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Standing Committee on Infrastructure and Communications
27/05/2011
Role and potential of the National Broadband Network

ARCHER, Mr Glenn, First Assistant Secretary, Policy and Planning Division, AGIMO, Department of Finance and Deregulation

EDGE, Mr John, First Assistant Secretary, Government Business, Special Claims and Land Policy, Department of Finance and Deregulation

CHAIR: I welcome representatives of the Department of Finance and Deregulation. Although the committee does not require you to give evidence under oath, I should advise you that the hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. We have a written submission from you. Do you want to make an opening statement perhaps to highlight the key points of your submission? We will then have a question-and-answer session.

Mr Archer : Certainly. The submission touches on the opportunity that the NBN provides to the country in relation to the provision of government services or improved government services, the potential to achieve the increased use of services that we know or believe exists and the demand that exists from citizens for better online services from government. It also touches on the degree to which there is an opportunity for government, in the way in which it builds its own IT infrastructure and supports its own operations, to do things better; to enable staff, particularly in regional and remote locations, to operate more effectively; and, in a local environment, to deliver better services to citizens.

CHAIR: We have had quite a bit of evidence about the capacity of government services to be more effectively delivered in an NBN environment. One of the issues that has been raised with us is shifting the culture of departments. Without wanting to appear to pick on Centrelink, they have been regularly used as an example in various submissions to us. There is an online process, but still at the end of it you have to print stuff off, take it in and line up at a service. There really need to be some significant shifts in the way that, as government, we do business with our broader community. I am interested to know how we are rolling out that particular program through all departments. Is it a focus of your group to provide leadership? Where do you think the most useful direction of that energy is in the initial stages?

Mr Archer : I guess I would go back to the premise of the question. I am aware that there is a small number of situations where customers of Centrelink do need to provide some form of written submission in conjunction with online services, but there is a very large number—something in the order of 40 to 50 online services—available on Centrelink's website today. The vast bulk of those can be completed or the business can be completed by the citizen without visiting a Centrelink office at all.

CHAIR: Can you give us a picture of what the nature of those types of services are?

Mr Archer : Obviously, I do not represent the department, but, off the top of my head, some examples would be families who have to provide their income estimate for the future year—that can be completed entirely online; customers who are required on a fortnightly basis to report their employment income—that can be completed completely online; customers who are interested in inquiring as to the current state of payments and what their next payment might be or wanting a printout, as it were, of their past payments—again, that can be completed entirely online.

CHAIR: Would you characterise those as basically follow-up services or provisions to existing clients of the department? To fill you in on where I am coming from, the evidence that has been given to us is that in the initial stage people will turn up and be told, 'Do it online'. They go away, do it online, print it out and come back. If the initial interaction with the department is not a good one online, it discourages people from continuing to interact online. There may be issues to do with identification and so forth—I appreciate that. But, if there are some initiatives around that area—

Mr Archer : Certainly in the context of citizens applying initially for a benefit or some entitlement from Centrelink, there may very likely be a requirement for proof of identity. I certainly understand that Centrelink commenced online updates of study details for the youth allowance in March 2008 and parental income in June 2009 and the vast bulk of that process could be completed online. But there was a requirement at the end to prove who you were, essentially, and that in reality could only be done by some form of face-to-face process or by the lodging of the documents.

CHAIR: Are we working towards a more cross-department capacity? With some of that identification and proof, it would appear to me that you are printing out something that is held by the department of health about you. To some extent, if we had cross-departmental connections, it might facilitate that for people.

Mr Archer : I think there are two issues in that space. The first is the formation of the Department of Human Services and the bringing together of Medicare, Centrelink and child support represents an opportunity, I know, for that department to look to integrating much better the various processes that they are required to undertake in-house and also to improve the experience for customers and citizens who have a need to interact with Human Services in more than one of those contexts. Secondly, and specifically to that case, my own agency is supporting the Australia.gov.au website, which enables customers of those entities to essentially establish a single logon at Australia.gov.au. That is entirely at the discretion of the citizen. They can choose to establish that logon and then choose to associate their credentials that they may already have in an online space with those agencies and they can choose to do one, two or three.

CHAIR: How long has that been operating for? Do you have figures on what the uptake of that is?

Mr Archer : I believe it has been in production since January. I do not have figures, I am afraid, in terms of numbers.

CHAIR: It is fairly new. Would you be able to get us some idea of the initial uptake and interest in that?

Mr Archer : I am sure I can do that. Since the inception of the autralia.gov.au accounts the number of accounts has grown from 6,776 in February 2010 to 141,729 in May 2011.

CHAIR: That would be very useful. I am conscious that there are some developments in the US around establishing a single online identity so that people can better connect across services, which sounds similar to what you are talking about. The other thing that I wanted to go to with you is the issue of teleworking. I think it would be fair to characterise a lot of the businesses that we have met as particularly in the professional services area—in IT, finance and so forth. Broadly, teleworking might be just people who do contracts working from home. The crossover between the two definitions seems fairly fluid. I am just wondering how your department is looking to support teleworking if we accept the evidence that it can cut down on greenhouse gases and city congestion and can lead to improved community and family facilities and all of the sorts of benefits we have heard about. I understand that in the US there is actually a more structured piece of legislation that mandates around teleworking other models that might be useful in progressing that.

Mr Archer : I guess the key or most relevant piece of work that we have already done in relation to teleworking has been the development of a policy and guidelines for agencies for teleworking for ICT staff across the Commonwealth. That policy was put in place around two years ago and it provides, essentially, guidelines for agencies about how to enable this, how to support their staff in this environment, how to take into consideration issues of OHS and what sorts of practices you might need to put in place within the operations of that section to support the staff.

CHAIR: Once you have the guideline, is it a fairly easy process to do? Are there barriers to it that we should be aware of?

Mr Archer : The obvious barrier, and I guess the reason we are here today, is often network capacity and having to address the particular capabilities of broadband or not within the employee's home or other location. That is often a particular barrier and it can be a showstopper.

CHAIR: It will probably sound strange to ask why it is IT, but that would probably be the obvious place to start. Is there a broader government agency policy on teleworking or does it happen ad hoc on individual arrangements? Do you know what the status is more broadly?

Mr Archer : Certainly it does happen on an ad hoc basis. Individual agencies have positions on teleworking.

CHAIR: Have you been able to look at it over the broad when you were developing the one for IT workers? Did you look at models across departments or what was happening?

Mr Archer : I am sorry, I cannot comment on that. I was not with AGIMO at the time that policy was under development.

CHAIR: We can talk to the other departments as well about that.

Mrs PRENTICE: As part of your remit in overseas information and communications technology for the government, have you in the past requested or laid fibre connections to facilitate what you do?

Mr Archer : AGIMO is responsible for the ICON network—that is the intergovernmental network that connects all agencies within Canberra, or almost all agencies within Canberra, via fibre. It is unique to Canberra, though—we do not go outside Canberra.

Mrs PRENTICE: With NBN, will you look at perhaps decentralising some of your staff? Can you look at perhaps setting up branches in regions?

Mr Archer : It has certainly been recognised that there is an opportunity and even a need perhaps to look to utilising available ICT skills outside Canberra. Many departments, including Centrelink and the Taxation Office and others, have established quite significant numbers of staff in capital cities across Australia. I know that, in Brisbane, Sydney and Adelaide, there are certainly substantial numbers of Commonwealth ICT staff supporting agencies. The NBN represents an opportunity to, I guess, push that further. I should add that, in the context of the review undertaken by Sir Peter Gershon some 2½ years ago, he also identified that that was an opportunity for agencies and we are working with a small number of agencies in pursuing it.

Mrs PRENTICE: You also refer on a couple of occasions in your submission to the cloud computing and strategic direction paper, which I have to admit I have not read, from January this year. Could you just outline for us what the direction you would like to see us take to full cloud computing?

Mr Archer : You are aware of cloud computing—you have had a discussion about it?

Mrs PRENTICE: Yes.

Mr Archer : The cloud computing strategy for the Commonwealth which is now an endorsed strategy essentially looks at the different types of clouds—the public cloud, the private cloud and the hybrid cloud—and classifies the different types of services and operations that you might look to use on a cloud platform and then the time horizon in which the Commonwealth and its agencies might be able to make use of that. In many cases, that is right now. For instance, AGIMO uses a public cloud today to support its data.gov.au site. We can do that because essentially that data is already in the public domain. There is no added risk of exposure by placing the data on a public cloud. There are many other examples that you can think of. For example, you explicitly want to have departmental websites in the public domain by default. The cloud represents quite an interesting opportunity for agencies to host those sorts of data and services externally in the sense that it can often be done more cheaply; it often provides greater reliability; it can provide greater capacity and performance in terms of network responsiveness, because many cloud vendors architect their environments to support that; and it does this essentially in an environment where you are not exposing personal, privileged or security information. At the other end of the extreme is the situation where you might have information that might be held on citizens—for example, by Centrelink—that might be quite private or you might have information that is of a national security nature. Explicitly we have said in the strategy that that is something we would not support at this time being hosted in a public cloud. There are about 20 examples in between which we have considered.

Mrs PRENTICE: What you are providing now is a sort of a cloud—from our offices, for example. What sort of speed you need for that? Are you just using the current 12 megabits?

Mr Archer : I am sorry; I am not actually up to speed on that.

Mrs PRENTICE: Do you need the galactic speed that someone asked for before? Do you need 100 megabits per second to do this cloud computing?

Mr Archer : It is absolutely critical that you have high-speed broadband network to support cloud. You need to have that as a cloud vendor. If you are looking, as a cloud vendor, to provide cloud services in Australia, you have to be able to connect to broadband and you have to be able to distribute that service widely to large numbers of customers. If you have, say, large volumes of photos—in my own case, I have my personal photo library provided by a cloud server; if I want to download images on that, I want that to be fast—and each image is five or six or seven megabytes, you actually do need high-capacity broadband to support cloud.

Mrs PRENTICE: So the slow speed of our office computers is a bid by you for an increased speed? I am sorry; you do not have to answer that.

CHAIR: We will take that as an observation, not a question. And I will get my dig in about not being able to use Skype in Parliament House at the same time.

Mr SYMON: I have just one or two questions relating to your submission, and they are about the preferred method of contact with government—in particular, the 2009 report, Interacting with government. The column you have there for internet connections I presume also includes people who have contacted you by email. There is not a separate column for email. We have 'internet', 'telephone', 'in person' and 'mail'.

Mr Archer : I would have to check the detail of the survey, I am sorry, to confirm that. My presumption is that that is internet. Most government agencies do not support email as a correspondence method because there is no way of establishing a credential.

Mr SYMON: That is the problem I have with my own electoral office on a daily basis.

Mr Archer : Right. So, for instance, if you wanted to email Centrelink, they would not be able to know who you were and they certainly would not be able to reply with any information that might touch on your personal circumstances. That is one of the fundamental reasons that internet does enable that—it allows you to give to a citizen a credential, a password and a logon.

Mr SYMON: And after that stage, it can then be done by email?

Mr Archer : No, it is all done by web.

Mr SYMON: On a secure session of the web?

Mr Archer : Yes.

Mr SYMON: Further down, I think on page 3, you mentioned in your submission that those who have broadband connections are three times more likely to prefer to contact the government by internet and that figure was 54 per cent compared with 16 per cent, which I found quite eye-opening.

Mr Archer : Indeed.

Mr SYMON: It is good to hear that. But my real question is: once we get ubiquity for anyone who can afford to pay the ISP—because they have a broadband connection; there will be some people who cannot—do you have an end point for that figure? Have you made any projections in that way?

Mr Archer : I have not made a projection, but there is certainly no presumption that internet would be the only way of interacting with government.

Mr SYMON: I do not think that was really the gist of my question. It is never going to be 100 per cent; I am certain of that. But would it not be the case that people who have broadband connections now are more than likely to have the financial means or the technological knowledge to be able to do it at a higher level than if you put it across the general population?

Mr Archer : I think the parallel might be the telephone. With the telephone becoming pervasive in Australia 50 or 60 years ago, obviously there was a take-up in dealing with businesses and with government by telephone fairly slowly initially and then it ramped up and we saw the emergence of call centres as being the primary way of dealing with customers. But you will never get to 100 per cent.

Mr SYMON: No.

Mr Archer : But do we have a target that we want, like 90 per cent? Not that I am aware of.

Mr SYMON: I am sure that would change over the years to come.

Mr Archer : Indeed, and it would also change by dint of the nature of the services you could offer and the degree to which the NBN suddenly enables us to build more engaging services and to have a videoconference link with a Centrelink officer or a Medicare officer. That might further enhance the experience and the adoption.

Mr SYMON: This is further down in your submission. What are the current opportunities for government to grow in that area? I think you have just touched on a couple of examples.

Mr Archer : The current challenge is that, in architecting online services for customers, you have to essentially build them to the lowest common dominator. The lowest common denominator at the moment is the individual in far-flung rural Australia with a dial-up line.

Mr SYMON: You do not have to go that far.

Mr Archer : Indeed—not very far from the ACT is dial-up the only option. That means that, when agencies, be it Centrelink or Tax or whoever, are building these services, they often have to build them understanding that that is the limit of the capacity of the citizen to deal with the internet and transact with the internet. Many of them are entirely character based. If you look at the Centrelink site, you will see that it is not very graphic-rich and that is a deliberate decision, because it is architected around what is known to be the limitations of citizens trying to make use of it. As we start to see broadband roll out more broadly across the country, we will all be presented with the opportunity to make that experience richer.

Mr SYMON: Is there any reason why currently you do not operate that system with a high res and a low res or a high bandwidth and a low bandwidth scenario? I know a lot of sites do. You choose which one depending on your connection—not government sites, I might add, but commercial sites. If I want to watch a YouTube video, for instance, I can choose high or low res. If you have that richer content other than just text, could you do that as a dual method of delivery?

Mr Archer : There is no technical reason. Obviously, as broadband becomes more available, agencies might need to consider adopting that sort of approach. To date I am not aware of agencies that have a button on the first page that says, 'I want a high res version' or 'I want a feature-rich version' or 'I want a low resolution'. I am not aware of that being done. It may be as simple as an issue of complicating the maintenance of the systems behind the scene. Often what is painted to the citizen as a very simple screen is incredibly complex behind that window, as it were.

Mr SYMON: They just see the finished product.

Mr Archer : That is right. If you were to attempt to try to instance many ways of interacting with those systems then supporting a diverse range of software and applications could become quite problematic.

Mr FLETCHER: I am interested in knowing whether the department has done any work on efficiencies or cost savings the government might expect to capture from moving to service delivery methods of the kinds that are facilitated by the NBN.

Mr Archer : Obviously, we have looked at opportunities in the area of service delivery reform, particularly with DHS, to enhance the types of online services they can provide and the opportunity that will provide DHS in terms of savings in their own operations. I do not have those in front of me, though.

Mr FLETCHER: When a decision was taken to move away from the previous model of fibre to the node and replace it with fibre to the premises, was the department asked for or did the department provide advice on the merits of that course of action?

Mr Edge : Your question is whether the department of finance was asked to provide advice around the decision to move away from an FTTN type model?

Mr FLETCHER: Yes.

Mr Edge : The department was obviously involved in providing advice to government at various points in that process, but more specifically is your question about savings that might be realised through service delivery?

Mr FLETCHER: I guess more generally I am just interested to know whether the department recommended the NBN structure as we have it now.

Mr Edge : I am not in a position to advise on the nature of advice that the department has provided to government.

Mr FLETCHER: You talk about some of the benefits that will flow. What are your thoughts about the respective importance of speed and ubiquity in facilitating more efficient delivery of government services? Are they the same thing or are they different dimensions?

Mr Archer : I think they are different. Obviously ubiquity means access for all, essentially. Speed is important because it allows you to build rich services for citizens that you have confidence are available at that level of performance broadly across the country.

Mr FLETCHER: I will put the question another way. There is benefit in ubiquity at a range of speeds—would you agree with that proposition? In other words, would ubiquitous availability at a speed materially lower than 100 megabits per second, have of itself benefits, including in the delivery of government services? If you were told, 'Sorry, it's not going to be 100 megabits per second anymore but there's going to be ubiquitous 10, 12 or 20 megabits', would that deliver benefit in the delivery of government services?

Mr Archer : It would significantly deliver benefit at the moment, given that the threshold at the moment is actually in the tens of kilobits versus the number of megabits. Clearly in architecting future government services following the rollout of the NBN, based on our current knowledge, we could build services knowing with confidence that the vast majority of citizens would have access to 12 megabits or something in that range.

Mr FLETCHER: I am interested in any counsel you may have for us as to one of our terms of reference: the optimal capacity and technological requirements of the network. What is the right way for policymakers in a world that does not have unlimited resources to think about what is the optimal point?

Mr Archer : I guess it comes down to flexibility—making a decision that provides you with the most flexibility and the best upgrade path. There has obviously been significant discussion about the benefits of fibre in that arena—the degree to which fibre has seen a progressive increase in its capacity to support faster and faster broadband. If you were making a decision about what to put in place today and that was a significant amount of money, as this is, then you would want to look at making a choice around the technology that arguably demonstrated the greatest benefit into the future so that you could continually leverage and build on that.

Mr FLETCHER: Does cost come into that consideration as well?

Mr Archer : Of course it would have to be a factor.

Mr FLETCHER: Is it a fair characterisation of the policy strategy behind NBN that you build a network which is expected to secure sufficient traffic from the residential market to be commercially sustainable and in consequence of that it can then be used to deliver education, health care et cetera? If so, how should policymakers think about the question of whether the network and the model are in fact commercially sustainable?

Mr Edge : Mr Fletcher, I am not quite sure how to answer that. The government has stated its policy objectives for this project. The government's policy has multiple objectives. It is to provide access to high-speed broadband to the Australian population using a variety of different technologies. There will be multiple uses for that technology, be it residential, business, community, health, education—there are a range of potential users of this network. All of those different user groups will derive benefits from access to the network in different ways.

Mr FLETCHER: The parliament's thinking about the capacity of the National Broadband Network to deliver on this series of objectives has regard to whether the present business model is commercially sustainable.

Mr Edge : The government has made a number of policy statements about the NBN at various points over the past couple of years. The government has indicated that the rates of return that have been identified in the corporate plan that was released in December last year are acceptable rates of return from the government's perspective. That is effectively the government's policy position.

Mr STEPHEN JONES: When personal computers were introduced into offices we were advised that this heralded the era of the paperless office. That was in the early 1990s. In about 2001 we were advised that there were enough pages printed to circumnavigate the globe, if paper can circumnavigate anything, about six times. I am told it has doubled since then. I am advised pretty reliably that when email is introduced into a workplace the number of pages printed increases by about 30 per cent. All of this leads me to question some of the courageous assumptions that the introduction of the NBN and broadband technologies will lead to a decrease in the amount of work for either business or government. In fact we can probably be fairly confident in saying that it will shift the pattern of demand and shift what customers expect and what citizens expect of their government. I am interested in whether AGIMO, as one of the thinkers about government IT strategy, is factoring this sort of analysis into its planning and thinking about government service delivery.

Mr Archer : We certainly are trying to do that. We published just recently our draft vision for ICT, which touched on a number of issues in relation to increasing productivity within the APS and the way in which we believe there is an opportunity in the context of extracting from better and smarter use of ICT greater and greater productivity.

Mr STEPHEN JONES: Productivity does not necessarily mean savings in terms of staffing or personnel, for example; it may actually shift them around a bit or—

Mr Archer : No, it does not mean that—absolutely. Government programs continue to change. We see technology continuing to change. This may be a good example, touching on your earlier comments about paper. Again, I am sorry to use Centrelink as an example; it just happens to be one I know reasonably well. Centrelink have recently moved to a process by which they scan hundreds of thousands of documents on a weekly basis and are then able to distribute those documents within Centrelink to move the work flow to where they have staff who are able to process them. In the past it would take days for physical files to be transmitted between offices to allow them to be processed, and now it takes a matter of seconds. Clearly higher speed broadband within the Centrelink environment allows them to do that even more efficiently. Certainly at the moment they are constrained not by lack of staff able to do the scanning and not by the scanning process but by the fact that they have to transmit those images across their internal network. So there are certainly opportunities for technology to do that. I think there will be any number of examples where business processes can use technology to deliver a more productive outcome both in terms of the operations of Centrelink and similar agencies and in terms of the experience of the citizen.

Mr STEPHEN JONES: I agree with you. I am familiar with those Centrelink process. I guess the point I am making is that that does not occur in a vacuum from the citizen's point of view. Once it becomes normalised from a citizen's or a consumer's perspective they change their expectations of what government departments or businesses should be able to deliver. Before fax machines we used to expect a reply to a letter within a fortnight. When fax machines were introduced we expected a reply within a week. With SMS we expect it within a minute.

Mr Archer : You are right. The birth of online services at Centrelink occurred in November 2002. One of the drivers there was online banking. Many people looked at their online banking experience—which in those days was often just inquiry and maybe transfer; I am not even sure whether BPAY was in place—and wanted to know why they could not do that in their interactions with government. And I expect we will continue to see that sort of comparison where citizens have a positive or worthwhile experience in dealing electronically or through technology with another party and say, 'Why doesn't government do that?'.

Mr STEPHEN JONES: The point I make—which you may or may not wish to comment on from a department of finance perspective—is that the benefits to citizens or to the government may not be reduced spending on the provision of government services. However, they may be a greater quality of service and a greater variety of services that are available to meet their enhanced expectations.

Mr Archer : I would like to think that both parties would gain from this.

CHAIR: I want to come back to an issue that was raised by the Inspire group who run the ReachOut program online. It is a website for young people around mental health issues and so forth. In one of the European nations the government provides a website to analyse online health resources. We talked about the example that if you google a symptom you find you definitely have cancer because a lot of the sites that come up are driven on the basis of getting you in—because they are run by drug companies or whoever—to have tests and do further investigation. Often citizens do not perhaps yet—maybe they will in the future—have full digital literacy around what websites are and how you interrogate their origins and bona fides and so forth. So governments in some places have started providing web based services that allow people to do a bit of analysis, particularly in the health sector, around this. A young woman who is an ambassador for this service said to us that it is increasingly the case that people give legitimacy to websites based on peer review. In the travel industry we have seen the expansion of peer reviewed sites on services. Has there been any consideration by government of those two options in relation to a service to help people work through the net, not just web based services from the government?

Mr Archer : I am not aware of any programs or consideration on that.

CHAIR: My observation, purely as a citizen, from looking at government websites is that they are very old-fashioned and static. I understand that that is because of the issue of needing to have lowest common denominator access. My fear is that if that is people's experience and they have a much broader, richer experience elsewhere then they are likely to give up on looking for online services.

Mr Archer : One of the real challenges is to build services that can meet the needs not only of citizens generally but also of citizens who are in some way disabled. That is quite demanding of web designers. It is a challenge I think we are up to. We still have some work to do in that space. We certainly are looking to pursue that. It does constrain how dynamic you can make a page. It does place an additional obligation on the page designer and creator and the technical folk. But it is a necessary requirement.

CHAIR: An interesting challenge for you is the balance between a service that people value and therefore use regularly—the tourism industry tells us, for example, that if people go on a website and it does not react the way they want then they give up very quickly. I think that is a new way of interacting that will become more and more common and is a challenge for the exact reasons you are outlining.

Mr Archer : In the commercial environment it is called the dropped shopping cart because people just walk away.

CHAIR: Given, as you have just told us, that people drove change with online banking, I think it is a challenge for government to keep up so that we are not the dropped cart.

Mr Archer : That is true, although we would like to think that in some cases we are actually leading as opposed to following.

CHAIR: Good. Thanks very much for your participation in the inquiry. You will be sent a copy of the transcript of your evidence, to which you can make corrections to grammar and fact. The transcript will also guide you on any additional information that you have undertaken to provide. It would be appreciated if you could forward additional information to the secretary as soon as possible, as we are now commencing the process of formulating our report. Again, thank you.