the 1980s scheme

This page considers the 1980s Australia Card scheme.

It covers

• introduction - an overview of the Australia Card scheme
• background - why it arose
• developing the Australia Card - the interaction of parliament, officials, industry and the community
• the shape of the scheme - key features of the Card, databases and information handling

     introduction

The Australia Card scheme of the mid-1980s might more appropriately have been characterised as the Australia Number scheme.

It embodied a national identification number for each Australian. That number - a unique identifier - was to provide the basis for national health insurance, taxation, income support and other transactions between government agencies, individuals and service providers such as hospitals.

The number was to appear on a plastic card issued to each adult and child, replacing the medical services and other cards highlighted on the preceding page of this profile. Proponents suggested that inclusion of a photograph and other features would support use within the private sector, in particular replacing the drivers licence as the standard form of personal identification within Australia.

The scheme attracted increasing criticism on grounds that it -

• was inconsistent with the OECD data protection principles
• was unlikely to significantly reduce identity theft, service recipient fraud or other abuses
• was technically and administratively over-ambitious, with for example a flawed reliance on information of uncertain quality and transaction processing by a single database.

Opposition in the Senate, exacerbated by drafting flaws, led the Government to withdraw the Australia Card legislation prior to implementation of the scheme.

In the following year the federal Privacy Act was passed, articulating national privacy principles and providing broad regulation of information handling by most federal government agencies. At the same time some of those agencies moved forward with a surrogate national identifier, the Tax File Number (TFN). Increasing use of the TFN in a range of transactions was complemented by Australian Business Number as part of the Goods & Services Tax (GST), a universal value added tax marketed with many of the same claims made during debate about the Card.

     background

Emergence of the Australia Card was not an Australian aberration but instead reflected administrative, social and technological developments in most advanced economies.

A bipartisan commitment to taming inflation and to fiscal rectitude (manifested through large-scale privatisation and reduced employment in a public sector often characterised as innately inefficient) complemented -

• rhetoric about winding back 'unaffordable' income support programs (pensions, unemployment benefits, health services)
• anxieties about welfare fraud, large-scale tax evasion and offences such as money laundering
• disagreement about the cost (in some instances the underlying legitimacy) of government.

The substantive basis of much of the rhetoric and anxiety is uncertain. Egregious examples aside, the seriousness and prevalence of welfare fraud during the early 1980s does not appear to have been greater than during the preceding decade; improved resourcing of existing enforcement mechanisms might indeed have substantially reduced offences.

However, claims of widespread abuses and a systemic 'crisis' in payments by/to government gained acceptance in the mass media, with recurrent witchhunts against 'dole bludgers', 'double-dipping pensioners', overbilling by doctors (particularly by high-profile 'medical entrepreneurs') appear to have gained general acceptance.

That was reinforced by publicity about personal and corporate tax avoidance, avoision and evasion - with some voters being surprised by news that some of Australia's richest individuals pay little or no income tax.

One response to those concerns was movement towards establishment of a universal value added tax (VAT), applied to all financial transactions. The VAT was proposed at a national tax summit in 1985 under ALP auspices, stalled amid arguments that it was regressive or would not recoup 'missing' revenue from the rich, and was finally introduced as the Goods & Services Tax (GST) in 2000.

Another response was movement towards establishment of a national identity card - wrapped in the flag as 'the Australia Card' - that would

• facilitate streamlining of service delivery, particularly through replacement of counter and back office staff in government agencies
• enable more effective identification of and action against abuses (eg through comprehensive data matching)
• leverage existing government investment in data processing and the expertise of key agencies such as the Health Insurance Commission (HIC) and Australian Taxation Office (ATO)
• implicitly provide a standard form of identification for all adults and thereby reduce identity theft beyond transactions with the public sector.

It reflected enthusiasm within governments - indeed within most bureaucracies - for ICT as a tool that would enable organisations to cut costs, improve quality, enhance accountability and consistency, and improve the timeliness of service delivery.

It also reflected the mindset of major solution vendors and major government clients - evident since pioneering e-government projects in the late 1960s - with a single master register being used by a range of agencies and accessed by their peers.

     developing the Australia Card

Much of contemporary and subsequent writing about development of the Card has an almost conspiracist tone, with suggestions that federal agencies were in agreement, "acted in stealth" and eagerly embraced an opportunity to "achieve an objective they had had in mind for some time" in the face of community indifference and misleading or merely seducing cynical politicians.

Contrary to some triumphalist accounts, development appears to have been more complex.

That is evident in disagreement within the Government and within the bureaucracy, with few signs of a coherent master plan consistently supported by all major actors. There were corresponding disagreements within the Opposition, apparent in the mix of opportunism and principle at the time and subsequent action in implementing the GST. Overall, government may be seen as responding to perceived pressures from the community rather than independently driving development.

What was the balance between 'push' and 'pull'? We will not have a full sense of the relationship between Ministers, their advisors, policymakers within the various government agencies and technical experts until records are available under the Archives Act and more memoirs have appeared.

Identification of an administrative framework for the Card was initially undertaken, as with similar projects, by an interdepartmental working group that included representatives from the ATO, HIC, Finance Department, Attorney-General's Department and other key federal agencies.

Initial emphasis on income support services (and wariness about the failure of some large-scale greenfields IT projects over the past decade) was reflected in expectations that the HIC - responsible for maintenance of the existing national health insurance database - would maintain a central database with 'lifedata' (including a new national BDM register) and financial transaction information.

The database would be accessed by a range of agencies and interact with their specialist systems. It was envisaged that the Card number would be used as an identifier in many transactions, including claims for and receipt of age and disability pensions, taxation claims, billing by medical service providers, payment of some federal charges and receipt of education allowances.

People would not be required to carry the card at all times or to provide the number in response to any request, although provision of the number would be a prerequisite for accessing some services.

A model for distribution of individual cards was provided by initial rollout of the Medibank card; proponents of the scheme noted that distribution was a welcome opportunity to "clean up" numerous registers.

Agency investment in new hardware, software and process reengineering - much support within particular agencies was associated with claims that introduction of the Card would force an overdue review and enhancement of the agency's practices - was expected to be recouped through efficiencies over the following decade.

Estimates of spending varied, from upwards of $820 million over seven years. Crucially there was disagreement between and within agencies about costs, risks, savings and responsibilities. That disagreement increasingly moved out of offices into the public arena.

Implementation of the scheme involved changes to a range of federal legislation and thus involved a new enactment. Announcement of plans for the Card and introduction of draft legislation were initially welcomed, with strong editorial support, endorsements by media commentators and some policy experts (eg health service specialists), positive comment in fora such as talkback radio and strong support (typically around 65% in favour during early 1987) in opinion polls.

That support is unsurprising, given -

• perceptions that the scheme would reduce - indeed stop - "cheating on tax, child support, unemployment benefit and other welfare payments"
• claims that the Card would cut the overall cost of government, minimise errors and reduce time spent by citizens waiting in queues or dealing with paperwork
• low awareness in some parts of the community about privacy issues and the preparedness of some people to commoditise their privacy (apparent in dealings with the private sector today) in response to claimed financial benefits or heightened public safety

     the shape of the scheme

The Australia Card scheme centred on five major components -

• a national register covering Australia's population
• the associated Card
• a new national register of births, deaths and marriages
• ongoing electronic exchange by government agencies of information through what proponents characterised as a 'network'
• a national data protection agency

The national register, to be maintained by the HIC, was to encompass all Australians (including children) and non-Australians who had sought/received particular government services.

Information on that database was to include -

• the unique number identifying each data subject
• the person's name at birth (or on arrival in Australia)
• current name (eg reflecting changes through marriage or by deed poll)
• aliases
• date of birth (with cross reference to the state/territory register of births, deaths & marriages and to the new BDM register)
• date of death (with a cross reference to BDM registers), enabling verification of identity and denial of services in instances of identity fraud
• gender, including notation for gender reassignment
• citizenship status
• current and recent residential and postal addresses
• digitised photograph
• digitised signature

The card was to feature a unique identification number, the bearer's name/s, date of birth, photograph and signature in a non-machine-readable format. It was envisaged that the card would feature other information in an electronic format, initially as a magnetic stripe.

The new national births, deaths & marriages register - to be maintained by the HIC - would apparently draw on the existing state/territory BDM registers. It would be 'born digital' (eg not be paper or microfilm based) and provide verification information that would be accessed by the Australian Taxation Office, migration and passport agencies and other bodies.

The two registers would have an ongoing linkage through the network to databases maintained by other federal agencies, with provision for linkage to state/territory agencies (eg those issuing driver’s licences).

Agencies using the network would be required to notify each other when information on their systems changes, in principle allowing ongoing updating and identification of discrepancies such as an individual improperly receiving/seeking benefits from two agencies. Use of the national register as a hub reflected a move away from 1970s visions of a 'master system' with centralised data processing, consistent with technological realities and competition between the various agencies.

Those agencies would maintain discrete databases and information processing systems. For them salient advantages of the scheme would be use of a single identifier

• across databases within organisations
• for information exchanged with or accessed from other agencies
• for information provided by state government and private sector bodies

thereby reducing data capture costs and facilitating official data matching/analysis activity.

The Data Protection Agency (DPA), a federal statutory body, was to oversight administration of the scheme. Critics expressed concern about formal constraints on its powers and - as seriously - the potential impact of under-resourcing, since a watchdog must have both the will and means to bite. Those deficiencies were unfortunately embodied in the subsequent Office of the Federal Privacy Commissioner.

It was envisaged that the legislation would be complemented by a broader Privacy Act, covering the information practices of nongovernment entities such as banks, retailers and direct marketers. As discussed in the following page of this profile the Government was perceived as concentrating on development of the Australia Card scheme at the expense of broader privacy protection. That concentration was arguably incorrect but understandable, given subsequent private sector resistance to effective privacy law and practice.

Embedding the Australia Card within a comprehensive national privacy regime was important because many uses of the number involved interaction of the card bearer, government agencies and commercial entities.

Individuals would be required to 'produce' the card (including provide a government agency or business with their number) for a range of reasons, including -

• opening accounts and subsequently engaging in transactions with financial institutions, including receiving/sending foreign remittances
• engaging in investment transactions and financial futures trading
• receipt of income, including money from property rental, primary production (agriculture, fisheries, forestry) and some trusts
• real estate transactions
• safe deposit box transactions
• employment
• taxation and prescribed payments
• seeking and receipt of health insurance benefits
• government unemployment, disability, aged pension and other social security benefits
• public hospital services

Organisations were obliged to demand the number for those activities, with sanctions applying if the card/number was not produced. Although it was expected that most activities would involve a one-off provision of the number (eg when setting up an account) there was scope for government agencies and their private sector partners to require the individual to produce the card on request for the purpose of verification.

Graham Greenleaf pithily commented that

the legislation did not make it possession/use legally compulsory: it simply makes it impossible for anyone to exist in Australian society without it, because they will be unable to carry out normal activities such as the receipt of their pay taxed at the normal rate, operation of bank accounts or the receipt of social security or health insurance benefits

Private sector entities were required to report data to the relevant government agency at the time of transaction or thereafter, with an expectation that the number would feature in commercial databases and that information would be maintained (and therefore accessible on request by government agencies) for periods specified in banking, taxation and other legislation.

The legislation as presented to the federal parliament did not provide for effective restrictions on the use of data within nongovernment entities. In practice the use of a national identifier would have greatly facilitated matching of data collected/held by different commercial entities within Australia and overseas.

   next page (opposition and the TFN)