Using data analytics and a big stick in the form of regulation, the New South Wales Government successfully drove a data sharing regime that continues to deliver significant reform.
Speaking at the recent Randstad/AB+F Leaders Lecture, NSW Minister for Finance, Services and Property, Victor Dominello (pictured), outlined how his government drove the “impossible” task of opening up data in the public service and how significant cost savings from the initiative were achieved.
“Sharing data was virtually impossible in the public sector despite successive Premiers talking about it for years,” Dominello said.
“While some government agencies were good and some needed encouragement,” according to the Minister, the establishment of the Data Analytics Centre provided the “big stick” to ensuring data sharing was compliant across the 168 government agencies from a vast range of portfolios including education, health and policing.
The DAC, the “first of its kind” and was set up following the Data Sharing (Government Sector) Act which passed NSW Parliament in 2015.
Cabinet needed to have a rigorous approach in its decision-making process and I found data sharing was key to that
While the state government has not yet needed to use “this big stick”, it has been an effective measure to push agencies – subject to privacy and security - to deliver their data in 14 days upon request.
“Data sharing starts with cultural change. Substantial legislation was needed to confront and overcome challenges to a culture that was resistant to data exchange.”
According to Dominello, some agencies were concerned that that they could be exposed under such a framework, particularly in the areas inefficiencies and excessive bureaucracy.
However, the Minister was a firm believer that a government needs to make policy and budget decisions based on evidence.
“I sit in Cabinet, and many decisions were based on intuition and gut feeling. Cabinet needed to have a rigorous approach in its decision-making process and I found data sharing was key to that.”
Such an approach was found in data analytics. Led by the DAC, the government has been able to achieve a number of positive outcomes particularly in delivering cost savings.
One area that both the DAC and NSW Government tackled effectively was in Compulsory Third Party insurance, also known as Greenslip Insurance.
It has been a battleground for successive state governments. In fact a former Labor Minister John Della Bosca was known to have quipped: “Trying to reform CTP insurance is like watching the first 30 minutes of Saving Private Ryan”.
Under the DAC’s proposals, a taskforce was set up that coordinate data sharing between the key authorities including the Department of Fair Trading, Department of Health, compensation lawyers and the NSW Police.
Such an initiative was never done before and through this data sharing, Dominello said, that the government as able to “get some serious insights” that uncovered a stunning $10 million worth of fraud and exaggerated claims
The police undertook a number of covert operations, swooping in on the fraudsters. The operation resulted in 10 arrests, one conviction and one deportation Ultimately the cost of green slips were cut from $710 to $520.
“We started seeing for the first time, in a long time, that the price for Greenslips were going down, not up and that’s because we used data in a smart way.”
Privacy is sacrosanct in an open data regime. As soon as you lose trust, you lose everything
Science of data
A similar approach was adopted in the builders’ warranty insurance market. Costs were skyrocketing, with $1.5 million a week in claims being paid to bankrupt builders.
The DAC was able to predict - with an 84 to 85 per cent confidence level - that a builder could go bankrupt – resulting in potential savings of up to $12 million.
Interestingly, the analysis uncovered an interesting finding – that builders who go bankrupt, are those are actually very good at their jobs. The problem here, the data found was that such builders took on too many projects – often through positive referrals and eventually struggled under the strain of too many jobs.
The science of data can now predict a builder potentially in trouble. “Using algorithms, the regulatory body can step in earlier in the cycle - before a builder moves into bankruptcy.”
The DAC has also been working on analysis to better understand the job market. Again, using algorithms, the agency is evaluating the jobs of tomorrow against the 12,0000 courses currently marketed in TAFE. This will ascertain whether these courses will in fact be relevant today.
Dominello welcomes the open banking decision by his peers in Federal Parliament, describing the initiative as a “brilliant idea”.
He said any open data regime can only be sustainable if privacy issues are addressed. In fact, the NSW Information Commissioner Elizabeth Tydd is involved in all the taskforces driven by DAC to ensure privacy issues are considered and standards are adhered to.
“Privacy is sacrosanct in an open data regime. As soon as you lose trust, you lose everything,” he said.
The full coverage of the presentation as part of the Randstad Leader’s Lecture series, will be featured in the next print issue of AB+F Magazine.