Data to Inform a Nation: Opportunities and Challenges

Trans-Tasman Business Circle, Sydney, 1 November 2019

Opening remarks from David W. Kalisch, Australian Statistician

Data is part of our essential national infrastructure

ABS data, and other reliable information, are part of Australia’s critical national infrastructure, providing an essential service to the community alongside transport, telecommunications, energy and water.

Our national statistics inform key decisions made by governments, business and the broader community. They are produced using transparent, quality methods, without influence from vested interests, and trusted across the community.

Over any year, ABS delivers more than 500 official statistical releases, including monthly labour force information, quarterly national accounts, inflation and wage measures, population estimates, balance of payments and financial statistics, alongside less regular social and environmental statistics. Our official statistics provide insights into our changing society, economy, population and environment.

Official data and other information shape fiscal and monetary policy settings, providing information about the state of our economy, current risks and key influences.

Our national data provides evidence about many contemporary issues, such as jobs and unemployment, structural adjustment, housing affordability, household consumption, income and wealth inequality, cost of living, energy prices, population change, quality of life in our cities and regions, education and health outcomes, outcomes for our Indigenous people and other disadvantaged groups, information on our natural resources, and much more.

Our data helps shape public policy and service delivery approaches across health, education, social services, infrastructure, industry and environment sectors to name a few. Official population estimates and other data are used to distribute billions of dollars from the Commonwealth Government to the states and territories, as well as grants to local governments.

Official statistics support Australia’s democracy. ABS population estimates contribute to maintenance of fair electoral boundaries, a key input to federal redistributions between and within all states and territories. ABS provides authoritative information around a range of issues, informing choices by voters and political aspirants.

Businesses use official data and other information to guide their investment and operational decisions. Similarly, households can draw upon our official data when they are considering important life choices.

The bottom line is that our nation relies upon the quality, timeliness and relevance of our official statistics.

How do our national statistics compare internationally?

ABS has long been recognised as one of the world’s leading statistical agencies, by our statistical agency peers across the world. I do not believe this is well understood or appreciated domestically.

Australia benefits from the best labour market statistics, in any global contest. Over recent years, ABS has prioritised and strengthened the quality of our monthly labour force estimates, and encouraged key users to make greater use of our trend estimate series published since 1987. We now publish monthly estimates of underemployment and underutilisation.

This has been further complemented by use of new linked employee-employer data, providing information on multiple job holding and local labour market information. Our new Labour Account experimental estimates confront information drawn from household and business sources to provide our most reliable information on industry employment trends. Our wage measures and job vacancy data are now primary labour market indicators. These improvements to our labour market statistics are increasingly relied upon by key users such as the RBA and Treasury.

Use of scanner data and web scraping in our compilation of the CPI and our recent move to annual re-weighting of the CPI has improved the accuracy of our inflation measure over time. However, Australia is the only G20 country that does not have monthly inflation data, but this does have an annual price tag of $3-4 million.

Our quality population estimates draw upon a range of data sources including our five yearly Census, immigration data, information from State Registrars of Births, Deaths and Marriages and Medicare data.

We continue to produce world class National Accounts, one of only four nations to publish all 3 dimensions of GDP on a quarterly basis. ABS has enhanced productivity measurement, and we are progressing further improvement to output and productivity measurement in the growing non-market sectors of the economy, including health and education. ABS is collaborating with the global statistical community (including OECD and IMF) to respond to the measurement challenges of globalisation and the digital economy in a coordinated and structured manner.

ABS again produced high quality and comprehensive data from the latest Census, comparable with past Australian Censuses and international Censuses (Census Independent Assurance Panel, June 2017). Census 2016 provided updated information on how some key features of Australia had changed and contributed to updated population estimates and population projections. Australia is among few countries that conduct such a comprehensive population Census every five years, rather than the international Census standard of every ten years.

Statistical agencies across the world are providing new information insights through linking data from a range of sources. In Australia, this has delivered new understandings of the role of SMEs across the economy, better understanding of the drivers of firm performance, more accurate measurement of school communities’ capacity to contribute, and some evidence of outcomes from a very modest range of government programs and services. There are more insights we can draw from effective use of linked data, to help guide future policy and service delivery strategies of governments.

ABS is recognised as a global leader enabling access to data for policy and research purposes in ways that do not compromise the confidentiality of individual or commercial information. ABS has world leading confidentiality-on-the-fly tools (with our Tablebuilder product), now complemented by adoption of the internationally-recognised Five Safes Framework for safe data use over recent years. We have also introduced a Virtual Datalab facility that has, to date, enabled around 2000 policy analysts and researchers to safely use ABS microdata and linked data from their desktop.

ABS shares our innovations and insights with national statistical offices in other countries, just as we benefit from their developments and innovations. This contributes to the development of quality, timely and internationally comparable methods and information.

ABS continues to deliver these quality statistical insights against the backdrop of substantial cuts to funding (around 30% in real terms) over the past decade. In an international comparison, budget funding to the ABS is now about half that provided to Statistics Canada and below funding received by Statistics New Zealand.

ABS has prioritised our core economic and population statistics, and achieved considerable efficiencies in how we work, while also necessarily reducing statistical outputs in 2008, 2009, 2013, 2014, 2017 and 2018. Stable funding from last year to this year allows our core statistical program to be largely unchanged for 2019-20.

ABS faces a significant challenge to adequately measure a changing economy, society, population and environment over coming years. Continuation of most of our social statistics is reliant upon user funding, and any enhancement to our statistical program is now reliant upon additional funding for this purpose. Additional funding recently announced by Government will now enable the ABS to undertake a time use survey, a national health survey and a mental health survey in coming years.

Opportunities and challenges within this Information Age

More data is being produced in this digital age. New information sources are emerging, colloquially captured under the title of big data. Many of these new data sources can be useful, while some big “data” should clearly come with consumer warnings about its accuracy and utility.

When I began as Australian Statistician in late 2014, there was considerable hope that the information revolution, big data and new technology would provide a way forward for national statistical agencies, helping deliver more information and more quickly.

Well, reality often turns out to be more complex than general aspirations. Contrary to expectations, demand for surveys has continued to grow, as key data users still require some information that can only be delivered from robust surveys. Not all of the new big data sources are good enough for use in constructing our official statistics. Costs of conducting reliable surveys has been growing as it is more difficult to contact households in secure housing, and households with complex lives.

ABS is, nonetheless, also capitalising on increased availability of big data, new technology and new statistical techniques, where this is useful, as shown by recent ABS innovations:

    • Use of retail scanner data and web scraping for measuring price movements for the CPI;
    • Testing use of GPS data for freight transport movements, mobile phone data to estimate temporary populations, satellite data to deliver agricultural and natural resource statistics;
    • Expanding use of administrative data collected by all governments, to produce many of our official statistics – population estimates, trade statistics, industry and housing information;
    • Testing new approaches to households that encourage survey participation and rolling out use of new data acquisition tools that enable greater use of web collection;
    • Use of machine learning techniques to improve the efficiency of our statistical processes;
    • Use of automated programming interfaces to deliver data that better meets user needs;
    • Establishment of a virtual data lab, enabling safe and effective use of detailed data for policy and research purposes; and
    • Continuing to enhance our confidentiality techniques and mechanisms to protect sensitive personal and business information provided to the ABS in trust.
Data can be a powerful tool, assisting with evidence-based policy and effective service delivery.

Technological and statistical developments have enabled statistical agencies to link large data sets expertly and safely in order to draw new information insights from this combined information source. ABS has been enhancing its data linkage activity for over a decade now, and this has been boosted by the funding announced in 2017 for the whole of Government Data Integration Partnership for Australia (DIPA).

New Zealand has demonstrated effective use of data to inform Government policy and service delivery decisions over recent years. Australia has an opportunity to catch up to our trans-Tasman colleagues through further development and use of our data linkage assets through DIPA, and Government has recently stated its intention to make better use of data for these purposes.

Modest, well targeted improvements in our national information and information infrastructure, wisely used for government and business decisions, can deliver benefits to taxpayers that are many multiples of the information investment by governments.

Operating within this Information Age is more than statistical techniques and technology. It is also about ensuring public trust and public support in this developing data environment.

We have witnessed increased community concern around data security following a number of (largely private sector) data breaches and poor data practices, by organisations including Sony, Verizon, Red Cross, Facebook, Cambridge Analytica, etc. These external events have the potential to impact on the ABS and the official statistics we can provide for essential purposes across our nation.

ABS relies on trust of the households, businesses and other data suppliers to provide us with accurate and sometimes very sensitive data so we can produce Australia’s official statistics. We use this information to produce quality statistics on the economy, our population, society and environment.

ABS statistics are made available to expert analysts and researchers, to enhance Australia’s understanding of our collective situation, while also ensuring the secrecy of individual and business information. This requires judgment and expertise from ABS, as well as analysts and researchers.

As the environment in which we operate and as community and government expectations change, maintaining public trust across the data landscape will require considerable attention from the ABS and the extensive array of data users across the community.

Improving how ABS works, to deliver more public value

Most of my presentation has focussed on what the ABS delivers to governments, business and the community.

This is necessarily important, and is deserving of attention.

However, I do want to recognise that how the ABS operates, our organisational performance, is a major determinant of the public value we can provide.

Before I started as Australian Statistician in late 2014, the ABS had been subject to a Capability Review in 2013 which found that ABS needed to transform its strategy, leadership and delivery. Subsequent challenges through 2014 with an insider trading case and issues with the August 2014 Labour Force numbers confirmed the Capability Review diagnosis.

Since then, the ABS had been progressing a comprehensive transformation, focussing on six areas of external partnerships, strategy, governance, people, culture and infrastructure.

Effective stewardship of the ABS, with a complex business model, demands time and judgment. We have around 2500 office staff, operating from nine locations and national lines of business delivered from multiple sites, measuring our economy, population, society and environment, and delivering professional services. We also have around 500 field interviewers spread across the nation.

The 2016 Census experience caused us to reflect on progress with our transformation program, and highlighted that we needed to make more substantive change to our governance, workforce capability and our operating culture.

The 2017 Australian Marriage Law Postal Survey then provided the opportunity to test new ways of working, in a high pressure, public and very sensitive environment. And we took advantage of it, as nothing better than putting learnings into practice!

As a result, compared to earlier years, the ABS has:

    • improved relationships and particularly collaborations with key data users, helping us to prioritise our work program and progress developments in areas of high value to many users;
    • clear strategic objectives, understanding the public value we deliver and using this to direct resources to our high priority activities;
    • strengthened its governance arrangements, in line with that required for a professional contemporary organisation operating in the 21st century, with particular attention to building our risk management skills and maturity;
    • broadened the diversity of its workforce capability, experience and backgrounds, to support better decision making and improving our organisational adaptability;
    • invested in our middle managers, expecting more from them, and seeing an increased contribution from them to overall ABS performance and outcomes;
    • enhanced our operating culture, strengthening internal collaboration, learning and innovation;
    • improved our statistical system infrastructure, noting this is still a work in progress; and
    • been recognised as a leader across the public service in our use of flexible work and activity-based working, which is delivering benefits for staff and enhancing productivity of the ABS.
Even though ABS is now one of the more progressive public sector agencies in terms of its work practices, I would not be so nave to believe there is not more that we can do to improve our organisational capability over coming years.

It is imperative that the ABS continues transforming to ensure we are well placed to meet our nation’s continuing and emerging data needs.

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