Feds' smartcard costing unknown but consultancy fees top millions

Details surrounding costing for the federal government's access card initiative remain elusive, but last week's Senate Estimates hearings has revealed that consultancy fees will certainly top $2 million.

The business case for the Australian government's health and social services Access Card, built on smartcard technology, has been stalled by the refusal of Human Services Minister Joe Hockey to release the Privacy Impact Assessment report, which legal firm Clayton Utz prepared.

Additionally, the business case, produced by KPMG, will only be released when KPMG removes "commercially sensitive material".

In a Senate budget Estimates Committee held last week, Geoffrey Leeper, deputy secretary of the Department of Human Services, said he had initially hoped the PIA would be finished on February 9; however, the document needed to be reviewed, "because the business model in the business case had moved as [the report] was being finalized".

Graham Bashford, deputy CEO at Centrelink, told the hearing that KPMG has been charged with releasing the business case for access card development and will do so "as soon as possible".

Leeper said Minister Hockey has indicated aspects of the report needed to be removed "in order not to confer commercial benefit on potential tenderers".

So far work on the business case has cost an estimated $1.944 million over the seven months from November to May this year.

"KPMG was engaged through the Department of Human Services' ICT consulting panel by partner organization KAZ," Leeper said.

"The contract was for an hourly-rate basis and capped at $1.75 million. It was a small extension to the contract announced in April to enable additional work on the business case preparatory to consideration by government."

According to the Senate Estimates Committee, and claims made by Bashford, the $1.1 billion "smartcard" budget, allocated over four years from 2006-07 to 2009-10, will be divided thus:

  • Centrelink will receive $436 million in resourcing and $63.2 million in capital. Medicare Australia will receive $383 million for resourcing and $13.3 million for capital. The Department of Human Services will receive about $175 million for resourcing and $0.6 million for capital.
  • Families, Community Services and Indigenous Affairs will receive $0.26 million and Veterans' Affairs $14.1 million for resourcing and a capital budget of $3.4 million.
  • The overall communications budget allocation is $6.5 million in 06-07, $20.6 million in 07-08, $8.5 million in 08-09 and $4.9 million in 09-10. According to Bashford, $7 million will be spread across Centrelink, Medicare and Veterans' Affairs for "internal communications associated with access card arrangements".

Australian Privacy Foundation chair Anna Johnson said Hockey will not release the PIA report because he believes it is already redundant following a change in the project scope.

Johnson said in that respect, then the KPMG report must also be redundant.

"Hockey keeps assuring us that privacy is foremost in his mind - and yet he refuses to demonstrate that he has accepted a single one of the recommendations made to him to date," Johnson said.

"This throws into doubt all the major claims the minister has made, from the potential costs to the estimated benefits.

"If he won't release the reports, how can we trust that this project is at all well considered or balanced - or will even work?"

Chairman appointed

Last week, Human Services Minister Joe Hockey announced the formation of the Access Card Consumer and Privacy Taskforce to be headed by former Australian Competition and Consumer Commission chairman Professor Allan Fels.

Fels will liaise directly between consumers, privacy advocates and the department of Human Services from the newly created Office of Access Card in Canberra to provide independent advice on both issues and possible solutions.

Fels said he will talk to consumer and privacy advocates to work out the best way for ongoing consultation.

"As an independent advisor, I can provide an objective perspective to the minister and his department, and to the community, as we address the issues and work through them," Fels said.

"There may be times when I disagree with the government or Minister Hockey. If so, my aim will be to work through any differences to reach a sensible outcome.

"If I remain opposed, I will say so."

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