Through a combination of documents released by the Joint Select Committee, obtained under the Freedom of Information Act , and otherwise, we have a revealing view of the policy development process of the Australia Card.
Before April 1985, no pressure had been felt from any quarter for the introduction of an identity card - it had not formed a part of any party's political platform to combat tax or social security fraud nor had it been part of Costigan's recommendations following his controversial inquiry.
Not since the second world war had identity cards been in use in Australia.The Stewart Royal Commission had floated the idea of “voluntary” cards, in an attempt to fight passport forgeries but the idea did not gain any currency.
There is one hint that such a suggestion was made to the previous coalition government, only to be rejected.
At no time before the Australia Card proposal was there any serious proposal to introduce identity cards into Australia. The complete absence of the idea of identity cards from the political agenda cards is illustrated by the fact that the Australian Law Reform Commission examined a reference on privacy for seven years, from 1975 to 1983, and the issue does not rate discussion in more than a thousand pages in its Report .
Concern about identity
This is not to say that there have been no problems for government and the community arising from problems of false identification. In the recent past there have been three major and credible sources of concern about false identities - the ‘bottom of the harbour’ and other tax evasion schemes exposed by the Costigan Commission, the leakage of undisclosed interest and dividend income from the tax system, and the public perception of extensive dole cheating. Other issues concerning illegal immigrants, PAYE taxpayers ‘moonlighting’ in false names, and non-disclosure of business and farm income have added to these concerns.
Prior to 1985, serious questions regarding the efficiency and effectiveness of our major receipts and payments agencies had been raised in a number of major reports:
Tax - Quite apart from the “bottom of the harbour” scandal, the ATO had come under increasing critical scrutiny from the Commonwealth Auditor General. In December1984 a report from the Auditor-General criticised ATO's efforts in collecting interest and dividend revenue. In August and September 1986, two further reports made similar attacks on ATO's effectiveness in the administration of the prescribed payments system and the pursuit of unclaimed group certificates. The effect of these Reports is to undermine the ATO's justifications for the Australia Card scheme. Unfortunately, the 1986 Reports were not available to the Joint Select Committee.
Social Security - Similarly, the Auditor General commented on DSS's problems in detecting welfare claims made in false names.
Immigration - A Parliamentary Committee in 1985 had discovered that immigration controls were almost non existent. It recommended a raft of measures to weed out overstayers and make the Department of Immigration and Ethnic Affairs (DIEA) more effective and efficient.
In none of these areas had the bureaucracy emerged with much credit. The political perception of agencies such as ATO, particularly within the ALP Caucus, must have been that their failures jeopardised other Government programs, given the difficulties involved in increasing tax rates or expanding the tax base. By early 1985, therefore, there was good reason for ATO to consider itself to to be under considerable pressure to find ways to increase revenue collection from the existing tax base, and on agencies such as DSS and DIEA to decrease the drain on existing revenue from perceived social security fraud and illegal immigration. The spotlight on the failures of these agencies to carry out their functions was likely to increase.
The history of the Australia Card proposal is, in part, a study in the way the bureaucracy has adroitly snatched a remarkable victory from the jaws of defeat. It has succeeded in diverting attention from its past and present failures or inaction by the promise of a future panacea which makes such failures appear less relevant to the future, because it introduces a completely new element into the debate - a national identification scheme. Past failures may still be relevant, but no-one is likely to dwell on them while the pros and cons of the Australia Card can be debated instead.
The first suggestions
In May 1985, about a month before the National Taxation Summit, a proposal from the tax lobbyist Eric Risstrom and what may have been a ‘managed float’ to the press by a Government backbencher, David Simmons, raised the possibility of an identity card and attracted much publicity. Contrary to the impression given at the time, these suggestions did not initiate the call for an ID card. In April, 1985 the Second Commissioner of Taxation, John McDermott, raised the need for an ID card to prevent tax evasion at a seminar in Hobart. Although largely unreported at the time, this supposedly extemporaneous contribution is cited by proponents of the Australia Card as its origin. It therefore appears that later calls for the card owed their origins to proposals originating at the ATO.
The Tax White Paper
The reaction to these speculative suggestions was muted enough to embolden the ATO and the Government to adopt the proposal in the White Paper of May 1985 which preceded the June 1985 National Taxation Summit and was intended to stimulate discussion about taxation reform. The White Paper claimed that around $800m would be recovered to the revenue annually.
The ID card proposal rated a single page of discussion out of 279 pages. The White Paper described the scheme as ‘a national identification system’, but, beyond that general title, gave no indication that it would have any benefits beyond ‘the fight against tax evasion’ or be available to any agency other than the ATO, with the sole exception of the comment that ‘the opportunity for fraud through the exploitation of the social security system, eg by use of false identities, could be reduced’.
Caucus ‘asserts’ itself
In June 1985 the Caucus of the Parliamentary Labor Party resolved that any consideration of an ID card must be left in political, not bureaucratic hands and referred the issue to the Caucus Legal and Administrative Committee. Despite this, an Inter-Departmental Committee co-ordinated by the Department of Prime Minister and Cabinet embarked upon the ‘policy development’ of the system in May. As a result, the Caucus Committee's deliberations were to be pre-empted by the Tax Summit.
The first Inter-Departmental Committee met on 23 May 1985 and the process of ‘policy development’ commenced. The IDC was given one month to prepare a Report to Cabinet in time for the Tax Summit. Documents available concerning the operation of this IDC allow us to make some inferences about its operation, although to some extent these must remain speculative.
First, representatives from a dozen departments and agencies comprised the IDC, including ATO, DSS, HIC, Treasury, Finance, Attorney-General's, Electoral Commission, Special Minister of State, Veteran's Affairs, Immigration, Foreign Affairs and Health. While a broad-based IDC is not unusual for important proposals, it is significant that most of these agencies were potential major users of any national identification system.
Second, there seems to have been a large measure of agreement that the scheme should have as many uses as possible. Such a consensus seems to be reflected in the breadth of uses proposed by the Government in the Tax Summit brochure. The Health Insurance Commission, in their Outline Plan prepared for the IDC had no doubts that the scheme would be used without restriction by Commonwealth and State government bodies, and that the information traffic would be two-way:
It is envisaged that arrangements would be made (subject to agreement and compliance with any legal requirements) to access databases in all participating government agencies i.e. those that hold basic identifying data for a significant number of Australians and have a legitimate interest in matching that data against other Government records. It is expected that participating agencies would include Medicare, Australian Taxation Office, Foreign Affairs (Passport Office), Department of Social Security, Department of Veteran's Affairs, Australian Electoral Office, State Registrars of Births, Deaths and Marriages and any other authorities with data suitable for inclusion in the system. [emphasis added]
The establishment of such a 'matching process' between government agencies would... enable a participating agency to interrogate standard format databases using on-line terminals linked through a network controller to the Commission's central computer. For the cost of terminal(s) and local Telecom line(s), a participating agency could use this network to research the identification databases of other participating agencies and carry out its own matching.
Third, it appears that the decision that the HIC should operate the scheme emerged from the IDC, and was not part of its terms of reference. The initial meeting of the IDC, which HIC did not attend, agreed that, to operate the scheme
a designated authority (possibly attached to the SMOS [Special Minister of State] portfolio) would be required and that a regional office (possibly use of Post Offices) network would be needed to reach [the] population.
However, by the time the Technical Working Group, which did include the HIC, met on 28 May, HIC had produced a sixteen page Outline Plan as to how it could operate such a system. HIC's enthusiasm to obtain control of the scheme is obvious from this Outline Plan. Its summary of the advantages of using HIC commences ‘The Commission has the facilities, the expertise and the capacity to enable it to undertake this project’, and concludes, rather modestly, that most of the disadvantages are only ‘perceived disadvantages’ to the HIC itself ‘in taking on this additional function, rather than disadvantages for the Government or [the scheme]’.
A week later, a draft Cabinet submission was in circulation between agencies which seems to proceed on the assumption that the Health Insurance Commission was the only possible agency to conduct such a scheme. One note of disquiet was sounded by the representative of the Department of Prime Minister and Cabinet, who requested the Commissioner of Taxation to arrange for ATO officers with computer experience to ‘look at’ the draft because ‘I do not think that it is appropriate that we use in the Memorandum figures which relate only to the option of the NINS [National Identification Numbering System]being implemented by the HIC’. The final Cabinet submission appears, however, to have only included the HIC option. There is no indication that any other agency, including the ATO, objected to HIC operating the scheme. It appears to have been accepted, ultimately, that HIC's experience in operating Medicare had given it the most extensive and up-to-date existing identification register - the best ‘starting point’, as it were, to create a national identification system. Furthermore, the fact that it had a regular means of obtaining updated address information, because of the regularity with which most people made Medicare claims, gave it an additional advantage.
The impression which emerges from the available documents is one of major policy decisions being made in haste. From the date of the first IDC meeting on 23 May to the circulation of the draft report on 5 June is a mere fortnight. At the first meeting of the technical working group on 3 June, the notes of the meeting state that
Discussions of the group were hampered a number of times because there was no clear statement of - the objective of the NINS; the role of the agency that would run the NINS; the interaction of the NINS agency with other government agencies; the requirements of the NINS system, or; the contents of the NINS data base.
In this confusion, the only agency which appears to have had a clear perception of what it wanted is the HIC - and what it clearly wanted was control of the system. ATO no doubt wanted an ID scheme to be created - after all, it suggested it - but there is no evidence in the IDC documents or elsewhere that ATO was ever willing to operate such a scheme itself. The other agencies appeared to be satisfied that HIC was offering them a ‘piece of the action’ in the form of access to the database for their own purposes.
A fourth disturbing matter is that the implications for privacy and civil liberties in the scheme does not appear to have even received token analysis by the IDC. The draft report contented itself with a broad recitation of the information privacy principles then and now under discussion as a result of the unimplemented 1983 ALRCPrivacy Report . As has been mentioned, this Privacy Report was written when ID cards were not even considered a matter worth serious discussion. Many of these same departments were, at the same time, opposing this legislation quite vigorously in separate discussions on the impact of the Privacy Report .
Much higher on the agenda seemed to be the consideration of tactics rather than principle. For example, the HIC Outline Plan cautioned that
It will be important to minimise any adverse public reaction to implementation of the system. One possibility would be to use a staged approach for implementation, whereby only less sensitive data are held in the system initially with the facility to input additional data at a later stage when public acceptance may be forthcoming more readily.
This echoed a list of topics for discussion at one meeting which nominated among benefits of the scheme “scope for future extension”.
Any doubt about the bureaucratic agenda for the proposal may be put to rest by the examination of an instruction to the chairman of one session of the IDC from a senior officer of the department of the Prime Minister and Cabinet. He wrote :“ You could invite participants to outline briefly their views on the feasibility ( of the scheme)....” he continued “ we suggest that acceptance of the need to introduce such a scheme is likely to be promoted if the committee's report focusses on combating tax and benefits fraud...”. There was no scope in the proposed format of the meeting for the expression of a dissenting view or policy options.
The first IDC is, in general, reminiscent of Mel Brooks' film The Producers, in which the first object of the exercise was to try to sell 150% of the property. The core interest groups, ATO and HIC, quickly welded together a coalition of interests broad enough to give the proposal considerable initial momentum. The expansion and contraction of the peripheral players became an important part of the subsequent political strategy. As the objections of privacy advocates became more and more strident many of these minor shareholders were sacrificed - no doubt with the original assessment of ‘scope for expansion’ still firmly in mind.
The Tax Summit sidesteps Caucus
Cabinet adopted the approach of the first IDC at a meeting in late June. The Tax Summit brochure revealed to the public for the first time far more extensive proposed uses of the ID scheme than to combat tax and social security fraud:...
this system will aid identification for tax, social security, employment and other purposes ... it will also help reduce health and welfare fraud ... it will also help detect illegal immigrants ... will provide improved demographic data ... will take on even more significance in emergencies ... (will) prevent or reduce the incidence of ... other abuses of government programs ..
The open-ended nature of the list of Government agencies able to be utilise the scheme was also apparent from the Tax Summit brochure:
In the longer term (an objective is to) rationalise the many government identification systems currently in operation ... a three year program will be initiated to obtain savings from a rationalisation of the diversity of government identification systems.
Having hurriedly reached the conclusion that the scheme was feasible and HIC should operate it, the IDC had still left the proposal saddled with the unfortunate acronym NINS (national identity numbering system). Some wags even suggested AIDS ( Australian ID Scheme). An advertising agency came to the rescue in time for the Tax Summit and the ‘Australia Card’ complete with photo and green and gold livery was launched by an enthusiastic Dr Blewett, who had by now been given political responsibility for the scheme, as Minister responsible for the Health Insurance Commission.
According to the glossy brochure, the scheme, once established, would recover $800M per annum, cost a mere $49M per annum to operate to establish and be fully operational by 1989. At the Tax summit, swamped by more momentous issues, the proposal was endorsed with little debate.
The ALP submits
A few weeks later the Caucus Legal and Administrative Committee, now trumped by the Tax Summit decision, endorsed the proposal by a majority vote, subject to the simultaneous introduction of privacy legislation and a Bill of Rights. When the issue went to the full Ministry, a further complication arose when a ‘consensus’ motion led to the decision that the card should proceed without a photograph. A pocket of resistance remained in the ALP national legal platform Committee, which resolved to recommend that the 1986 ALP National Conference oppose the card - a resolution which ultimately came to nothing.
The decision-in-principle of the Taxation Summit led to the establishment of the second IDC. The Report of this Committee was only released by the Joint Select Committee just before Christmas 1985, although it had reported in August. The second IDC consisted of representatives of all departments and agencies represented on the first IDC, plus the Australian Bureau of Statistics, Australian Federal Police, Education, and Community Services.
The blunt assertion of the sweeping scope of the scheme found in the HIC Interim Planning Report was absent from the second IDC Report. It drops the reference to 'any other authorities', but lists the authorities named by the HIC as the 'major' participating agencies. However, the Department of Immigration and Ethnic Affairs (DIEA), the Department of Education, and the Australian Bureau of Statistics (ABS) were now added to the list of those who would have access to the register. The 'Draft IDC Legislative Outline' continues to leave the options for expansion open, by proposing that access be limited to the abovenamed authorites, and to ‘such other Departments and Statutory Authorities as are prescribed by regulation (subject to parliamentary scrutiny and to the possibility of disallowance by the Parliament)’.
It is not so much the ‘possibility of disallowance by the Parliament’ which we should note here, but rather the confident expectation and forward planning by the Government's advisers for the gradual expansion of access to other agencies. Such extension could then take place without the necessity for the fuller Parliamentary and public scrutiny which would accompany amending legislation, and without any politically embarrassing suggestions that the Government was reneging on a promise not to expand the scheme. After all, the mechanism for extension was always part of the original proposal!
Some at the first IDC had apparently disparaged the need for any privacy legislation, arguing that the FOIA secured sufficient privacy rights for the introduction of the system. This time around the IDC embraced the need for privacy legislation, a concession which may have been borne more out of a desire to neutralise opposition, and to respond to the Labor Caucus, than out of conviction. Although some people would never be reassured by Government promises, the IDC said “Public concerns would be manageable , in terms of the Information Privacy Principles ...” (emphasis added).
Contrary to the decision of the Ministry, the need for a photo on the card was reiterated by the IDC.
By late 1985 it was clear that the scheme's passage would not be an easy one despite the grudging support for it which had been extracted from Caucus. The Opposition parties had indicated unease about the open-ended nature of the scheme. The Government did not control the Senate, so it agreed to establish a Joint Select Committee (JSC) of the whole Parliament in preference to a Senate Select Committee. The Joint Select Committee commenced hearings on 17 December 1985, completed them on 1 April 1986, and delivered its Report by 1 May 1986. The Government's Submission to the JSC was not delivered until 6 February, and the HIC's Planning Report not until 26 February. It was only with the release of these documents that the Government's full intentions became known, so the JSC and those wishing to make submissions to it had a little over a month to respond.
The Government's submission to the Joint Select Committee
The Government proposed to allow access to the ‘Australia Card’ register to all the agencies suggested by the second IDC, with the exception of the Electoral Commission. In addition, some new users were added: the Department of Housing and Construction, the Department of Community Services, the Commonwealth Employment Service, and the Family Court. A final extraordinary addition was that any researcher conducting an epidemiological study approved by the National Health and Medical Research Council could have access to the register.
As well as these additions, the HIC Planning Report made it clear that the register would be used as a general purpose locator for all participating agencies. In order to establish an 'interdependence' between the register and participating agencies, each user agency would be able to have recorded on the register those items of information about its clients which, if they change, are to result in automatic notification to the user agency by the register (eg change of address). These proposals go beyond mere location and constitute what may properly be called 'data surveillance', the continuing monitoring and reporting of aspects of a person's behaviour by the central register, in contrast to such reports only being made when requested by the user agency. Data surveillance was a qualitative change in the previously announced techniques of the register.
A further hardening and extension of the scheme was that until this Submission the Government had maintained that any card would not be a compulsory identifier for government purposes. In the Treasurers' tax statement in September 1985 it was clearly stated that non- production of the card or number would not alter rights or benefits, subject to production of adequate alternative proof of identity. The second IDC's approach was that alternative means of identification would still be accepted.
In its Submission, the Government was stuck with its ‘preferred option’ for a card without a photo, thanks to the Cabinet ‘consensus’ vote, although it was perfectly clear from its Submission to the JSC that it wanted a card with a photo. The Committee minority ultimately recommended a photo, and the Government promptly abandoned its ‘preferred position’ without even feeling the need to offer an explanation.
The Committee majority rejected “all proposals for issuing of identity cards, with or without a photograph”. They proposed an alternative scheme based on extending the use of the existing tax file number, combined with means of increasing the integrity of than number. In summary, their proposals are:
“That the use of the tax file number be extended to cover all the financial transactions proposed in the Government submission for use of the Australia Card number by the ATO, as well as for social security purposes.”
Compulsory reporting of transactions to ATO should be extended, as proposed for the Australia card. The majority therefore endorsed a fundamental element of the Government proposal, but without an ID card.
All other Departments would be barred from access to and use of the tax file number. Medicare should continue to operate as a separate entity, with a separate numbering system.
There is no need to issue every person in the country with a new number immediately. Current tax file numbers of more than 5 years standing (6 million people) are of sufficient integrity for tax purposes, and can be confirmed by normal audit procedures over a number of years.
Those with current tax file numbers of under 5 years standing (3 million), and those who do not have a tax file number (4 million), should be required to confirm or obtain their number from DSS (as agents for ATO), after a personal interview and document checking procedure exactly as was proposed for the Australia Card. A cross-check of the proposed national BD&M register would also be carried out. DSS is preferred as the issuing office because of its multiplicity of local offices.
DSS should progressively review proof of identity of all existing pension and unemployment benefit benificiaries, to bring them within the system of controls based on the tax file number. Until the national BD&M register is established, DSS should not accept birth and marriage certificates as 'sound' documents.
Most of the majority's other recommendations were also made by the minority, and have been accepted by the Government:
A national computerised BD&M register, with similar limits on Federal access.
A DPA with initial jurisdiction over all Commonwealth computerised data banks.
Uniform State and Commonwealth regulations aimed at fraudulent banking and financial transactions, as recommended by Costigan.
Legislation allowing Commonwealth Departments and authorities to inform appropriate authorities about suspected fraud.
The Committee majority therefore proposed an alternative scheme which included many significant elements of the Government's proposals, but one which did not involve the participation of the HIC, let alone operation of the scheme by it.
The Government response
The JSC majority argued that, if the Government's proposal that thirteen agencies have access to the register was adopted, then it would be impossible to stop the uses of the card extending, given the wide range of initial uses; that it would become an ‘internal passport’; that the register could be used to create all-encompassing ‘dossiers’ on individuals; that the register and the UIN would facilitate the spread of ‘matching’ of large subsets of otherwise unrelated databases, with dangers to privacy, normal judicial procedures and evidentiary standards; and that, in the long run, a mechanism would be established which could be abused for authoritarian political purposes. The Committee unanimously opposed the Government proposal to allow access to thirteen agencies.
The Government decided, however, to follow the recommendation of the JSC minority and proceed with a ‘limited’ scheme which would restrict access to three agencies: ATO, DSS and HIC. The Committee minority's stated reason for the reduction from thirteen to three was
because we have serious concerns about the possible intrusion of privacy and breaches of civil liberties under a widespread system of national identification. Our restrictions on the Departments able to use the card and the Registry, combined with the Government commitment both to establish a Data Protection Agency and to legislate for privacy ... will, we believe, answer those concerns.
Supporters of the ‘Australia Card’ scheme may argue that any privacy dangers are therefore significantly lessened. Given the history of the scheme, there are many reasons to be sceptical of such claims.