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Economics Legislation Committee
01/06/2015
Estimates
TREASURY PORTFOLIO
Australian Bureau of Statistics

Australian Bureau of Statistics

[17:30]

CHAIR: I welcome the officers and Mr Kalisch. How are you settling in?

Mr Kalisch : Settling in very well, thank you, Senator.

CHAIR: Good to have you back here and thank you for coming. In an effort to try and make family life better here in Canberra, we have got you in earlier to get you home earlier, hopefully. The last time you were here you spoke to us of the risks associated with an ageing and complex ICT system, and I said you might be a victim of your own success and things like that. We need to improve that, obviously. The government recently announced $250 million of investment into the ABS ICT infrastructure. You have got to say that you are happy with that. Is that a fair question?

Mr Kalisch : That is a very nice opening question.

CHAIR: What changes are being made? What are you going to do now? Perhaps you could outline that broadly: what is here and what will exist later?

Mr Kalisch : Thank you. Perhaps I could give you a bit of a sense of the transformation within the broader context as well. The bureau has sufficient funding to do the major transformation of our statistical business systems. The ABS has sufficient funding to do the 2016 census—to do a full census next year—and we have sufficient funding to maintain the rest of our statistical work program. It is very much a good-news story in terms of information for the users of statistics, the users of data across the country. The ABS has been working for some time on the business case for the statistical transformation program. I want to pay particular regard to my predecessor, Brian Pink, for initiating the process at the bureau to progress the business case and, probably even prior to that, identifying the need for the bureau to do this work and then for the bureau to complete it and to provide such a compelling case to government that this change was necessary and that the government needed to invest now and invest in this way. I might hand over to Trevor Sutton to talk about the statistical transformation program in some detail. I first wanted to also reflect that the transformation at the bureau is more than just an infrastructure investment as well. We are looking at improving our stakeholder engagement and improving the use of ABS data and are also looking at our broader internal processes around governance, people, culture and infrastructure as the fourth element.

CHAIR: Before you go to Mr Sutton, you must be a sweet talker with the Treasurer. Has there been this level of investment in the ABS before?

Mr Kalisch : As you know, I have only just joined in the last six months, but certainly, in looking at the data that I have seen, I have seen the way in which the bureau's financial resourcing and staffing profile has been reducing over at least 15 years. This has been a long-term decline in terms of the resources available to the bureau and this is the first significant up-kick in resources. Money is still a bit tight. We have still got to make some sensible choices, but that is not a bad place to be.

CHAIR: All right. Mr Sutton.

Mr Sutton : Thank you, Senator. As my colleague David Kalisch indicated, basically over two decades had gone past without any significant capital investment in the bureau, so obviously this is very welcomed. This allows the ABS to transform its statistical business systems. As we clearly indicated, we had systems that were aging somewhat inflexible and quite fragile, and we had been experiencing some issues as a consequence of that in more recent times. So, yes, it is extremely welcomed that we are now able to invest in our infrastructure and bring it up to a 21st century state that will allow us to essentially ensure that we can continue to deliver high-quality statistics to the Australian community in the economic, social and environmental areas.

It is not just a technology refresh, if you like; it is also re-engineering our actual business processes. It is a combination of re-engineering our business processes with enabling systems tools to support that that will enable us to transform in that area. As Mr Kalisch indicated, it is more than just an infrastructure investment; it is also a set of cultural change strategies, engagement strategies, that will help transform the ABS over the coming years.

CHAIR: Mr Sutton, it is never about me and it is never about you. How is this going to affect the people that actually use the ABS and the people that respond to surveys? How is their life going to change?

Mr Sutton : I think their life will change quite considerably, in terms of the people who provide us with information that makes it possible for users to make informed decisions around social, economic and other policy. Why is that the case? It is the case because we will be able to offer more convenient ways of our providers providing us with the information that they currently do under the current systems. Obviously we will go to more of an electronic capture of information, and that will mean that household surveys will shift more towards providing e-forms that our respondents can use.

We currently have moved in that direction with respect to our business surveys, and we will do more in that area to take more red tape out of business. But we will also make some significant efforts in taking red tape out of households when they have to respond to surveys. That, as I mentioned, will be done in a number of ways. One is to provide e-forms which are more convenient, and another is to use existing administrative data more effectively than we currently do. Again, part of this investment is to enable us to leverage administrative data across both federal and state governments. There is a lot of very valuable information and administrative data that we will be able to better leverage to do that, and therefore we can reuse a lot of that data without having to go back out to the providers of that information.

I should also mention that this is also great news for people using ABS data, in that they will get better access to our microdata through this infrastructure investment. There will also be the opportunity for whole-of-government leveraging of our new data acquisition facilities that we will develop over the next few years. So there are many benefits for both our providers and our users.

CHAIR: No worries; that is good. A big transition, a massive transition—how are you going to manage that?

Mr Sutton : We are managing that through putting in place good program management structures and leveraging expertise from outside the ABS to support us in that transformation process. We are getting support from industry around program management, process re-engineering and things like evaluation and program assurance to actually support us through this process, as well as having built into the business case funding to transition the business from the old world to the new world. It is often a mistake in change programs not to have sufficiently allocated resources to the actual implementation of those changes. We have certainly done that as part of our business case. We have got sufficient funds to help basically transition our existing systems to the new ones by making sure that we resource that appropriately.

CHAIR: Good as gold. I have some questions on the census, but I do not want to move on if there is anything else on this one. This is on ICT.

Senator KETTER: Mr Kalisch, congratulations on your funding achievement there. Without trying to cast any shadows over it, I note that you earlier—

CHAIR: You are not going to knock it, surely?

Senator KETTER: No, I am not, but I noted that there was an article earlier in the year where you talked about requiring an amount something like equivalent to the annual budget of $312 million, and you were talking about ideally the project taking a period of four years to update the ICT. How does this allocation compare to your wish list?

Mr Kalisch : On my wish lists, I think that, if it was a media article, it was either with David Uren or with Peter Martin. I did use a figure of 'at least several hundred million'. I do not think it was quite as grandiose as 312, and I suspect that the Department of Finance would not have accepted that figure from us, as well.

CHAIR: 250 is not bad.

Mr Kalisch : 250 is pretty good. Given that some further time has been able to be spent on looking at the business case and assessing it, we have also suggested to government that it would be prudent if we did it over five years rather than the previous approach of four years. It just gives us a bit more time and concentrated effort to make the initial planning right. I think that, particularly in this initial year or two, we just have to make some smart choices as to where we invest the early money and early attention to make sure that the entire program over the five years does deliver.

Senator Fifield: Chair, it might just be helpful to put the government's budget decision in some context. The former Australian Statistician, Brian Pink, said of the previous government in his 2012-13 annual report:

… I remain concerned about the wide range of ageing and fragile business processes and supporting infrastructure used by the ABS, our difficult capital position, which is barely adequate to 'keep the lights on', and the impact these are having on our costs and on our staff.

What the government has done in this budget is to fundamentally address a concern that successive Australian Statisticians have had, which is in contrast—without wanting to be partisan, but it is just a statement of fact, Chair—to the previous government, who let the situation drift.

CHAIR: Thank you, Minister.

Senator KETTER: Mr Kalisch, I am particularly interested in the labour force statistics. We have spoken about that on a previous occasion. I am just interested in whether or not the extra funding for the ABS is going to enable you to put some work towards improving this important metric.

Mr Kalisch : Perhaps I will just also put some broader context around it so that you can understand, I suppose, what we can and cannot do with the funding. The funding essentially will enable us to transform our systems and our processes. It will not enable us to do as much change to our statistical work program as probably we would like to do. The funding will be largely dedicated towards improving and enhancing our systems and processes just to make sure that we cover off some of our key risks and that we are able to disseminate the information in more, I suppose, appropriate and contemporary ways. However, there is at least one change to our labour force survey arrangements that I will get Mr Peter Harper to talk about.

Mr Harper : Yes, we are looking at the way in which we conduct the supplementary survey program. That has been a problem in the past in terms of making changes to that program and the impact that it has had on the statistics. Under the transformation program, we are looking at conducting that program over a rolling 12-month period rather than having a supplementary survey each month dedicated to a particular target, and that would smooth out the volatility associated with the supplementary survey program.

Senator KETTER: Can you just elaborate a bit further as to what that means? Will that involve more surveying or less?

Mr Harper : It will involve the same amount of surveying but undertaken in a different way, if that makes sense.

Senator KETTER: In what way will it be different?

Mr Harper : At the moment, if it is a particular month, we undertake a particular supplementary survey, and the next month we might undertake another supplementary survey. Under the method that we are looking at—and we are still looking at it; we have not made a final decision—we would be asking one-twelfth of the population each month to complete a particular supplementary survey topic, and we would aggregate the results over a 12-month period.

Mr Kalisch : There was a proposition that we put to government that would have seen potentially an expanded labour force sample, but within the funding allocation that we have received we cannot progress with that at this stage.

Senator KETTER: Given that this metric is important and a lot of people rely on it, do you consider that the level of additional resourcing is appropriate to assist you to improve this area?

Mr Kalisch : Overall, we are very happy with the contribution that government has made to our statistical transformation, and we are looking to deliver best value from that.

Senator KETTER: How does the reliability of our unemployment statistics compare with other statistical agencies in other countries?

Mr Kalisch : As part of some recent work following up from the McCarthy review last year, we have undertaken some work to look at the volatility of our Labour Force Survey series over the last 30-odd years, so since the monthly survey came in. The initial results suggest that there is no more and no less volatility now than there has been in the past. We have also been consulting with Statistics Canada about a method that they used to assess this very issue in the Canadian context. We used that method as well as some other internal methods just to cross-check those findings, and they still bear out.

Senator KETTER: That concludes my questions on the ICT and the labour force. I have one more question. There has been some discussion about whether or not the Australian Institute of Health and Welfare was going to be merged into the ABS. Could you confirm that that merger is now off the table.

Mr Kalisch : We understand that government took a decision not to progress that merger, but I would probably say one thing. The bureau has a very strong relationship with the Australian Institute of Health and Welfare. We have had a number of collaborations in the past. We continue to have some collaborations. If anything, I think that potentially, with our focus on expanded partnerships and expanded use of data, we probably envisage that there will be a greater scope for more collaborations and partnerships with bodies such as the institute in the future.

Senator KETTER: Thank you.

CHAIR: The next census is next year. Are you all on track?

Mr Kalisch : Beautifully.

CHAIR: When is it?

Mr Kalisch : It is planned for August at this stage, and I do not envisage that there will be any difficulty in meeting that time frame.

CHAIR: When did you plan that? When did you start planning for the next census?

Mr Kalisch : I think the planning probably started in 2011, just after—

Mr Harper : No, actually it was before 2011, probably about 2009.

CHAIR: So you actually plan a cycle ahead. Are you planning to have an online version of the census?

Mr Sutton : Yes. You might recall that in the last census, in 2011, we had a 33 per cent take-up rate. This will be the first fully digital census, and we are aiming for a 65 per cent take-up rate in the 2016 census. We ran a test last year of 100,000 households which has given us confidence that we can achieve that target.

CHAIR: That is a big take-up. Is it likely that it could be exceeded? Did you expect 33 per cent last time to take it, or did that exceed it? I would have thought that was a low expectation, given what is going on in the digital divide.

Mr Sutton : I guess it might sound like it is not a particularly high target, but there are still large parts of the community that do not have access or do not want to use the digital channel. It might superficially appear that that is not a particularly high target, but I have to say that, in terms of international comparisons, which is what we benchmark against as well, if we achieve the 65 per cent in the 2016 census, it is fair to say that that will be probably one of the highest take-up rates in the world of any census.

CHAIR: Good. You have done your benchmarking. When would you expect the August 2016 data to be available?

Mr Sutton : The first tranche of data, I understand, would be available in December 2016, from memory. I am happy to be corrected if it is—

CHAIR: That is all right. It is out of interest.

Mr Kalisch : I suppose we would certainly hope that, with the higher take-up on the digital side, it will enable us to process the information more quickly.

CHAIR: That was my point. So you will be able to get it through. That will be vastly more efficient than previous times?

Mr Sutton : I am just being corrected. I do apologise. Our first tranche comes out in June 2017.

CHAIR: That is about the normal time that you would expect to see it.

Mr Kalisch : We are expecting to spend about $100 million less using the new approach than we did with the past one. It is a significant saving to the taxpayer.

CHAIR: That is very good. I know we had a discussion about how many people got employed in this whole process and the savings will flow on.

Senator DASTYARI: I have one question that may have been covered while I was just outside.

CHAIR: It probably was.

Senator DASTYARI: I just want to check that it was. The proposal to not do a full census—that is probably the wrong language—to use a sample and expand from a sample. That is still a proposal to government? Or has a decision been made?

Mr Kalisch : A decision has been made that we will proceed with a full 2016 census.

CHAIR: I just want to go to the bucks a little bit. Does the ABS receive any revenue from the statistics it produces?

Mr Kalisch : Yes.

CHAIR: It seems to be becoming a pretty entrepreneurial unit now. Do you have any plans to increase your exposure to revenue opportunities?

Mr Kalisch : There are significant opportunities for the ABS to accrue additional revenue from undertaking more surveys or from some other potential partnerships and collaborations that would extend the use of our data to particularly high-profile or very complex users, as well as give us the opportunity to provide some statistical consultancy services. There are a number of avenues that are very consistent and aligned with our mission and functions as stated in the legislation but where we could expand the business—and also better utilise the expertise of ABS staff.

CHAIR: Are there any handbrakes on you? Is there anything stopping you from becoming quite a useful provider of information? With the move to user pays you can garner a lot more revenue than you have been able to in the past and provide industry with a great benefit as well.

Mr Kalisch : We certainly need to be careful about the work we take on. We would not want to do anything that would jeopardise the reputation of the bureau, particularly with the community and our key stakeholders. ON the issue of potential brakes, one thing we are currently investigating is the scope of our legislation—how much it enables us to or restricts us from doing things. The government has given us the opportunity to come back and explore future legislative change if we believe that there significant constraints on our work program. We suspect that there are a number of changes to our legislation that would enable us to be more productive to the community.

CHAIR: I will finish up on an issue of governance since you have been there. Over the years, we have seen some issues about accuracy of some of the series and perhaps there was some insider information heading out. What have you done since you have been there? I know that you have only been there a short time. If you said that you are on a preliminary path, that would be fine, but is there anything going on in this space?

Mr Kalisch : There is actually quite a lot going on in that governance space. We are revisiting our corporate plan and the objectives of the bureau just to make sure everyone is in alignment with the direction that we are taking. We are looking at streamlining some of the decision-making processes, being clearer about the accountabilities—and I think this goes to some of those aspects. We had a discussion amongst the executive group even today about a statistical risk agenda and some of the measures that we have in place and need to have in place, particularly given the heightened risk profile that we will be moving into with this transformation agenda.

At the end of the day, some of those aspects cannot be fully mitigated in terms of perhaps rogue staff doing things but, even in that area, the bureau has done a lot in terms of engaging with our staff around the expectations and around the consequences, if people take rogue actions. As I mentioned, on the governance side we are also looking at our legislation and how that can enable us to do our work effectively and some of the constraints that might be there.

CHAIR: Terrific, thank you very much. I do not have any further questions.

Senator CANAVAN: I think I only have one. Can I ask about the unemployment series. Has that already come up? I will look at the Hansard. Thank you, Chair.

CHAIR: Thank you all very much for coming and quickly leg it out of the building.

Proceedings suspended from 17:55 to 18:05