put additional processes in place. At the moment, how many letters would you be dealing with on means testing per month?

Ms Golightly : I know we have about 10,000 letters, but—

Mr Storen : Depending on the month, it is 10,000 to 15,000 letters outside of what we call the quarterly review process. In addition to 10,000 to 15,000 per month, four times a year there is a review process of means tests and subsidies and so forth. Those reviews can then release in between 70,000 to 120,000 letters.

Senator SIEWERT: In that quarter?

Mr Storen : In a quarter, you could say—let us say 12,500 per month on average; multiply that by three and you get 37,500 or thereabouts, plus let us call it about 90,000 on average for a quarterly review, so it is about 120,000 to 130,000 letters in a quarter.

Senator SIEWERT: Let us take out the quarterly review ones. Of the, say, 12,500 average, do you know how many of those have been incorrect?

Ms Golightly : What we do know is where we have had people raise an issue with us so we could take on notice how many of those have resulted in something being incorrect.

Senator SIEWERT: Could you take on notice how many per month and, in particular, in the last six months of last year?

Ms Golightly : The last six months of the calendar year?

Senator SIEWERT: Yes, of 2014.

Ms Golightly : Certainly.

Senator SIEWERT: How many staff are dealing with this issue of just the means testing? It is a huge task.

Mr Storen : When you say 'dealing with the issue'?

Senator SIEWERT: How many are engaged in the process of addressing this particular issue of the means testing process? Do you still have to do it manually?

Ms Golightly : No. Maybe if we could clarify it, the means test assessments are done as part of our normal business. We do them for all sorts of payments, including age pension, for example, as well as for aged care. If your question is how many people are dealing with complaints or queries we receive, we could get that for you again on notice.

Senator SIEWERT: Because the aged care means testing is now part of the normal process, can you separate out the number of people who are dealing just with the aged care means testing process?

Ms Golightly : We might be able to. I will take that on notice.

Senator SIEWERT: If you can take that on notice, that would be appreciated. Do you keep the details of means testing for those that are eligible for home care packages separately, or is it all dealt with as one?

Mr Storen : The processing is part of the same processes we do for residential.

Senator SIEWERT: Okay, so you cannot provide me with breakdown figures on what is home care?

Ms Golightly : We might be able to give you a rough split, because we know roughly the size of home care program compared to residential care, but that would be sort of a rough proportional estimate.

Senator SIEWERT: There is a specific reason that I am asking about that. There was some concern when we were debating the whole living longer, living better, that the way the package was set is actually going to be a disincentive for people actually taking up the package for home care. That is why I am asking for that. If you do have those figures, once you have done the assessment, are you able to tell us how many are actually taking them up?

Ms Golightly : I think that would be more a question for DSS because they handle the package. I am sorry if this is not directly relevant to you, but the other thing to remember is that if the person is an age pensioner already, for home care we already have their details. So that might not show up in an actual assessment, if you like, because we do not have to redo the assessment.

Senator SIEWERT: All right, I will ask DSS. Would they be getting payments?

Ms Golightly : DSS would know how many packages are taken up.

Senator SIEWERT: Yes. Can you provide the number that are means tested?

Ms Golightly : We can probably—

Senator SIEWERT: But you do the mean test assessment?

Ms Golightly : Yes.

Senator SIEWERT: Okay, that would be appreciated, thank you. They are all the issues I have on aged care. I have two extra questions which hopefully will be very simple. You might need to take them on notice. I am interested in the number of people on DSP that have now been approved for portability.

Ms Campbell : We might have to take that on notice. I do not think we have that with us.

Senator SIEWERT: So can I put that on notice, please: what is the success rate of people on DSP applying for portability?

Ms Campbell : Do you want success rate, or do you want the number?

Senator SIEWERT: Sorry, can I have the number and the success rate? Is it possible to give it to me for each year from 2012?

Ms Golightly : We think so.

Senator SIEWERT: I have one last question. In terms of bereavement statements, I have had a constituent who has expressed concern that after his wife passed away, he went through the process of notifying Centrelink and that he was then asked to check a summary of income and assets within 14 days of his notifying of his wife's passing away. Is that the normal process?

Ms Campbell : I am not sure if we have anyone who knows that exactly, but we can come back to you on that.

Senator SIEWERT: If you could come back to me, I also will put on record that, when I had to deal with the service to notify of a death, I must say that I had excellent service from Centrelink, but then I did not deal with the statement, so I do not know what the process is.

Ms Campbell : It may pertain to his own circumstances separate from the bereavement. We would need to look at those particular circumstances.

Senator SIEWERT: Could you provide information on what actually does happen and what gets sent out, because we can understand that it is a very sensitive time.

Ms Campbell : It is.

Senator SIEWERT: It is probably fairly confronting.

Ms Campbell : Indeed.

Senator SIEWERT: Thank you. That is all of my questions.

CHAIR: Before we conclude, I understand that the secretary has something to add.

Ms Campbell : Just a couple of clarifications. Senator Reynolds asked us about moneys foregone from pay increases, had they been in place. If the agreement had been in place from 1 April, some $21.1 million would have been paid in this financial year. We have just seen some media, and there seems to be some confusion about the wait times, so just to clarify across all the average against the key performance indicator, year to date, up to 24 May, it is 16 minutes and 27 seconds.

Senator SIEWERT: So what is the difference in terms of the figures that you gave?

Ms Campbell : We gave you averages, so we are just trying to work out—

Senator SIEWERT: So the average of the averages—

Ms Campbell : The averages will affect different numbers attached to them. If there was an average of 19 minutes for one million calls, an average of 15 minutes for 20 million calls, that will have skewed how the average works out.

CHAIR: So the 16 minutes is an average of all calls?

Ms Campbell : All calls.

CHAIR: Rather than an average of the average?

Ms Campbell : Yes.

CHAIR: That makes sense.

Senator CAMERON: Does this not add some validity to the ANAO recommendation that you should look for a more understandable key performance indicator?

Ms Campbell : Average is something that is relatively easily understood, but I understand that there has been some confusion today.

Senator CAMERON: The average is 16 minutes, but if you wait for an hour and 15 minutes, it is irrelevant. For some people, the average does not reflect what the call time is.

CHAIR: That is going to be a bit of a mathematical debate.

Senator CAMERON: It is. That is why the ANAO said do something different.

Ms Campbell : Yes. The ANAO has suggested we review it, and we will review that.

Senator SIEWERT: Can I ask a question, because somebody has just fed back saying that they have been told to go and record their data online for their earnings from their investments, and they cannot do it online. There is no provision for them to do it online; is that correct?

Ms Campbell : I do not know.

Senator Payne: It depends in which program, which payment.

Senator SIEWERT: Pensioner.

Senator Payne: Is it income stream report?

Senator SIEWERT: Yes, income stream report on the changes to their investments.

Mr Tidswell : I am happy to take the individual details.

Senator Payne: It is very hard to answer like that, Senator Siewert.

Mr Tidswell : I have a father in that very circumstance, and we have him online changing his set of circumstances as things vary from time to time. But as both the minister and Ms Campbell have said, it is difficult, with all of the things that we do and the different products that people are on. If we can have some details, we can follow it up for you.

Senator SIEWERT: He is receiving a pension, and states:

We must notify Centrelink of any changes above $2,000 in the value of our assets.

So it is the value of the assets.

Given that the value of our self-managed superannuation fund varies from stockmarket movements, we typically need to advise Centrelink at least once a month, sometimes twice. This can only be done by phone or by visiting a Centrelink office.

This is the lived experience of someone right now.

Mr Tidswell : So effectively, if we can get that information, we can find out what is going on. What often happens is you may not have the level of access to do that, so you need to increase the level of access to do it.

Senator SIEWERT: What do you mean, 'the level of access'?

Mr Tidswell : The level of security access when you go on line to do that, so that we know who you are, you have provided extra information so that we can make sure that these things are done appropriately.

Senator Payne: I must say, even in the last 12 to 18 months in this particular role, the department has been transitioning a number of payments and capacities to report into the online space as well, but it does not happen overnight.

Senator SIEWERT: This says, 'It has not permitted changes to superannuation fund asset values.' Would that be one of the things that you are currently transitioning?

Senator Payne: We will follow that up for you.

Senator SIEWERT: So this particular concern is that they just get busy, busy, busy, busy, busy, busy, and they end up driving down to Centrelink.

Ms Campbell : We will follow up on that one. I think you said it was self-managed superannuation funds, which may be different from the other superannuation funds where we have direct data matching. We will need to look at that one.

Senator SIEWERT: So twice a month, potentially, they have to drive to Centrelink or spend a vast amount of time on the phone.

Senator Payne: We would rather help them in another way, and if we can get the information, we will follow it up.

CHAIR: All right, thank you; that concludes examination of Human Services. Thank you, Minister; thank you, Ms Campbell and officials and to the Hansard, broadcasting and secretariat staff. Senators are reminded that written questions on notice should be provided by close of business Friday, 12 June, to the secretariat. We will now move on to Social Services.