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Service delivery reform: designing a system that works for you: address to National Press Club, Canberra [and] Questions and answers.



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THE HON CHRIS BOWEN MP

MINISTER FOR HUMAN SERVICES

MINISTER FOR FINANCIAL SERVICES,

SUPERANNUATION AND CORPORATE LAW

ADDRESS TO NATIONAL PRESS CLUB

“SERVICE DELIVERY REFORM:

DESIGNING A SYSTEM THAT WORKS FOR YOU”

*EMBARGOED UNTIL DELIVERY*

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CANBERRA

16 DECEMBER 2009

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Introduction

Ladies and gentlemen,

Six months ago, the Prime Minister invited me to take on the

Human Services portfolio alongside the Financial Services,

Superannuation and Corporate Law portfolios.

Human Services is not a portfolio you will often read about in

the nation’s newspapers. If I’m on the nightly news in my

capacity as Human Services Minister, it normally means that

something has gone wrong.

As Australia grapples with global issues, such as climate change

and the GFC, it is particularly understandable that drier issues,

like better ways of delivering services, are not “front of mind”

for many people.

This does not mean that the Human Services portfolio is

unimportant. Far from it.

Human Services, which incorporates Centrelink, Medicare, the

Child Support Agency, CRS Australia and Australian Hearing, is

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the everyday manifestation of the Australian belief in a social

safety net.

For millions of Australians, service delivery through these

agencies is vitally important, at least for a period - often a

difficult period - of their lives.

For many Australians, it is important that our Commonwealth

and state service delivery and welfare agencies intensively

assist them through difficult periods as co-operatively and

seamlessly as they can.

Others, living busy lives and short of time, need to interact with

service delivery agencies as quickly and efficiently as possible.

The circumstances facing these individuals are diverse: working

families, farmers, seniors, students, sole parents, people facing

unemployment and homelessness, people facing the death of a

loved one, or a disability, illness or injury or caring for someone

who is.

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The agencies within the Human Services portfolio - their staff,

their shopfronts and their websites - are the face of

Government for many Australians. For many Australians, these

agencies are “the Government”.

Each year, the Australian Government delivers more than

$100 billion in payments though the Human Services Portfolio.

The complexity and range of services delivered by the

Government today is immense, with the Human Services

Portfolio responsible for delivering over 200 different services.

Every day, there are 361,000 face-to-face contacts with Human

Services agencies and 222,000 phone calls to 31 call centres

across the country. The agencies send out 400,000 letters

each working day - 100 million letters every year. And we

have 70,000 online transactions each day.

This is an enormous machine with thousands of moving parts.

It needs to work efficiently and effectively - both for the

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taxpayers who support it and for those Australians who need to

deal with it.

Each one of those millions of contacts, each one of those

transactions is an interaction with a person who relies on us to

get it right.

Service delivery

In 2004, the Howard Government created the Department of

Human Services to place a greater emphasis on service

delivery. Separating service delivery agencies from policy

agencies was, to give the previous Government its due, a

positive step.

I hope that the Coalition’s recent appointment of the same

person as Shadow Minister for Families and Shadow Minister

for Human Services does not represent in any way an intention

to water down the focus on the service delivery aspects of

social policy.

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Having a Minister, a Secretary, a Department focussed on

service delivery means that, inevitably, there is greater

concentration on finding the best ways to deliver our services,

keeping the machine running as smoothly and efficiently as

possible.

It is a portfolio that deals with almost the entire population -

so keeping pace with modern Australian life is crucial.

For that reason, the time has come to reassess whether we -

the Government and the nation - are getting enough out of the

Department of Human Services.

The time has come to redesign our service delivery to maximise

convenience for Australians who rely on us for services.

And, in the process, we need to take advantage of the obvious

synergies available across our service delivery agencies.

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Successes

We need to learn from our successes as well as our

shortcomings. To give you one example: in the past 12

months, the Human Services Portfolio responded to 11 major

emergency situations, including the Victorian bushfires and the

South Queensland floods.

In all 11 cases, the various agencies came together to provide

urgent, efficient and personalised support to thousands of

Australians, often in circumstances of distress, all the while

continuing to operate in a business-as-usual manner for the

rest of the Australian community.

The experiences of cross-agency co-ordination in these

emergency situations should not be lauded only to be

forgotten. There are lessons to be learnt here.

We need to build on these experiences to deliver services

better in an everyday, non-emergency environment.

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Increasing demand

As I said earlier, it is time to assess what we can do better.

Governments should always be assessing what can be

improved.

This is all the more imperative with the ageing of the

population.

The 2007 Intergenerational Report projects that, by 2047, the

proportion of Australians who are of a working age will decline

from 67.4 per cent of the total population to 59.7 per cent.

The increasing proportion of people reaching retirement age,

combined with the reduced proportion of new labour force

entrants, will present a major challenge for service delivery.

An ageing population will result in an increase in carer and

disability related payments.

Retirement-related services will be more complex as the

proportion of pensioners who work beyond age pension age or

draw income from private savings continues to grow.

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All this underlines the importance of, and challenges associated

with, ensuring that Australians have access to services that are

delivered in accordance with world’s best practice.

Service delivery reform

Our current service delivery structure is not up to scratch to

meet these objectives.

Despite the co-ordinating role of the DHS, there is not enough

collaboration between our service delivery agencies.

Many Australians find the services offered by the various

agencies confusing. When their life circumstances change and

they need to access Government services, they often don’t

know where to go.

Better co-ordination of service delivery mechanisms will result

in better services for Australians and savings for Government,

some of which can be reinvested in better service delivery.

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Accordingly, today I’m announcing the start of a major reform

of the way we deliver services to Australians. This will be a

bigger reform than the creation of the Department of Human

Services itself.

Office co-location

The most visible aspect of the Government’s service delivery

reform plan will be a move to co-locate Human Services agency

offices to make it more convenient for Australians to deal with

government.

Let me give you an example of what we can achieve. In

Narooma, on the South Coast of NSW, we have a new, joint

Centrelink/Medicare office.

Both agencies now offer their full range of services in the one

location, a first for Australian Government service delivery.

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This permanent, purpose-built co-location of Centrelink and

Medicare is designed to make dealing with government a better

experience for customers.

The feedback from customers and staff about the improvement

in customer service as a result has been very positive.

For example, if a member of the public has experienced a

medical event which has affected their ability to work, or if they

have experienced a family bereavement, they can come into

the joint Medicare-Centrelink office and, in a private room, talk

to Medicare and Centrelink staff together about their

circumstances and what support is available.

In other words, they tell the Government their story once,

instead of going through the inconvenience, and sometimes

trauma, of repeating it on multiple occasions.

Another example of what is possible is at Batemans Bay, also

on the NSW South Coast.

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In January, we’ll be turning the sod on a new community hub,

a purpose-built building which will house all the Human

Services agencies - Centrelink, Medicare, Commonwealth

Rehabilitation Services, Australian Hearing and visiting Child

Support services.

We are in discussions with other government and non-

government agencies about locating there to make it a truly

one-stop shop.

I can announce today that, by the end of 2010, there will be at

least another 20 co-located offices around Australia and, by

2012, around 40 offices will house Medicare, Centrelink and

CSA under one roof.

If we were designing the system from scratch, this kind of idea

would probably seem obvious. But, as is so often the case,

these things have their own histories and their own realities -

so these sorts of reforms take enormous planning and will and

careful implementation.

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Rural and regional Australia

For rural and regional areas, where limited resources exist to

serve the sparse populations spread out over our vast

continent, combined service delivery is particularly important.

Traditionally, people have had to travel to larger towns to

access services. Others may have been reluctant to approach

the government for help or be unaware that assistance is

available.

The Government has specifically identified 29 priority

indigenous communities where government services and

facilities will be improved, something that will require

co-ordination between all levels of government.

Meanwhile, the Centrelink-led Mobile Office - or drought bus -

initiative has brought together a wide range of payments and

services offered through Centrelink and Medicare Australia

directly to remote Australians.

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Seniors, students, families, farmers and agriculture-dependent

small businesses have been able to talk with experienced rural

servicing specialists on these Mobile Offices. These staff live

and work in the communities they serve and understand the

local issues.

In its three years on the road, the Drought Bus program helped

more than 30,000 people - the majority of whom had never

previously approached agencies such as Centrelink for help.

The Mobile Office builds on this servicing model. It’s physically

much larger and offers many of the facilities you’d find in a

Centrelink office, such as waiting areas, private interview

rooms and information stands.

A priority of this reform agenda will be bringing services

directly to where people live - by finding the right mix of

mobile offices and visiting services that improve access for rural

and remote Australians.

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Enabling greater self-sufficiency

In addition to these examples of face-to-face support, there is,

of course, a range of other ways Australians interact with our

service delivery agencies.

To make dealing with government easier, Human Services

agencies will have a single phone number and a single website

by the end of 2010.

People will be able to call the one phone number to access any

service across the portfolio.

This number will effectively act as a triage service. When you

call it, we will take responsibility to connect you to the right

person, rather than leaving you to navigate your own way

through our bureaucracy.

If you do know the precise area you’re after, however, you will

still be able to call it directly.

We also know people want to be self-sufficient wherever

possible.

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Queuing to conduct a simple or routine transaction with a

government agency can be a very frustrating experience and

one we want to reduce as far as possible.

We are going to put greater control in the hands of individuals.

By providing a single online access point for a wide range of

government services, we will give Australians the means to

deal with government in their own time from their own homes.

Information that’s relevant to you should be in one place and

easy to find. You shouldn’t have to remember multiple

usernames and passwords for multiple websites.

The upgrade of online services is in response to an ever-

increasing demand for this option.

The Human Services portfolio already supports over 17 million

online transactions by customers each year and our intention is

that, by 2013, all forms across the portfolio will be digitised.

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Technology is revolutionising how services can be - and are -

delivered but, without broader changes, it can actually

exacerbate the confusion and information overload.

We are not forcing - and we will never force - people online.

Human contact is so essential in the work the Human Services

agencies do, and these reforms are, in many ways, designed to

free up resources for case management of those with more

complex needs.

The challenge for the Australian Government is to determine

how we can better serve individuals with vastly different needs.

Some people want to do everything online. Others don’t own a

computer.

Our job is to provide the most efficient and effective service for

all of them.

In short, this reform is about delivering services in ways that

suit individual Australians, not ways designed primarily to

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maximise the convenience to government agencies: service

delivery that is easy, high quality and works for you.

Structural change

In order to obtain the necessary seamlessness and

co-ordination, the Prime Minister has agreed to my proposal

that Medicare and Centrelink should become part of the

Department of Human Services.

In the process, we will bring together their IT, finance,

property management, procurement and human resources,

freeing up back office resources.

Importantly, the Medicare and Centrelink brands and business

lines, which many Australians have come to know and

understand, will remain intact and their roles will remain

distinct.

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Medicare and Centrelink will also continue to have their own

Chief Executives. The Chief Executives will also become

Associate Secretaries of DHS.

I would like to take this opportunity to acknowledge the

support and collaboration of the CEO of Medicare, Lynelle

Briggs, and the Acting CEO of Centrelink, Carolyn Hogg, in the

development of this service delivery reform.

I am also pleased to announce that Cabinet has agreed to my

nomination of Carolyn to become the CEO of Centrelink.

Having combined back office operations - instead of separate

administration for each agency - will mean Lynelle and Carolyn

have to spend less time managing their back offices, enabling

them to focus more of their energies on their key stakeholders

and delivering services to Australians.

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Protecting privacy and jobs

At this point, I would like to take a few moments to talk about

what this reform is not.

It is not a central database.

We will not house an individual’s personal, sensitive information

in one place, vesting all control with one body or one card.

This is not an Australia Card and we will not be merging agency

databases.

The community has genuine concerns about this, concerns that

I recognise and understand.

We are bringing IT platforms together, not information itself.

Apart from the limited data that is already shared between

agencies like Medicare and Centrelink, no more information will

be shared, unless the individual concerned asks us to share the

information for their convenience.

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Personal health information is of particular sensitivity for most

people, which is why we have excluded health information from

these reforms.

Further, we are working with the Privacy Commissioner from

the outset, putting in place a formal Memorandum of

Understanding between the Office of the Privacy Commissioner

and the Department of Human Services to cover these reforms.

I want privacy protections built into this transformation from

the very start rather than treated as an afterthought.

We also have a robust consultation process on this and other

parts of these reforms, to make sure the community can be

properly involved as we move forward.

That’s not to say we are closing our minds to the advantages

or benefits of the agencies’ closer integration for people who

deal with us regularly.

If, for example, you inform Medicare of a change of address,

we’ll ask if you would like us to let other parts of DHS know.

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If, however, you would prefer to fill your details in every time

you deal with a different part of DHS, rather than having fields

pre-populated, that will be your prerogative.

The point is - we will give full control to individuals about how

their sensitive information is shared across agencies for their

convenience.

So this isn’t about a consolidation of information.

Nor is it about staff cuts. Rather, it is about freeing up staff to

do more meaningful work for the direct benefit of Australians.

Instead of having two staff spending their time on identical

administrative tasks, one will do the job and the other will be

released to work on service delivery - the very reason these

agencies exist.

Any reduction in total staff numbers that arises out of these

reforms will occur primarily through natural attrition. I have

invited the CPSU, which represents many DHS employees, to

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form a joint working party with DHS to discuss implementation

of this reform program.

This reform will generate efficiencies and savings for

government. Some of these will be reinvested in better service

delivery.

So, although this reform is not about staff cuts, staff will notice

a change. You only have to listen to the passion of our staff at

Narooma, passion for the improved service provided, to know

that our staff will be passionate about the improved customer

service that will result.

Health Professionals

Of course, the agencies in my portfolio don’t deliver services in

isolation

Medicare’s success in supporting the delivery of universal

health care has in a large part been because it seeks to

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harness the strengths of private practices rather than seeking

to displace them.

Medicare has a vital role in providing health professionals with

support and certainty. This will not change, nor will it be

compromised in any way as the reform agenda plays out.

The Government and Medicare have already begun making it

easier for health professionals to conduct their business and to

access high quality information and support services.

For health professionals, we will continue to reduce red tape

through the Health Professionals Online Service. We will

continue to provide clarity and certainty around billing

regulations by providing high quality education, such as

Administrative Position Statements and eLearning.

We will continue to work closely with health industry

stakeholders on areas such as compliance, education and

product and service design.

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This reform is about cutting red tape and making processes

more efficient - for those who require a government service

and those who provide it.

This is the start of the process that will take several years to

fully bear fruit. But it has the potential to revolutionise the way

Australians access their government services.

International comparison

While Australia remains in the top 10 in the world in terms of

service delivery, we are not keeping up with the leaders

internationally.

The Advisory Group on Australian Public Sector recently found

a number of countries are ahead of Australia, despite some

great strides we have made in recent years.

The Prime Minister recently called on the Australian Public

Service as a whole to learn from examples of excellence

overseas and within its own agencies.

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The Netherlands, Denmark, and New Zealand have all adopted

innovative and integrated service delivery strategies. Canada.

in particular, has been outperforming governments around the

world with its one-stop point of access for federal programs

and services, and increased use of outreach services in remote

locations.

Australians deserve world’s best practice and I’m confident

these reforms will deliver it.

Future possibilities and vision

The reforms I’m announcing today relate only to my Human

Services portfolio. But, if we get them right, they offer the

potential for co-location and joint service delivery between my

portfolio and other federal government agencies.

I know that Minister Tanner is looking into service delivery

across the government, in particular through the Government

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2.0 Taskforce. We are expecting the Taskforce to report

shortly on how Australians can be more involved in the design,

delivery and prioritisation of the services that they use.

Imagine the possibilities in terms of time savings for Australians

who spend time dealing with various different Government

agencies in different locations.

In, say, 10 years’ time, what’s to say state governments will

not have chosen to co-locate their service delivery with the

Commonwealth both physically and through the internet?

Australians can only benefit from their governments focussing

on better service delivery.

This will be a long journey but today I am announcing the first,

vitally important step towards better, more efficient service

delivery. The dividend will be substantial.

Question and answer session

E&OE PROOF ONLY

SUBJECTS: Service delivery reform, fraud, data sharing, superannuation, Cooper Review, Henry Review, Basel Committee, information technology, Liberal Party.

JOURNALIST: You’re at pains to point out that these reforms aren’t about sharing information per se, but will these reforms and changes allow you, give you any extra ability to detect and investigate fraud across the agencies?

BOWEN: No, that’s not what these reforms are about. These reforms are about better service delivery. The Government has a range of mechanisms in place to deal with fraud and non-compliance, some of which we announced in the Mid-Year Economic Statement. But they are very separate. These reforms are all about service delivery and that’s why I stress that information won’t be shared. If it was about fraud and non-compliance, there would be a different answer to that. This is about better services for Australians.

JOURNALIST: Can I just test your assertion that it is all about service delivery. Going back to the Access Card, the original recommendation of the Smart Taskforce was to make it a voluntary rollout and the theory was that over five years, 99 per cent of the population would agree to have an Access Card. Now, you talk about there being a need for a one stop shop. A one stop shop needs this data to be controlled. What studies are you aware of or what is the expectation as to how many people will agree to have their information shared so that while there might not be one central database, there might be five.

BOWEN: Well, it’s hard to have five central databases, Andrew.

JOURNALIST: Well, five DHS agencies, all the same information.

BOWEN: Well, presumably when people tell different Human Services agencies their information of their own volition, you would hope that their information is the same. But I stress that we are providing people with the ability to make their own decisions. So if you change address or if you’ve lost a loved one, we will ask you if you want us to let other Human Services agencies know. If their answer is, ‘no, I’d like to do that myself’, that’ll be fine. So I stress there will be absolutely no compulsion. It will be completely voluntary and at the discretion of the individual. I don’t know what proportion of people will take this up and in effect, it’s completely up to them. If it’s a high proportion, that will show the convenience of doing such a thing. If it’s a low proportion, it shows that people would prefer to make those decisions themselves, so it would be completely up to them.

JOURNALIST: Minister, I thought I might try changing the subject to superannuation.

BOWEN: I thought you might.

JOURNALIST: First opportunity to get your views on the Cooper Report from earlier this week. So my first question is, do you see some merit in that idea of the different types of funds, including the concept of the universal fund? But my second question is about the overall adequacy of the super system now. You’ve said before, I think you’ve said that you thought it wasn’t adequate at the moment, the nine per cent contribution. Now, the Henry

Review has indicated that it thinks nine per cent is okay. When the final Henry Report comes out, do you accept that or do you move onto some other process to sort of resolve this debate about the overall level? Do you think that there’s any merit in a 12 per cent contribution for instance?

BOWEN: Well, there’s a fair bit in that question but I’ll do my best to tick them off as I go.

On Cooper, one thing I won’t be doing is providing a running commentary on the Cooper recommendations. Now, the Cooper committee, at my request, is making three iterations of its report. So it’s a modular report in three tranches. And what I won’t be doing is commenting as we go. I’ll be putting together a response and taking that through Government. The response will be based on the principles of simplicity, efficiency, equity and adequacy, although Cooper is not looking at adequacy. I welcomed the report of Jeremy Cooper, the Cooper inquiry, during the week. It does make a valuable contribution, particularly to the debate about efficiency and downward pressure on fees. And I’m on the record as saying I’d like to see fees lower in Australia, that the growth in the economy of scales in the superannuation industry hasn’t been reflected in a reduction of fees in my view, and anything which reduces fees is something that I’m very interested in pursuing. But I won’t be commenting on details. It’s out, I’ll be getting feedback from the superannuation industry over the coming weeks and months, and I’ll be putting together a response.

In relation to adequacy, my view expressed previously and it remains my view, is that the Henry committee has said that nine per cent is adequate. I think we need to have a national discussion, not so much about adequacy - let’s put the debate about adequacy aside - but is adequate enough or should we be aiming for something better than adequacy? Because there is a cost to be paid. If you move to higher retirement incomes, there’s a cost to be paid and we need to have a national discussion about that cost. I think it’s a discussion well worth having, given that superannuation is now 20 years old, many people are moving to retirement and increasing retirement incomes are something which should be very much on the national agenda.

JOURNALIST: On superannuation again, you said we need a national discussion. Will it include the difference between people getting nine per cent in the private sector and the 14 per cent the public servants get or more? And can I ask you personally whether you think

that’s fair?

BOWEN: Well, I think it does underline the point that those of us who work for the Government are on higher than nine and therefore we have better retirement incomes. And that underlines the point that I agree with you, that we need to have a national discussion

about it. I agree with that point and I think that point would be part of any national discussion, almost inevitably.

JOURNALIST: Just following up on reports today that the Basel Committee on Capital Adequacy, it’s now looking like being a much more drawn out process. I’m just wondering from Australia’s angle, where do you see that process being at? You know, could it be something that takes up to ten years to institute?

BOWEN: Well Rachel, I haven’t seen that report. I’ve been focused on today’s announcements and other news that’s been out this morning. All I’d say generally is that we are very much engaged in the Basel process. John Laker, the Chair of APRA, is very much

engaged in it. Obviously, the quicker it can be resolved, the better I think for the purpose and certainty of financial markets, not just here but around the world and we’d certainly be pushing for that to happen. But by the same token, you need to be sure that you’ll get the right result, not a rushed result, and there’s a balance to be struck there.

JOURNALIST: Minister, let me ask you a question about information technology involved in various things you’ve announced today. The various elements of your Department are already huge users of IT. This will make them much, much bigger. When Peter Gershon reviewed the Government’s use of information technology, he wasn’t entirely complimentary about the way it was used or bought. Have you had any detailed studies into that aspect of the changes so far?

BOWEN: Well, what I’ve announced today is entirely consistent with Sir Peter Gershon’s recommendations. He’s recommended much more of a centralised focus in terms of procurement and much more of a coordinated process in terms of driving efficiencies. I can think of few better ways of doing that than bringing together the information technology platforms across my Department as a very important contribution to that process. So I think the Gershon Report was a very valuable contributor and we’re implementing it in spirit and letter.

JOURNALIST: Minister, if I can just ask you a question about another speech that was delivered today by Tony Abbott, the Leader of the Opposition., who in Sydney this morning delivered a pretty feisty speech with a key message to Kevin Rudd: ‘bring it on, we are not frightened of taking the Government on in an early election, perhaps, on climate change. Can I ask you as a Minister who does have the ear of the Prime Minister, would you welcome the chance to fight an election, perhaps early next year, on the core issue of climate change, CPRS, or do you think the Government would be vulnerable to what would be a pretty feisty scare campaign on a new tax?

BOWEN: Well, in answer to your question Steve, I’ll say a few things. Firstly, matters of election timing are entirely a matter for the Prime Minister and while he does, from time to time, seek the counsel of his Ministers, I’m sure that’s a decision that he will be making himself.

On the general matter of Mr Abbott. I’d say this: we never should and never will take any Leader of the Opposition lightly. Every Leader of the Opposition needs to be treated with respect. They haven’t become Leader of the Opposition without showing considerable political skills to get to that position.

So no Government worth its salt can get arrogant or complacent and should dismiss a Leader of the Opposition out of hand.

I think what the current Leader of the Opposition is doing is having a conversation with his base. They are having a conversation with core Liberal Party constituents. And what we are doing is governing and talking to all Australians, our base, swinging voters, and even others.

And I’d say this: last year I made a speech where I pointed out that there’s been a 60-year battle between conservatives and liberals in the Liberal Party.

And 12 months ago I said, ‘the battle is over, conservatives have won’ and that thinking, small ‘l’ liberals should consider joining and participating in the Labor Party. Twelve months later, the conservatives have not only won, they’ve scattered salt on the wounds of the liberals and there is now very little room for small ‘l’ social liberals in the Liberal Party. The Labor Party is now their natural home, and we’ll be pointing that out as well.

JOURNALIST: Looking around the room here, I see a lot of faces from the IT sector and I’d like to ask you to perhaps expand a little on precisely how you see this integration process occurring. What’s involved in it? I’m assuming with the various agencies you’ve got, it’s obvious you’ve got a range of contracts to be rationalised somehow and crunched together, but also can you tell us a bit more about the savings? I mean, the reality is that the history of these things are they always get projected savings but they tend to be elusive. An image springs to mind, I remember a predecessor of yours from the former Government said they’ll never be another Edge Project. And for our viewers I’d say that was a Centrelink project which I think cost $65 million before it was scrapped. Are you confident we’re not going to face a problem like that?

BOWEN: Yes. You’re right to identify that it is a very big task bringing all back office together, particularly IT, and you’re right to identify that it will take some time, that there are contracts in place which need to be reworked and recalibrated, etcetera. It’ll be a task we do in collaboration with the private sector.

A couple of months ago I released a paper on service delivery interaction with the private sector and there’s been in the order of 50 submissions from the private sector about how we can work better together to deliver services for Australians, and I see those two processes coming together in terms of the joining up of our IT and delivering a better IT collaboration with the private sector. And Finn Pratt, the Secretary of my Department, has this very high on his agenda in terms of implementing the reforms we’ve announced today and working with the various private sector providers to ensure we do it as seamlessly as possible.

In terms of savings, as I said in my remarks, there are savings for Government in this. The savings will be substantial. To give you some flavour, in the Mid-Year Economic Statement we announced some reforms in relation to digitisation which have savings of $150 million over three years. These will be of a greater order. We’re talking several hundred million dollars a year, in my view, in the out years, not the forward estimates, because there will be upfront investment to get to those savings. But that’s something that we’ll work through in terms of the Budget process and those will all be reflected in future Budget papers. But I’m confident that they will be delivered. They come not only from IT, but from increased efficiencies in the whole back office operation.

JOURNALIST: I was just wondering - in the past 12 months, obviously a lot of people’s circumstances have changed with the global financial crisis and your businesses have been required to be quite nimble. I know, for example, there is more Centrelink staff sent into North Queensland with the unemployment rate one of the highest in the nation. Is that part of why you introduced reforms like this, because people’s circumstances have rapidly changed? And are you confident that this will make the businesses that you have a little bit more nimble to adjust to these sorts of things?

BOWEN: As you correctly identify, I think our agencies already do a pretty good job at that, not only in terms of hot spots of unemployment. And I was in Townsville with the Cabinet

last week, where we held a Jobs Forum, where we had thousands of people through, and Cairns as well where there’s high unemployment, so we are nimble in responding to that. Obviously I’d always like it to be more so, and the Mobile Service Offices will play a role in

that, so it will be part of it but I have to say it’s not the driving force. I think it’s something we already do reasonably well, but of course improved collaboration across the agencies can only improve that degree of flexibility.

JOURNALIST: Super this time. Look, do you agree with the contention that’s expressed by people like Warwick McKibbin and Bernie Fraser that increasing the super guarantee helps shift some of the pressures off inflation, especially in states where wages are exploding, like WA?

BOWEN: Well, there’s no question that if you institute pay rises through payments into superannuation, that’s less inflationary than other mechanisms of doing so. There’s no question about that, I think. Whether that is the right thing to do is a completely different matter and something that should be involved in that national discussion I referred to.

JOURNALIST: Alright, well on that note, one thing I’m not clear about is how the national discussion will go, because you’ve got the Cooper Review, which is not about adequacy and won’t be about the guarantee, then you’ve got the Henry Review, where you’ve pretty much got the final report about to drop. I don’t see where the process is for a national debate, other than lots of people lobbying you personally. But shouldn’t there be a structure about that?

Shouldn’t there be a process to get some formal submissions and actually scope it out?

BOWEN: Well, you’re right in identifying the Henry Review as being imminent and having a discussion about, obviously, tax across the board but also tax in superannuation. The Treasurer and I have both had quite a bit to say about equity in tax on superannuation, and both the Treasurer and I have pointed out that equity in the taxation treatment of superannuation is frankly non-existent. Low income earners get no tax concession; high income earners get a very considerable tax concession for superannuation. Both the Treasurer and I have outlined that as an area we’re interested in looking at very closely.

And in terms of the Henry Review, I think the Treasurer has indicated that it will be received later this year and then made public in the first part of next year. And there’ll be a process around that, that we would be outlining our broad response, but there’d be a process of discussion and consultation around the Henry Review and I have no doubt, knowing now the superannuation industry very well, that the superannuation and others interested will not need my invitation to give me their views.

JOURNALIST: Look, just quickly then on another issue around super at the moment. That is whether there should be a move by the superannuation industry to invest more in infrastructure in Australia to help address the sort of investment gap in local infrastructure. Do you reckon there’s any reason to tell super funds where they should invest?

BOWEN: The short answer to that question is no. The superannuation system is designed to maximise the retirement incomes of Australians. That is its sole purpose and it should remain its sole purpose. It also has the by product of promoting Australia as a global financial centre, which is something that I could talk about for hours as well, but I won’t.

Superannuation funds already invest heavily in infrastructure, about 10 per cent of their investments are in infrastructure. Is it appropriate for Government to look at whether there are any obstacles to superannuation funds investing in infrastructure? Yes, I think it is, and we’ll be looking at that again, in conjunction with both the Henry and Cooper Reviews. If the superannuation funds point out to us the reason why they don’t invest more heavily in infrastructure, then that’s something we’d be very happy to look at. Mandating trustees to invest in any particular type of investment, whether it be infrastructure or any particular asset class or geographical spread, is not something that I would support. Trustees are entrusted with maximising the retirement incomes of their members. I’m not; they are. They are the

ones who should make those decisions.

JOURNALIST: Do you think the last two years might have made them think about the weight of their investment in equities?

BOWEN: Well, one of the interesting questions around infrastructure is the proportion of investment in infrastructure has increased through no decision of superannuation funds, as the proportion of investments in equities has fallen through the reduction in the value of those equities. Superannuation funds in Australia have taken a battering in terms of return but they are not unusual in that scenario. Around the world, pension funds, regardless of their asset spreads, have been battered and I’m glad to see superannuation funds in Australia returning to positive returns, which they are now doing.

JOURNALIST: Minister, you said that you’d like to have 20 co-located offices around the country by 2010 and 40 by 2012. Given the problems the Government’s had rolling out the GP Superclinics, 35 of those, are you confident that you’ll be able to meet those timelines? And I assume some of those will be in new buildings?

BOWEN: Well I wouldn’t have announced it unless I was confident. So I am confident. It won’t be easy, but I am confident we can do it. We’re going through a process now of identifying where they should be. Criteria would include where there are existing services or where services are lacking in a community. For example, if we have a Centrelink office in a particular town but no Medicare service that would be a good opportunity to expand services. Where leases are up, where one or another lease is up, and it’s a good opportunity to locate. The amount, the demand for services of each agency in that particular location.

It’s not an easy process. Narooma took both my predecessor Joe Ludwig and myself and various senior levels of the agencies a lot of effort to get one office up. I don’t underestimate the importance or the difficulty of doing this on a much bigger scale, but as I say, I’ve tested this very closely and I would not have made the announcement unless I’m confident that we can achieve it.

ENDS