The Federal Government has announced a “world-first” $1 billion deal with IBM to supply IT hardware and software throughout the entire Commonwealth bureaucracy, as the Human Service Minister sought to rehabilitate the reputation of data, claiming it’s not a “four-letter word”.

The massive, five-year deal – the most expensive IT procurement contract ever signed by the government – will provide an estimated $100 million in savings.

All departments and agencies will benefit from discounts and software upgrades during the contract, which is the first of its kind with a national government for the technology giant.

"As a major buyer of IBM's products and services, the deal enables the government to maximise the return on its ICT investments and ensures that taxpayers are always getting the best possible value for money," said Michael Keenan, also Minister Assisting the Prime Minister for Digital Transformation.

The agreement, led by the Digital Transformation Agency, will help to realise the government’s ambition to position Australia as one of the top three digital governments in the world by 2025.

IBM said the agreement is a cross-brand partnership involving its hardware, software and cloud-based solutions, and includes joint innovation programs in quantum, cybersecurity and research aimed at furthering the government's digital transformation agenda. 

For the major agencies that partner with IBM today – the Department of Human Services, Australian Taxation Office, Department of Home Affairs and Department of Defence – the agreement improves the current arrangements and makes it easier and more cost effective to access emerging technologies such as AI and blockchain. The arrangement is effective immediately.

“The whole-of-government agreement reflects the growing importance of technology to the government’s transformation agenda. For agencies it will be more simple and cost efficient to engage with IBM. While our technologies make it possible for government to delivery smarter, integrated, always-on digital services for citizens,” Managing Director of IBM Australia and New Zealand David La Rose said.

Other companies will not be excluded from supplying the government, with opportunities to join as a "channel partner" with IBM.

The news follows Keenan’s address to the Committee for Economic Development of Australia, in which he spoke about the need to “tackle head on the increasing perception that somehow [data] is a dirty word”.

Keenan claimed the government’s introduction of some of the most significant reforms to the way we manage and use data in the nation’s history should allay fears of data breaches and misuse.

“It seems like every other day we hear on the news about a data breach or about private data inadvertently ending up in the wrong hands,” he said.

“Incidents like the recent Cambridge Analytica scandal help explain why data, at least in the eyes of the general public, is perceived as something bad or something to be feared. If we allow this negative perception to become entrenched then Australia may miss out on everything that new advances in technology can offer us.”

Data is the fuel powering our new digital economy, Keenan said.

“Just as steam was the innovation that sparked the second industrial revolution, data is what’s driving the fourth industrial revolution. I’ve even heard data described recently as the new oil and I think that is a very good way to think about it. It’s a vast resource that we can and must seek to tap into in order to drive enormous economic and social benefits for all Australians.”

As the government seeks to harness the power of data as a “force for good”, legitimate concerns about data security and the need to respect individual privacy are not being dismissed.

“That must be central to everything we do as a government,” Keenan said.

“Equally important though is the need to start reframing the public conversation around data. We need to stop thinking about it as a four-letter word.”

He said the data generated globally in just the last two years alone is equivalent to all the data generated in the entire history of the world.

“To go back to the oil analogy, you can’t just leave a resource like that sitting in the ground.”

Lateral Economics have estimated the value of government data could be worth as much as $25 billion per year to the Australian economy.

It is also boosting our healthcare system and medical discoveries through the use of big data, including to identify the harmful effects of medicines.

“Using funding under our Data Integration Partnership for Australia program, the Department of Health confirmed 122 medicines already known to be associated with heart failure. Critically, they identified five medicines that were not previously known to be associated with heart failure.

“We can now work with doctors to change prescription guidelines to minimise adverse events, enhance patient safety and avoid the costs of hospitalisation and treatment. This has the potential to save lives.”

Keenan said a digital-based service delivery model is now the norm, with 98 per cent of all Medicare claims – about 40 million claims a month – are now made online.

“This is a dramatic shift from the slower face-to-face and paper-based delivery model of only a decade ago.”

The Productivity Commission identified more than 500 different provisions and regulations within Australian law regulating government agencies’ use and release of data, Keenan said, as he released an issues paper on the development of the Commonwealth Data Sharing and Release Act and called for input from citizens, businesses, data custodians and users.

The creation of the legislation, the Minister said, will ensure valuable data that could help drive innovation isn’t locked away.

Keenan also opened an expression-of-interest process for people to apply to be part of a National Data Advisory Council to provide advice on ethical data use, technical best practice, and the latest industry and international developments. The council will comprise experts from the community, business and research sectors, and organisations focusing on privacy advocacy.

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