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The Hon Joe Hockey MP Minister for Human Services

Future Directions for the Access Card Your Card - Your Security

Speech to National Press Club, Canberra on 8 November 2006

The last time I spoke here at the National Press Club was 18 months ago. During that speech, I raised the possibility that a new high-security, chip-based replacement could upgrade the existing Medicare card.

A lot has happened since then. Human Services is now established as a viable, dynamic department that is constantly looking at better, simpler and more secure ways for Australians to do business with their Government. At the same time, it has become abundantly clear that the current system of health and welfare entitlement cards is becoming increasingly insecure and open to fraud. The Medicare card in particular is cheap and easy to copy. The AFP estimates Medicare cards are now involved in some way in more than 50 per cent of identity fraud cases. So what have we done" The Government’s response has been to begin work on replacing our 17 health and social welfare cards and vouchers with a single smart card that has become known as the Access Card. Smart card technology is something Australians will become very familiar with over the next few years. It is a technology widely used in Europe and many parts of Asia. It is a technology that banks are applying to credit and debit cards, and that state governments are

applying to drivers’ licences and transport services. And over time, it is a technology that will be adopted by most private sector service providers.

Put simply, smart card technology is safer than the traditional cardboard and magnetic strip cards most Australians carry around in their wallets because a microchip is more secure and harder to copy. Smart card technology offers greater privacy because it allows users to display less information on the face of the card. This means more information is kept out of the immediate view of any unauthorised person. The microchip in a smart card delivers the capacity to securely store a limited amount of information that can be accessed only by a computer-based reader. It’s an undeniable fact that with modern technology, stand alone cards that exist today are very vulnerable to fraud and misuse. Security and privacy concerns dictate that the card be checked against a database in order to be sure that the card is valid. That’s what happens with financial transactions on EFTPOS machines and that’s what the police do after they have pulled you over for speeding. They validate the card against a separate database. Australia has been a complacent comfort zone for existing card technology for too long. Cards with magnetic strips are easily skimmed. Many other countries, particularly in Europe, replaced the mag strip with a microchip long ago.

The Project The Department of Human Services hands out nearly $100 billion in health and welfare payments each year. When dealing with this amount of money it is absolutely crucial that we take fraud seriously. This is one of the reasons why we have now allocated $1.1 billion to implement the Access Card from 2010. This is why the card will replace and upgrade the 17 cards and vouchers that are currently issued by Centrelink, Medicare, the Department of Veterans’ Affairs and the Office of Hearing Services. The project commenced in May and we expect to begin the national rollout on time and on budget in early 2008. We have all of our key personnel in place. We have sought the best global advice and now more than 150 people across 23 departments and agencies are working on the project. An important part of the implementation program was announcing that Professor Allan Fels would head up a Consumer and Privacy Taskforce that will provide regular advice on consumer issues. Over the last few months, the Taskforce has engaged in extensive community consultation across Australia. They have met over 120

representative groups and have received more than 100 public submissions. Like the Government, the Taskforce has had to balance competing consumer demands. Some people want a card that does everything from Medicare payments to their personal banking. One submission even suggested that the card should store shopping lists. Other submissions wanted medical records on the card whilst some people were very concerned about that particular application. The advice from Professor Fels, which is being released today, represents a snapshot view of the project. And while you will all have the chance to read Professor Fels’ formal report today, it is important to acknowledge much of his input has already influenced the architecture of the card. That is also why the Government is able to say that it has accepted twenty two of the twenty six recommendations. One recommendation is partially supported and one is under active consideration. Only two recommendations have not been accepted. Those two recommendations involve removing the signature and the number from the face of the card. Practical considerations have led us to reject these recommendations and I’ll touch on that a little later. Also today I am launching an information programme. This programme will include an easy-to-read brochure that explains the card. These brochures will be available in all Medicare, Centrelink and Department of Veterans’ Affairs offices. We also have a new-look website. We want this to be as open and transparent process as possible and I encourage people to visit the website, read the information and provide feedback.

Your Card There is still a small level of anxiety in the community that the Access Card may in some way compromise an individual’s privacy. I believe that the architecture of the card addresses this concern. Firstly, in what I am advised may be a world information technology first, the Access Card will be owned by the cardholder and not by the issuer. That is, the Australian Government. It’s important to remember that virtually every card in your wallet remains the property of the issuer. Your credit card, your debit card, your driver’s licence, your transport cards and even your gym membership card remain the property of the issuer. Certainly government issued cards around the world remain the property of the issuing government. The effect of the issuer retaining ownership is that they control the card and the purpose for which it is used.

However we believe that legal ownership of the card must vest in the individual so that the Access Card will truly be YOUR CARD. In simple terms it will be a similar arrangement to owning a car. Of course you own your car but there are legislated rules governing the design of your car and the way that you may drive the car on public roads.

We will take a similar approach to the card. And we propose to enshrine this ownership principle in legislation. This means that you don’t have to carry your card in your purse if you’d prefer to leave it at home. This means that we are proposing legislation that no person - including the police or the banks - will be able to demand the Access Card as the only allowable form of identification. The only requirement for presentation of the card will be if you are accessing a Federal taxpayer funded health or welfare payment. This too will be enshrined in the proposed legislation. Your card will also have limited information on display. As this slide shows [Your card], the front of the card will only have your name and digital photo. The back of the card will have a number, your scanned signature and the card expiry date. There will be no other information visible. In this respect the card is more secure than your driver’s licence, which has your address and date of birth clearly visible. After considering all the advice, including Professor Fels’ recommendation, we decided to proceed with a number on the back of the card. A visible number will make it quicker and easier for people to use the card for telephone and online services. We also decided to proceed with a signature imprint on the card. This will make it easier to cross check signatures on the 50 million forms that are completed every year at Centrelink, Medicare and other Government offices. We have also taken other consumer needs into account. Members of the Veterans’ community who currently have gold cards, for example, will also be able to have their cards’ colour in recognition of their entitlements. As this slide shows [Using your card], the card will be used as a proof of identity at our 850 Medicare, Centrelink and Veterans Affairs offices around Australia. Once you have registered and received your card, you will not have to repeat the present cumbersome process each time you enter an office. You will simply present your card to access the service. You will be able to use the card as proof of entitlement with almost 50,000 doctors and pharmacists. This will immediately and reliably validate your Medicare or pharmaceutical rebate. It will make

accessing the Medicare and PBS safety nets far easier and more efficient for individuals and families. And you will also be able to use the card to receive emergency payments in disaster affected areas. Cyclone Larry and the Katherine floods presented us with enormous logistical challenges earlier this year. In both cases, emergency Government cash payments required massive security arrangements. It would have been preferable if we could have directly transferred cash to those affected. The card may also be used by you, at your choosing, as an identification tool in the broader community. In fact it will be an even more secure identification tool than your current passport. But it may only be presented on demand for our Medicare, Centrelink and ancillary services. Our proposed legislation will prevent the card being required by a bank or other organisation as the only allowable form of identification. People may, however, choose to use the Access Card to assist in Proof of Identity. Because ownership of the card is in the hands of the individual and because we are proposing legislation that prevents presentation of the card on demand, we will give people the option of their preferred name on the face of the card. This is possible because readers will be widely available for purchase and that the reader will enable, with the permission of the individual of course, access to the legal name. The individual will need to consent to handover the card and key in their PIN where they have opted to PIN protect this information. This technology also allows us to expand our online service delivery. Proof of identity has been the major impediment to an expansion of online services. (As it has been with Internet banking as well!). With a $25 card reader attached to your home computer, together with PIN protection, online services can be massively expanded for our customers.

Your Security Our current processes for claiming health and welfare services are cumbersome and time consuming. What we are proposing is a much simpler process with less hassle for you. You will simply dock your card into a reader at an office and you’ll be able to get straight down to business. It will provide greater convenience to you the customer, and a saving on administration costs for you, the taxpayer. Unquestionably, however, this improvement in convenience will also deliver greater security and privacy protection for individuals. At present we have a combination of paper and electronic systems that record the personal details of all our customers. In Centrelink alone we have a massive 275 kilometres of files that includes photocopies of

birth certificates, drivers’ licences and even electricity bills provided by customers who are trying to prove their identity. Medicare has to measure its records in a similar way. They have more than 3 square kilometres of storage space for forms with signatures. We collect, and almost never reuse, this information. Under the present system, every time you make a new claim we ask that you go through a form filling-in exercise, often giving us, again, information we already have on file somewhere. The new card will finally put an end to this waste of time. We will be able to reuse the information that you have given us before, but only for the purposes for which you gave it to us. We can then pre-populate forms and take a lot of the pain out of the claim process. The obvious consumer benefits of the one-time only registration for health and social services also flow to you, the taxpayer, through reduced identity fraud. Identity fraud is one of the most challenging crimes our agencies face. Some people will go to extraordinary lengths to create a false identity or to steal the legitimate identity of someone who already has an entitlement. In a recent speech to a Counter Terrorism Summit, the Australian Federal Police Commissioner, Mick Keelty, estimated that identity fraud costs Australian’s anywhere between $1 billion and $4 billion annually. Worldwide, the cost has been put as high as $2 trillion. At the moment people can pay around $150 for a very good fake Medicare card. [Display cards]. This compares to $750 for a fake NSW drivers’ licence. As a Government it is our responsibility to stop the proliferation of these fraudulent cards and the misuse of genuine cards. I would like to give you a just a couple of examples to illustrate what is a growing problem. In a recent case, a Centrelink customer had meticulously created false identities for 18 non-existent children. The customer had used fraudulent birth verification forms and forged letters to falsely claim benefits for nine sets of twins! A tip-off from a suspicious Centrelink employee and a subsequent investigation exposed that fraudulent activity occurred between 1999 and 2005. Over that time, the individual had stolen $623,000 from the taxpayer. And it is not just in the welfare space that fraud occurs. Medicare has its share of fraudulent activity. We discovered a doctor in Queensland who used 21 stolen identities involving Medicare cards to obtain 19,650 narcotic medicines worth over $2 million. He was charged, convicted and jailed for five years. In each of these cases a false identity has been created. It is far harder for us to detect fraud that involves a stolen identity.

For example, we have many smaller cases where people who are not eligible for Medicare, such as a temporary visitor to Australia, use a stolen Medicare card to get free health services. Others have used

stolen Centrelink concession cards to get a discount on public transport or electricity and water bills. All of these smaller cases, where the amount of the fraud is a few

hundred dollars, add up. When you consider that more than 1 million concession cards are cancelled on a date prior to the printed expiry date on the card, there is ample room for misuse. It’s also worth noting that more than 500,000 Medicare cards are lost or stolen each year.

Another form of identity fraud involves the collusion of individuals to borrow or buy another’s identity for the purposes of getting concessional services or to access the Medicare safety net. This is the most difficult fraud for us to detect and it represents a significant opportunity for taxpayer savings and privacy protection.

This is a significant honeypot for fraudsters. A regular pensioner concession is valued at $2000 per year. Access to the Medicare and PBS safety nets is also extremely lucrative for a compliant partner in

crime. As I said, identity theft costs the economy billions of dollars each year. So it is not surprising that with identity fraud growing, the latest Unisys Security Index shows that 59% of all Australians are extremely or very concerned about the threat of identity theft. The Unisys survey also found that 98% of Australians are willing to use extra security features to protect themselves from threats such as identity fraud and misuse of personal information. We do not know the exact size of the problem in the health and welfare space. The best estimates range from a few percent to about ten percent. When KPMG did its business case on the Access Card, they said that we could recoup up to $3 billion over ten years. KPMG said it was a conservative estimate. I think this is a very conservative estimate. I expect that we will do much better than that. Certainly in comparable countries in Europe, such as Germany, the estimated savings on "leakage" is around 1.6% of outlays. This year we will spend around $100 billion on health and welfare services in my department. So, even a small percentage loss represents billions of dollars. Under the current multiple card system we have difficulty in detecting fraudulent use at the time a card is presented. We need to be absolutely certain that we are paying the right person for the right service, every single time. The Access Card will go a long way to fix these structural weaknesses in the current system. Instead of catching people after the event, we

will be able to put a greater emphasis on prevention of fraud and overpayment at the point of sale. This is what the new card system is designed to deliver. That’s why the Access Card will have these extra security features built in. Most of your important personal information will be on the chip and protected from plain view, as this slide shows (Your security). This part of the chip is called the locked zone. However there is significant demand for the card to be able to store other information. We are therefore creating a Customer Controlled part of the chip. You will be able to customise your card with the addition of personal information like emergency contact details, next of kin, allergies, organ donor status and health alerts. You will be able to add other information that you may wish to include. Many people find it risky holding a card in their wallet that details their allergies or medical conditions. And for those people who have allergies and have to wear a wristband or a tattoo noting they are haemophiliacs or are allergic to penicillin for example - there is no privacy. Many simply refuse to be branded. Therefore we are creating a customer controlled area in the chip where individuals can store the information they want to store in the chip. In simple terms it makes the Access Card similar to a mini-iPod, where you can download limited amounts of information on to the microchip and carry it around in your wallet or purse. Consumers value having a safe place to keep their data but we are aware of the privacy risks involved which is why I’m asking Professor Fels to examine this issue further. One option could be for the information to be held on the chip and on a separate database chosen by the individual. If necessary we will put in place appropriate protections in relation to this information. All protections will be made available for public comment before final proposals are put to the government on how the Access Card information is to be collected, verified and stored. Additional Security We are designing a robust registration process for the card that will be convenient to Australians. We have designed the card and the database, which we are calling the Secure Customer Registration Service, to include a high resolution digital photograph and digitised signature. A photograph will ensure that everyone registers only once in the system. We will also check birth certificates and passports with the original issuing authorities to ensure that forged or duplicate documents are not being used to fraudulently register people who have no entitlement to a card.

In addition, one of the most important security features will be the technology that will allow us to validate the cards when they are used in a reader. We will be able to immediately detect altered cards. Fake cards inserted into the reader simply will not work. The inability to instantly check the validity of our current cardboard and plastic cards is a major drawback.

Last year, I said that the smart card was a set of keys that would open a number of doors to a range of government services and benefits. That, of course, is a great benefit - a plus. This set of keys must have the best possible security and privacy protections in place. I am totally committed to a card design that will give all of us confidence that we have made a significant improvement on security and privacy over what we have now. This slide [The Access Card System] shows how our system will work.

Step 1 you dock your card in a reader and it goes through to the Secure Registration Service to validate the card. If the card is valid then in STEP 2, the agencies and users listed will be able to call up their own records in order to provide you with a service. Clearly their records are separate to the card and its records. I am committed to an open and transparent sharing of information about our system design, so that you can have confidence that we have chosen the best approach. There will be no Big Brother. We will not be amalgamating the agency databases or creating a centralised database holding all your information in one place. We will keep your existing agency records with the relevant agency - where they are now. The new card will assist us to improve the security and privacy of your information held by our agencies. In recent years we improved our staff computer access monitoring at Centrelink. The new software enables us to see if agency staff are inappropriately browsing customer records. You may have read that we had a number of (now ex-) staff in our agencies who we found to have browsed customer files when they had no right to do so. We dismissed 19 staff and accepted 92 resignations for inappropriate browsing. We did this because it is important that people know that their information is protected from misuse. Your personal details must be protected and I make no apologies for my agencies’ strict adherence to a zero tolerance policy of unauthorised staff browsing of customer records. It should go without saying that it is much easier to deliver privacy with electronic records than with paper copies of your personal details held in files. After the new card system is fully operational, I will seek to destroy old paper customer records that are no longer required to be held in our agencies.

I see no reason for holding information on people in our paper files for unjustified or unlimited periods of time, if it is not required by law. Procurement

I recognise that some of you in the audience are more than interested in what we’re doing on the procurement front. I can let you know now that we are going to implement this infrastructure project in 4 separate tranches. Our staff are working hard to prepare the packages to be put to market and my Department is planning to conduct an industry briefing to give you more detail this side of Christmas. We will seek tenders to enable us to establish a panel of card suppliers. One of these suppliers will also provide card management software for more than 16.7 million cards. A systems integrator will be sought to provide and install hardware and proven software that delivers the card customer system and the card operations system. The tender process for the systems integrator is also likely to include the supply of several thousand digital cameras, printers and scanners and potentially more than 500 booths for card registration. A request for tender will also be released to cover the acquisition of an estimated 15,000 terminals for use by Commonwealth agencies. We are also looking at establishing a list of accredited providers of transaction services. This would involve external parties providing their own terminals and networks to assist in the delivery of some of the functions of the Access Card. There are significant opportunities for Australian industry to get involved in this exciting program, and the Government looks forward to sharing more information about these opportunities with you in the coming weeks. Finally, I would like to say something about the registration process. The task of registering 16.7 million Australians over two years from 2008 to 2010 will be challenging. We will have to register about 32,000 people per business day. We will try to make this as easy a process as possible. Professor Fels’ Taskforce will be issuing another discussion paper this month that will canvass various issues relating to the registration process. He will be seeking submissions from the public. Professor Fels will consider these submissions and provide further advice to me on consumer issues relating to this project. In conclusion, let me return to where I began. My strong belief is that good government includes the successful delivery of services only to those entitled to the service.

We must use the best possible technology that will enhance consumer choice, minimise fraud, provide greater privacy and security and, most importantly, make dealing with government agencies easier for you. Through smart card technology we will be able to improve the customer experience and better protect the information that individuals entrust to their Government.

ENDS

Q&A Hockey 8-11-06.doc Page 1

This transcript is taken from a recording, and freedom from errors, omissions or misunderstandings cannot be guaranteed.

PRESS CLUB ADDRESS Questions and Answers

Wednesday, 8 November 2006

LAURIE WILSON: Thank you very much, Minister. We’ll take questions now from our working press members. The first one today is from Roger Houseman.

ROGER HOUSEMAN: Minister, thank you very much for this enlightened speech. Just a couple of quick points. Could you just reiterate the point value the new Access Card will have?

JOE HOCKEY: Roger, it hasn’t been determined but I would be … it will certainly not be 100 points. I’d be very surprised if it were 100 points but certainly I would not expect it to be anywhere near 100 points.

ROGER HOUSEMAN: As a regular traveller, will you be equipping Australian embassies with the capability of reading the card?

JOE HOCKEY: That’s not something we have thought about but if Alexander Downer wants to supply the money we’re happy to help out.

ROGER HOUSEMAN: And in a similar vein, as you know, Australia has a number of agreements with foreign governments, including New Zealand. Will the Kiwis have access to the Access Card?

JOE HOCKEY: Not unless they are entitled to the services.

ROGER HOUSEMAN: And will the Kiwi government be able to sort of [inaudible]?

JOE HOCKEY: That’s not something we have thought about.

ROGER HOUSEMAN: Okay. And lastly….

LAWRIE WILSON: Can you give us the final question while you’re there?

JOE HOCKEY: Yes, keep going.

ROGER HOUSEMAN: In terms of biometrics, is there anything innovative about the Access Card versus what’s internationally available?

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JOE HOCKEY: No. We have focused on off-the-shelf technology if you like. We are not seeking to reinvent the wheel in terms of biometric identifiers. There will be a biometric photo. We’re not seeking to break new ground in relation to those matters.

SIMON GROSE (Canberra Times): You say that the individual agencies’ databases will keep data separately but there’s an ongoing integration process of those agency systems. I’d like to ask you a couple of questions about that.

I was at a presentation a couple of months ago, by John Wadeson the CIO of Centrelink, and he said that the integration between Centrelink and Employment and Workplace Relations was going well. He said, ‘We can go to the far end of their system and back within half a second and they can do the same with us, but integration with Medicare was moving slower.’ He said, ‘It’s a little bit clunky at the minute because they have to separately logon. We haven’t got the integration fully there but it’s not two PCs at every desk.’

I wonder if you are happy with the progress of this integration? I wonder if you could characterise it at all? But also, I put to you that the clients of these agencies would not be aware that this level of knowledge is being shared across those agencies. I wonder what efforts the government has been making to make your clients—through those agencies—aware?

JOE HOCKEY: It is a little bit of a trick question and the reason why is because the largest client of Centrelink is in fact the Department of Employment and Workplace Relations. After the new government was sworn in and the Prime Minister created the Human Services Department, he moved the Disability Pension, Newstart and Working Payments over to DEWR out of Family and Community Services. And in doing so, the information related to that went with it of course—that’s a client base. So DEWR of course have access to their clients; Centrelink delivers the service. So

there’s nothing tricky or particularly new about that other than in those areas DEWR has replaced FACS—the Family and Community Services Department.

In relation to Medicare, there are very strict legislative protections in relation to data sharing but we are unapologetically using Medicare offices to help to deliver some Centrelink services and, in that regard, we are running shared service delivery.

Medicare offices are frequently used by a large proportion of the population that does not necessarily want to walk into a Centrelink office. As a good example: we recently announced an initiative in relation to LPG and the rebate scheme. More than 65 per cent of all applications have come through Medicare offices and only around 13 per cent through Centrelink offices. And people said to me, ‘Well, why would you use a Medicare office to distribute LPG?’ And the fact is that people are more willing to go into Medicare offices—they are more conveniently located, often in major shopping centres and they might be trading Saturdays as well—and the convenience factor is far greater. So we are using Medicare offices to deliver what we call more family assistance services, such as Maternity Payments, Family Payments and so on, so that families have ready access to those services out of Medicare offices. So I think that might have been where John Wadeson was focusing on how Medicare might be able to provide services that Centrelink also provides.

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DAVID CROWE (Financial Review): Minister, you mentioned how many of the recommendations from the Professor Fels report you’ve accepted. Of course there’s one that you are considering which is a recommendation that when people register for the card they’ll be submitting a lot of documents—I guess proof of identity documents. Now, one of the Fels report recommendations is that information be deleted once you’ve gathered it for the purpose of issuing the card. Your response to that is that you will consider that but, surely, to put some of those privacy fears to rest, that would be one that you could commit to now. Can you say why you wouldn’t commit to that? What are the arguments for keeping some of that information?

JOE HOCKEY: As I outlined in my speech, whenever you go to Medicare or Centrelink now and provide proof of identity, such as birth certificate, passport, whatever bills you have in order to prove where you live, it goes into this great big hole—275 kilometres of storage—and the physical copy remains in that place. In the case of the Child Support Agency I think it’s for 17 years or 30 years which, in my mind, is quite ridiculous. If it is electronically stored there is no doubt it is far safer. But we are moving mountains here, literally, and it is not only the case that you need to have a card that integrates with some of the biggest IT systems in Australia and can work smoothly from day one, we also need to ensure that we don’t compromise our existing database, that in fact we improve it, and the security is improved.

My goal is that we do not keep any documents in paper form. But we just haven’t had time at this stage to be able to come up with a definitive yes or no but it is something that is very attractive to the government. And I must say, it is also one of the very advantageous by-products of the initiative that, hopefully, we can, over time, remove that 275 kilometres of Centrelink paper and the three square kilometres of Medicare forms. If everyone thinks how many times they have filled in a Medicare form, signed

it—where’s it gone? Well, it’s in storage. And what a waste of paper as well.

GERARD McMANUS (Herald Sun): It’s terrific that now everybody in Australia can be their own Big Brother. I’d just like to ask you about two particular groups of people—how you are providing for those. One, is people with disabilities who can’t or who are unable to sign their card and also for genuine conscientious objectors, who for whatever reason either personal or religious grounds or whatever, do not wish to have this card?

JOE HOCKEY: For those people who don’t want to have the card—fine. That’s their choice. They can pay for a service. Because we need to have a system that has integrity. If people can opt in and opt out of the system—there are some people, just a small number—that will see a flaw in the system and will rush to it. We need to have integrity about our system. We need to provide security in the system to protect all individuals as well as the taxpayer. So if you don’t want to present your Medicare card—and I might add, I think the average Medicare claim, for example, men under the age of 40, is one per year. There are a lot of young people that don’t even have Medicare cards—that’s fine, no problems. If they don’t want to present their Medicare card they don’t have to and if they don’t want to get an Access Card they don’t have to. But our system needs integrity and we will do that.

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Now, in relation to people with disabilities—for example, people with disfigured faces and so on taking photos—we are going to work through the issue in a compassioned and understanding way. We have already a number of challenges.

People don’t carry their cards when they go and visit a doctor, particularly in remote Indigenous communities. There are a large number of people, believe it or not, in Australia who have never registered with Births, Deaths and Marriages—that’s one of the challenges we have as well. And the state births, deaths and marriages registers are very clunky. Some of them don’t even have all the documents on a digitised database. So there are an enormous number of challenges but, in short, if there are special circumstances we are going to clearly outline how we deal with that before the first card is issued.

ANDREW FRASER (Canberra Times): Your frustrations that the Access Card will be seen as another Australia Card has been palpable over the 18 months since the idea was first floated. Similarly, you must have experienced some frustration when you recently noted quite reasonably that the Stock Exchange could handle the full sale of T3 in one bite but older heads along your front bench quickly kicked that idea into touch for you. I am wondering, given your more recent experience in the real business world and many of your colleagues, how often you come up against that type of frustration where you know what can be done but you have to wait for the political system to catch up? And as the second-youngest member of the federal ministry, what are you doing yourself to close that costly divide?

JOE HOCKEY: Well, why don’t we have an intimate conversation after?

Look, you know, it has been … I mean, I’ve been a minister for eight years and each of the initiatives I’ve come up with I’ve found that the Prime Minister, in particular, has been very supportive. You know, the Takeovers Panel, Financial Services Reform Act, and the tourism white paper—if the Prime Minister didn’t support it that wouldn’t have happened, and the Enterprise Culture Program in Small Business which I am very proud of. In this case, in the Human Services, electronic claiming of

Medicare, which we are delivering next year, he’s been very supportive of. And the Access Card—he’s been very supportive of.

And it’s because the government, no matter how old the heads are—to use your terminology—needs to keep in touch with the future needs of Australia. So it doesn’t matter what we do, if we are not in touch with what people want and will need over the next few years, we will be totally removed from the community we are seeking to represent. So I find the capacity of the government to embrace new ideas is still very vibrant and I welcome it because, you know, I enjoy coming up with new ideas and new initiatives. That’s hopefully why we go into politics—to make a difference.

MARK METHERELL (Sydney Morning Herald): You mentioned that people will be able to, if they wish, have details like organ donor status, medical details requirements, put on the card or on the chip. Where will that information be read? Presumably at hospitals. Doesn’t this inevitably mean that the Access Card will be

central to the e-health arrangements once they are rolled out?

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JOE HOCKEY: Mark, I am wary of overpromising and underdelivery. Lots of people have made commitments in relation to e-health over the years. It’s not particularly a space that I want to embrace. However, we are building infrastructure; that’s what we are doing. This is a card for our purposes but this is important infrastructure because every Australian that chooses to have a card will have a card. And it is a new technology that will be embraced by others. Where the chip is located on the card, how the card can be read, the size of the card—fitting into the EPTOS devices—the fact that you can have a reader that big, with a chip, or you can have at your home computer. This is a reader—$25 with a USB port … common usage. And that’s why this is vital infrastructure. And the fact that we are giving ownership of the card to the individual says you control the card. So if you want to put other information on it—terrific.

Now, it might be the case, for example, that the AMA says, ‘We are very concerned that only properly authorised medical information goes on to that open space in the card’—and that’s fine by me. I think that’s right. And they’ll say, ‘Only AMA authorised readers can pick it up.’ And so they might create a safety deposit box for information, that is run by the AMA—not by the government—where you can dock your card and download onto the card information about your medical condition so that in hospitals that information can be read immediately. That is a massive improvement on anything we have at the moment. And if the AMA wants to run it, or any other medical organisation, provided that they are trustworthy and so on, we will work with them on that. The suggestion that this is a mini iPod is a powerful suggestion.

Now, we are using two-thirds of the capacity on the chip, the other one-third is in the hands of the individual and all the information on the chip will be seen by the individual owner of the card.

MARK METHERELL: So there won’t be any infrastructure automatically [inaudible]?

JOE HOCKEY: The question is: so there won’t be any infrastructure automatically established?

If consent is provided, here’s the infrastructure—$25 or a link to a computer. We’re making it very, very … a simple system that is very secure, very robust but empowers individuals. This is very important infrastructure. A lot of people feel very vulnerable carrying multiple cards in their wallets. I do.

There might be the choice where you could have multiple information that sits in your wallet, in your card, and you can have a separate pin number—if you can remember them—for each of the fields of information. That is more secure than anything that sits in your wallet or purse today, and that’s why it is significant infrastructure.

Now, the Victorian government is following a similar path with their myki transport card, which is a smart card, but they are putting an electronic purse on the card I understand. Well, this is a similar concept but I think very secure.

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ANNABELL STAFFORD: Minister, there have been some fears raised that the biometric photograph that will be on the card—and as I understand it in the database—could be used to identify people caught on closed-circuit television. Could

it ever be used for this and in what circumstances?

JOE HOCKEY: Annabel, we will obviously release all the protocols associated with access to the database when we finalise that. At the moment, if police … for national security purposes, there is very broad power in the hands of the police, and national security agencies. They can get CCTV. They could probably get photos out of state traffic authorities because your photo is already in state traffic authority databases … and there are multiple photos, for example, already in passports and a range of other places. So it is about the security of the individual that we are focused on but we are not rewriting, as far as we are concerned, data sharing arrangements between any of the agencies.

PATRICIA KARVELAS (Australian): Might you consider making that $25 cord free for poor people and … or even rich people who like free cords? I am just wondering you might give them away. And as an MP Sydney where people obviously have borrowed heavily to finance their homes, are you concerned about interest rate rises?

JOE HOCKEY: Well, you only get one question—and I’ll answer both.

Firstly, in relation to interest rate rises, I mean, we all … well, I don’t know about you but I have a mortgage. I think a lot of people have mortgages, others also have credit cards that have interest payments on it. I take great comfort in the fact that the interest raise today … interest rates as of today are still lower than anything under Bob Hawke or Paul Keating. Interest rates under Bob Hawke and Paul Keating never reached the level of an interest rate today. And I think Australian families take great comfort in that as well.

And in relation to the reader … having talked about interest rates … in relation to the reader, these will come down in price because they’ll be so accessible to so many people and there will be demand and supply. And I believe in free markets, Patricia. And you know what, people are leaving here already to go straight out and make their order of these readers and….

DAVID SPEERS (Sky News): If I could ask you to put your other hat on as the Minister Assisting the Workplace Relations Minister. Do you think wages will go up or down under Labor?

JOE HOCKEY: Well, you know what, David, under 13 years of Labor, real wages went up, what, 0.3 of one per cent … maybe a little more … around one per cent. Under 10 years of the Howard government, real wages have gone up by more than 16½ per cent. So if you compare the two periods, the workers of Australia are far better off under the Howard government, far better off under the Howard government.

Let me just make one other point: the world going forward is going to face lots of challenges. We are entering an era of tremendous opportunity with the new entrants—

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China and India—into the free market. Australia has to be flexible, it has to improve its productivity, and we are doing that with a vast range of initiatives. One of those initiatives of course is WorkChoices. And I make no apology for being a strong advocate for WorkChoices because under WorkChoices real wages increase, industrial disputation decreases and there are more jobs created today than in any comparable period over the last 15 years—in fact since WorkChoices, 205,000 new jobs have been created. So if you have that structural reform such as WorkChoices, it means that the labour market is more flexible and can respond to the changing dynamics of the marketplace and that, hopefully, will continue to make the economy stronger, more flexible, it means that productivity improves, and out of that we can avoid the wage spirals that we saw under Labor that weren’t based on productivity but were based on union bargaining power—and that was bad for Australia.

MICHAEL BRISSENDEN (7.30 Report): ‘Trust’ is a very loaded word in politics these days but in your speech here, where you say there will be no Big Brother, we will not be amalgamating the agency databases or creating a centralised database et cetera, et cetera. I just wonder if you’re asking people to make a big leap of faith here and what’s to stop any future government disregarding all of the checks and balances that you’ve put in place?

JOE HOCKEY: Well, it’s a court of public opinion. I mean, you know, we listen. It’s fraught with danger if you think that you can just, as a government, defy public expectations and demands and pretend to get away with it, to sneak it through. You can’t. I am legislating this. It will be clear in the legislation. I am not seeking to change any data sharing arrangements that currently exist.

Governments can change laws but they can change them now. If the government is in touch with the community it listens to the community. That’s why we set up the Fels taskforce. The Fels taskforce has gone out and visited towns and cities around Australia, consulted widely, came back and people said, ‘Look, this is what we want.’ They said, ‘We want ownership of the card.’ In what appears to be a world first—I am sure there will be someone who will find the exception—but in what appears to be a world first, we’re giving the card to the individuals. And others said, ‘We want these

sorts of capacities—the shopping list.’ In the open zone, if that person wants to put their shopping list, they can. Really quite an interesting application but, you know what, I don’t want to prescribe how people live their lives—and the government doesn’t want to do that. We are very mindful of the court of public opinion.

GLENN MILNE (News Limited): You asked me over lunch not to ask this question so of course I am going to. I note that you are a Republican, and in the design of the card the Southern Cross is featured but not the Union Jack. I just wondered whether there might be a certain Big Brother further up the ministerial chain of command who might take an interest in the design of the card?

JOE HOCKEY: Well, it’s an omission. This is not the final design of the card. It’s not the final design of the card and, quite frankly, it might not even be called the Access Card. We’re pretty open about that. I mean, it’s the people’s card and we are getting feedback now from the community about what they want it to look like and what they want to call it. So thanks for that question, Glenn.

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LAURIE WILSON: We’ll conclude on that note.