Outsourcing responsibility for the census was a failure

The company at the heart of #censusfail, IBM, was once paid more than $1 billion to deliver what started out as a $6 million contract to upgrade the Queensland Health Department's payroll system. For decades we have been told that "the private sector is more efficient than the public sector", but those who tell us this seem wilfully blind to the failures of "the market".

The Turnbull government did not just outsource the IT system behind #censusfail, they outsourced the responsibility. Like an Olympic athlete who misses the start of their race, there are no "do-overs" for a once in five-year census. But despite the permanent harm to the credibility of the ABS, the permanent reduction in the quality of the census data, and the enormous waste of people's time, Australian citizens still paid IBM in full for a high-quality census we didn't get. And, of course, no minister would ever resign for overseeing a debacle any more. In an outsourced world it is not ministers who fail, but "the market".

Once upon a time, under what we used to call our "Westminster System of Government" the main job of ministers was to oversee the efficient and effective delivery of the government services. It wasn't a glamorous job and the most likely cause of a "high profile" was inability to manage a department well.

But the neoliberal obsession with privatising and outsourcing the actual delivery of services to the private sector, combined with enormous growth in the number of taxpayer-funded "personal staff" in ministerial offices, has fundamentally changed the role of minister. Rather than focus on the enormous, if often tedious, job of managing the delivery of essential services, the modern minister is often more interested in "shaking things up". While identifying room for improvement is part of the job, announcing grand plans to drive future efficiency is no substitute for delivering actual efficiency.

Decades of "efficiency dividends" and other euphemisms for public sector cuts have fundamentally eroded the ability of agencies like the ABS, which has lost hundreds of staff in recent years, to deliver basic services. The AEC's conduct of the Western Australian Senate election in 2013 was slammed by the inquiry into a performance that was so bad we had to hold the first ever "Senate byelection".

Millions of hours of Australians' time are wasted on hold to Centrelink as call-waiting times have blown out. The NDIS payment system apparently can't make payments. The only thing that separates #censusfail from systematic maladministration is that we were all looking at the same thing at the same time.

Once upon a time a minister would have raged against the suggestion that cutting their department's funding would help them "improve efficiency", but once upon a time ministers would have thought they would be held responsible for failures on their watch. Those days seem long gone. The modern minister embraces the "opportunity" that comes with shedding staff.

Over the past few decades the siren song of savings from outsourcing has dashed billions of dollars of taxpayer money into the rocks of reality. But of course, a stripped down public service that sees the minister as their main "customer" often lacks the institutional memory to recall failures past, the confidence to remind new ministers of such lessons, or both. Take the history of IT outsourcing for example.

Back in 1997, the then finance minister John Fahey declared that all major IT systems should be outsourced to the private sector in order to improve quality and save money. Sound familiar?

According to the subsequent report into the expensive outsourcing shemozzle by the Australian National Audit Office, there were significant problems with "the cost and timeliness of the program, the methodology used to calculate savings, the timing and extent of budget cuts in anticipation of savings, the management of security and privacy issues, the management of the relationship with the strategic adviser, and service delivery disruption". But other than that, it was a "great idea". The kind of innovative, big picture, new thinking that one becomes a minister to pursue. Who cares if it was poorly implemented, the public sector unions hated it and the private consulting companies loved it. Win win.

The first recommendation of the ANAO report was "consideration of the advantages to the Commonwealth of having a specific agency assigned responsibility for the conduct and co-ordination of market surveillance and analysis to support and inform strategic planning by agencies for the re-tendering of outsourcing agreements following completion of the initial implementation of the IT Initiative". Wouldn't that have come in handy when the ABS was outsourcing its first ever census?

Twenty years later the public is rightly outraged over the ABS's conduct of the first "e-census". And 20 years later it was another Coalition government that decided to save money by running the census online and outsource the task of doing so. No doubt a sacrificial lamb will be found, and the odds of them being a minister are as low as the impending inquiry's terms of references considering whether outsourcing and efficiency dividends might be the "root cause" of Tuesday night's debacle.

There is no doubt that the ABS did a poor job of communicating with the Australian people about the significance of its changes to this year's census. But, and I am sure my friends in the quantitative sciences will forgive me this generalisation, are we really surprised that a large group of the best statisticians in the country are somewhat lacking in PR and communication skills?

Neoliberalism has so debased our expectations of the public service that we now take for granted that an underfunded statistical agency struggling with implementing an enormous challenge for which it is poorly equipped should have spent more taxpayer money on PR advisers and less money on IT and statisticians. We are now so accustomed to taxpayer money being spent on pumping out a minister's spin that many seem to think that the ABS should have been spending less of its inadequate resources on IT and statisticians and more on comms advisers. What do the hundreds of taxpayer-funded ministerial staffers do again?

Australia is one of the richest countries in the world, but we insist that agencies like the ABS, the Australian Electoral Commission, child protection services, mental health services and Centrelink all operate on the smell of an oily rag. We are told that "new systems" mean that we can "do more with less", but what we aren't told is that we no longer invest in the capacity to cope with anything unexpected.

Stretched departments often simply hope that nothing unexpected happens. But, as the children who die as we systematically fail to fund child protection services show, hope is not a strategy. The simple facts are that our failure to invest adequately in the public sector has left large parts of our economy and society quite vulnerable and that the "private sector efficiencies" we were promised have become a major cost burden.

For decades we have been told that outsourcing and privatisation would lead to efficiencies that would mean we have more money to provide more services. And for decades we have been told that we need to grow the economy before we can "afford" to treat the elderly with dignity and the disabled with respect. Well, GDP had doubled in the last 20 years and we have outsourced and privatised more thoroughly than most countries ... so when will the quality of our public services start to improve?

Politics has been described as show business for ugly people. That may or may not be the case, but neoliberalism has turned the role of minister into decision making for unaccountable people. It is not just the census website that doesn't work as promised, the whole idea that outsourcing tasks and responsibility to "the market" has not lived up to expectations. When do we get to inquire into that?

Richard Denniss is the chief economist for the Australia Institute