Paul Shetler

Labor has called for an independent review of the $10 billion the government is spending on IT projects and the controversial first 18 months of Malcolm Turnbull’s pet project: the Digital Transformation Agency. This comes as the government turns to a former banking IT executive with long industry experience to head up this troubled agency. 

When the Coalition assumed office in 2013, then-shadow communications minister Malcolm Turnbull set about establishing what was then called the Digital Transformation Office (now the Digital Transformation Agency) to make government digital-first in terms of the public interacting with government services.

But a year after then-CEO Paul Shetler was recruited from the UK, the agency had little to show for its work, or the hundreds of millions of dollars invested. 

As Crikey has previously reported, the DTO under Shetler was a dysfunctional agency, with allegations of bullying. After a year, there were just six projects in the beta phase. Multiple sources at the time told Crikey that the decision by new Assistant Minister for Digital Transformation Angus Taylor to restructure the agency and move Shetler into the chief digital officer role was, in part, to manage him out of the organisation. The name change — from the Digital Transformation Office to the Digital Transformation Agency — was part of the restructure.

Since Crikey began reporting on this, more people who worked with the agency stepped forward and backed up the claims of dysfunction in the DTO. This came as Shetler himself began speaking about the difficulties of working with government agencies in delivering IT projects at the peak of media reporting on the Census controversy and Centrelink’s robo-debt notice complaints.

One former Department of Human Services officer who worked with the DTO told Crikey that the former management showed little interest in working with the agency on its projects. The source said Shetler was invited down to see the department’s projects five times but only turned up once. He was not involved with the automated debt-recovery system at all.

The source said the Human Services project DTO has claimed credit for — a new Medicare enrollment scheme for babies in Queensland — was in large part achieved by the department sending its best and brightest to be seconded to DTO, and that much of the achievements of the office in its first 12 months can be put down to the work of the officers in the other departments working in DTO. The Digital Transformation Agency confirmed to Crikey that since the beginning, DTO has had 176 secondees from other agencies.

“This includes staff who were brought in from other government agencies when the office was opened in July 2015. It also includes staff who were part of exemplar programs and so were still permanent employees of their home agency. Some secondees have since become DTA staff,” a spokesperson said.

There was a view within government that the management was not prepared for the sheer scale of the government IT sector in Australia, nor the need to liaise not only with the federal public service but also with state and local government counterparts. Shetler has blamed Taylor and the restructure on his decision to leave, but Crikey has seen an email sent to all staff in the agency by Shetler at the time of the change where he praised the restructure and told fellow staff that the shift would allow delivery on IT projects.

Labor’s spokesperson for the digital economy Ed Husic has called for an independent inquiry — rather than a Senate committee — to review the agency and IT spend in government above and beyond the review done by former Telstra CEO David Thodey into the agency (which has not been released publicly). Husic told Crikey the review would help rebuild confidence in government spending in IT. 

The review would also help feed into Labor’s own policy design for digital transformation policy in the lead-up to the next election, Husic said.

While Labor wants the whole saga reviewed, Taylor is more keen to put it all in the past. In a speech to the Australian Information Industry Association dinner last night — after returning from down south for the night on the annual Pollie Pedal — Taylor pointedly spoke of the great strides the digital transformation agency had made in the last six months since he took over responsibility in government and shifted the direction of the agency. He also made a point of stating he had been discussing the benefits of digital transformation among his fellow ministers, making it a key issue in government. Since the change, he said, DTA had been more influential with other government agencies.

“It’s an enormous credit to the DTA how quickly they have got on with the job, and how quickly their advice has been taken up across government.” 

DTA now has responsibility over government IT contracts, which formerly sat in the Department of Finance, and the government is now looking to break up some of the bigger IT projects into smaller projects as part of the government’s overall $9.5 billion spending on IT. Taylor said this was in contrast to Labor decreasing IT spending in government, but added that money can’t determine a good outcome alone.

“I don’t think money alone is the right metric for if you are doing the right job,” he said. “The key thing is for us to spend that money well. There will always be issues, but we are in a position to manage the risk better than in the past.”

Taylor announced former NAB banking executive Gavin Slater — who spent seven years at the bank leading its enormous IT transformation project — will be the new CEO of the DTA from the beginning of next month. Taylor said that Slater has “widespread digital transformation experience and has driven very significant business transformation in his career.”

“I’m very pleased we’ve attracted someone of his calibre.”

Husic endorsed Slater, but said the review would help expose some of the issues the new boss would face in the DTA.

“At this point the credentials look good. We will see how that is applied internally by Gavin and how that all works out. From our point of view, we want this to work because it is an important task to make the government run more efficiently [but] if there are some underlying problems that haven’t been teased out, that’s why we think an independent review is important.”