[LINK] Hatched, matched and despatched

[brd at iimetro.com.au]

Hatched, matched and despatched
Ben Woodhead
AUGUST 15, 2006
The Australian
http://australianit.news.com.au/articles/0,7204,20098189%5E16681%5E%5Enbv%5E,00.html

THE personal records of thousands of Australians are being scrutinised each week
as part of a massive data-matching program that covers state and federal
agencies and is increasingly reaching into the private sector.

Carers, pensioners and market stall operators are among a growing number of
citizens targeted by powerful computer systems that automatically crawl through
millions of records seeking the slightest changes to personal circumstances.

The systems, which tap into databases held by agencies such as the Australian
Taxation Office and Centrelink, drive an ever-expanding federal crackdown on
tax evasion and welfare fraud that is expected to generate gross savings of
more than $100 million annually.

State government agencies including horse racing regulators, motor registries
and land title offices have been drawn into the complex web of data exchanges,
and the financial services sector is being called on to share client
information.

"We've got about 80 data matching programs at the moment and that includes
government agencies and non-government agencies," Tax Office lodgement
compliance deputy commissioner Shane Reardon says.

"We're working with state revenue authorities on property transactions.

"We're going through luxury car data, and that's receiving information from
state and territory licensing authorities.

"We're receiving building and construction data from the various state
governments.

"Workcover authorities in a couple of states are also contributing information."
The list of federal departments and agencies involved in data matching is just
as long.

The Department of Immigration and Multicultural Affairs, Department of
Corrective Services, Child Support Agency, Medicare Australia, Department of
Health and Ageing and Department of Employment and Workplace Relations are
among the growing number of participating organisations.

Spending on data matching is also increasing and the federal government
increased investment in systems and enforcement to $282.3 million over five
years in the May budget. That funding is expected to deliver net savings of
$266 million.

Sitting at the centre of many of the data matching projects is Centrelink, whose
powerful relational databases are used to track down thousands of instances of
welfare fraud each year.

The agency is preparing to link to state land titles offices to review the real
estate assets of 120,000 pensioners in an effort to track down undeclared
properties.

"We do a lot of data matching with a range of state and federal government
agencies," Centrelink compliance and review national manager Catherine Rule
says.

"We administer a broad range of payments to a broad range of customers, so the
information we need is pretty varied." Centrelink also carries out large-scale
sweeps of its own data, and the agency is working on a system to automatically
check welfare recipients' addresses when changes are made, to detect undeclared
de facto relationships, Rule says.

Aside from a weekly overnight swap with the Tax Office, the process of data
exchange has been one-way, but that is about to change.

"We don't do large-scale data matching with other agencies all that often.
That's one of the things we're looking at with the Child Support Agency," Rule
says.

"We exchange information with them at the moment on a case-by-case basis, so
they might contact us to confirm information about one of their clients.

"We're looking at automatic exchange so that their database is automatically
populated with that information."

The Department of Health is also strengthening its data matching relationship
with Centrelink, a Health spokeswoman says.

"Following a 2006-07 budget announcement for the Family, Community Services and
Indigenous Affairs portfolio, the Department of Health and Ageing will provide
information to Centrelink about people permanently entering residential aged
care," the spokeswoman says.

"The data will be checked against information on people receiving carer
payments. This will avoid unintended overpayment to the former carer."

Whereas the ATO often relies on manual data exchanges for its matching
activities, Centrelink is using automated electronic links to extract
information from agencies such as Health and Medicare.

Those links, which increasingly rely on web services, are being expanded to the
private sector through pilot programs with banks, insurers and retail giants
Woolworths and Coles, which employ several hundred thousand workers between
them.

The Department of Employment and Workplace Relations, meanwhile, is using
connections built on Microsoft's .NET architecture to swap information with
Centrelink and the private sector employment agencies that make up the national
employment network.

Data is exchanged using mainframe-to-mainframe transfers with Centrelink, and
via web services.

Other technologies that federal agencies use for data matching and mining
include customer relationship management platforms from vendors such as Siebel
(now owned by Oracle), Teradata data warehouses and analytic tools including
software from SAS Institute. The Tax Office has endorsed the extensible
Business Reporting Language (XBRL) standard to facilitate data exchanges.

The department's employment systems group manager, Stephen Moore, says
information the department shares with Centrelink can be used to police job
seekers, employers and the Job Network employment providers.

"We present our providers with the actual earnings that a placed job seeker has
declared to Centrelink.

"They can then make sure it tallies with their understanding of what the job was
paying," Moore says.

"They might then go to the employer and find out if they have ended up paying
the job seeker something different. It provides a bit more openness in the
system."

While federal agencies are eagerly embracing data matching and extending their
systems' reach into the private sector, not everyone is happy with the
developments.

Australian Privacy Foundation chair Anna Johnston has concerns that the federal
government's proposed microchip-equipped welfare access card could open the
door to wholesale data matching against records held by the private sector.

"Of particular concern to us is Centrelink collecting data at the same time
Human Services Minister Joe Hockey is talking about introducing the access
card.

"The fact that everybody would have a unique identification number that could
not only be used by Centrelink and Medicare, but also by the private sector,
effectively as a customer number, opens the door to wide-scale data matching,"
Johnston says.

Federal government data matching activities are restricted by the Privacy Act,
and agencies such as Centrelink and the Tax Office stress that they adhere to
their obligations.

Nevertheless, legislative changes are regularly made to enable data sharing
between federal organisations. Changes are currently being made to the
legislation that covers the Child Support Agency and Medicare to enable their
electronic data matching activities with Centrelink.

Data matching advocates, including the ATO's Reardon, argue that the practice
may one day make life simpler for taxpayers by allowing the creation of
customised tax returns and benefits applications.

He also argues that data matching is not just a revenue-raising activity that
tars all citizens as potential tax or welfare cheats.

The ATO raised $178 million in revenue through data matching in the 2005
financial year and uncovered $50 million in unpaid tax owed by legal
professionals.

"Not every risk we address is driven by revenue. When we do risk assessments
there's a revenue estimation associated with it, but it's also about the
integrity of the system," Reardon says.

"Where we'd like to go is more on a preventive path, so we can use third party
data to inform taxpayers of information they should include, prior to them
lodging their return."

The Tax Office is running a pilot with Centrelink to test this facility and some
Centrelink benefit recipients are now receiving returns pre-loaded with agency
information.

The Tax Office would like to extend this to payments such as the Family Tax
Benefit, and some client information is also being provided to income tax
accountants through the agency's Tax Agent portal.

"There's a fair bit of work to do with other agencies and other information
providers about their ability to provide data and the costs of doing that,"
Reardon says. "This is still in its infancy really, but as an end strategy,
that's where we'd like to go."

Like Centrelink, the Tax Office would like to do more data matching with the
private sector and it is looking into links with financial institutions that it
would use to track down undeclared interest and dividend income.

The federal Government is also keen to boost prosecutions for welfare fraud and
tax evasion each year.

The May budget included $3 million a year for the next four years to the
Commonwealth Office of the Director of Public Prosecutions to cope with what is
expected to be an increased number of referrals from Centrelink, as its new data
matching programs ramp up.

The powers of Centrelink fraud investigators will also be beefed up, the federal
budget papers say.

--
Regards
brd

Bernard Robertson-Dunn
Sydney Australia
brd at iimetro.com.au

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