Digital Mailbox or Virtual Australia Card? Australia Post’s big gamble

Analysis: Julian Bajkowski

The prospect of a single national identity credential being issued to all Australians has reignited after a senior executive at Australia Post suggested that it would be “wonderful” if a future Coalition government put in place a “mandate” for government agencies to use its new digital mailbox service.

The comments, attributed to Post’s head of external affairs Jane McMillan, have caused a serious stir among privacy practitioners and the banking sector.

A key concern is that the mail monopoly has gone some way to convincing both sides of politics it is well positioned to be a central hub for the issuance of a new virtual identity card that could be used alongside its mailbox to provide secure transactions.

Ms McMillan was previously the senior media advisor to former Communications Minister Senator Helen Coonan, who served in John Howard’s government, so is well qualified to understand the economic and political challenges that Australia Post faces. Peta Credlin, who is now Opposition leader Tony Abbot’s chief of staff, was Senator Coonan’s chief of staff for some of her time as Communications Minister.

The politics of identity, however, easily transcends partisan brands and can quickly polarise them from within.

Both Labor and Coalition governments tried, and failed, to sell pre-internet versions of centralised identity documents to open the door to government transactions   ranging from Bob Hawke’s now infamous Australia Card to Joe Hockey’s ill-fated ‘Access Card’ that was dumped in the middle of the 2007 election campaign.

Even so, Australia’s fractured, complex and frequently overlapping identity requirements have long frustrated government service providers, clients and ministers alike.

The multitude of documents and cards required for simple transactions maximises administrative effort and thwarts convenience for interactions that the government often compels – like tax, welfare and licensing. It makes people detest bureaucracy.

This is even before the internet or the online transactions it enables comes into play.

Both sides of politics have made little secret that they keenly relish the prospect of government services being transformed and delivered to constituents with the almost effortless convenience, speed and efficiency that has embedded companies like Google, Apple and Amazon into consumers’ lives.

Yet there’s an enduring problem for public administrators and politicians alike. It’s that even though there is strong evidence that online services can be delivered online much faster and efficiently, there is a tangible public hostility for a single identifier, account and authorising credential that can traverse government(s).

Where there is trust, it remains fragile.

Australia Post has been quick to maximise its role as a publicly trusted brand and broker of verified customer identity – often through biometrics   ranging from passport applications to commercial services   so it’s logical Post would apply that same nous to the digital sphere.

Post’s representatives have also previously acknowledged a few years ago at industry events that they looked at developing a portable, verified identity credential capability, but backed off fast because of the clear potential for Australia Card comparisons.

But this this is where the idea of a “mandate” gets both banks and the privacy community worried – a rare feat that goes to the heart of Australia Post’s motivation: survival.

With mail revenues dwindling, Australia Post needs to reinvent its business fast or start handing taxpayers fat, ugly bills. The terms on which it does that that is the key public policy issue.

The first difficult issue that some seasoned public servants have outlined to Government News is that mandating Post’s digital mailbox to be the primary online launch-pad for government services would give people little choice about how they manage their identity online.

While the Digital Mailbox service may seem convenient, it’s still nascent and there are legitimate questions as to whether a standalone ‘citizen account’ platform for unified online government services needs to be subject to a rigorous competitive process that involves assessing different delivery models – as opposed to a single source mandate.

There is also the issue of whether the design and delivery of such a platform should come from the same supplier. Many major procurements routinely use multiple vendors to keep competitive tension in pricing and hedge risk.

Then comes the issue of the business model behind the digital mailbox. It’s no secret that where the real money is supposed to get made is in the secure electronic presentation of bills and documents, usually coupled with online payment facilities.

The issue here is that bank operated BPAY is already the market leader and provides services to hundreds of government agencies ranging from council rates, to licensing to tax. Just as pertinent is the fact that Australia Post abandoned its online bill payments arm in 2007 after it failed to garner any real momentum.

The rub for the banks and BPAY – and the online payments industry as a whole   is that a government monopoly facing an existential threat from the digital economy now wants a licence to repossess a big slice of a low-margin market it miserably failed to make a viable business of the first time round.

If one assumes that Post can and will create a secure digital mailbox and digital identity credential that can straddle Australia’s bureaucracy, many businesses will want to know why they cannot also use it to verify who their customers are – including banks.

Indeed banks were quick to put their collective hand up to get access to the strong identity verification functionality of Joe Hockey’s aptly named ‘Access Card’ so they could pare back cumbersome ‘Know Your Customer’ processes that often relied on paper and other forms of non-photographic documents.

Today, a verified online credential would offer similar utility, but it’s difficult to see how it could work for both banks and Post if they are competing against each other.

Malcolm Turnbull has previously advocated for some sort of digital “pigeon hole” for government documents but was prudently keeping well away from talking to the idea of a “mandate.”

What is less of a secret is that the Coalition have been furiously boiling down their policy options for using digital means to increase public sector efficiency, cut costs and improve services – and there is little doubt Post has been discreetly feeding into these.

Mr Turnbull’s office said it was in broad terms “very supportive” of what Australia Post had done in its digital mailbox, but wouldn’t comment further other than to say more detail on Post will be in forthcoming policy releases.

A list of specific questions has been put to Communication Minister Senator Stephen Conroy’s Office and answers will be added when they are received.

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