Epidermologist Fiona Stanley, AC. Its information technology network - built from a number of previously separate networks - is the biggest in the southern hemisphere: five times the size of the Commonwealth Bank's. It costs $1 billion a year to run and processes 200 million payments each year, recording each one on a computer system that already holds 3 million gigabytes. It has twice as much again stored on magnetic tape. The department has always linked its data to the maximum extent permitted by the law, gaining what some might see as a disturbingly complete picture of our activities. But until now it has done it mainly in order to fight fraud. What it has hardly ever done is to use the data to make its services more effective, or as the minister puts it, to ''make Australia work better''. At a time when the ''evidence-based policy'' has become a set-up line for jokes, Senator Carr uses the phrase proudly even though he knows it exposes him to ridicule. ''Every politician loves evidence-based policy,'' he says. ''Actually for some it's as useful as lamp-posts for drunkards - good for support, not illumination. I am told we have called for it, or claimed to have had it, on more than 1800 occasions in the Parliament this year.

''But if you start from the premise that you are serious about evidence-based policies you realise you can actually develop them by using the data you've already got. ''We know where people live, we know when they've worked and how they've responded to major shocks. We know what illnesses they have suffered, and how they were treated. We can follow a family's journey right down the generations.'' Carr wants to make the department's information available to researchers who can identify patterns in people's lives. ''I want to open up that information to researchers who can find patterns. For example I would like to know what type of medical admissions take place ahead of applications for child support. If we knew that, we would know where to best direct resources before they were needed.'' Predicting what's needed before it is needed is one of the mainstays of science fiction. In Douglas Adams' novel The Hitchhiker's Guide to the Galaxy elevators can see far enough into the future to arrive at floors before potential passengers realise they need them. But Carr has something grander in mind for what he calls ''big data'' - it's more Minority Report -the science fiction short story by Philip K. Dick - where the authorities can use glimpses of the future to stop crimes from being committed.

''Let's not pretend that there isn't entrenched poverty in this country. Let's not pretend that some people's postcodes don't predetermine their life chances,'' he says in his Parliament House office. ''I want to find the mechanisms to even up those chances. It's what the social security system is supposed to be all about.'' On the other side of the country in Perth Fiona Stanley has been working with an unusually co-operative state government for 35 years to gain glimpses of the future. She has been given access to birth, health and educational records - all linked in a way that enables her to build a complete picture of someone's life that isn't allowed in other states. She reckons she's just discovered a disturbing answer to one of the senator's questions, although she wishes she had been able to do it with national data and with data sitting on Senator Carr's pharmaceutical benefits computers. She says children born disabled are much more likely than other children to be subsequently [physically] abused. ''Knowing that, or knowing anything like that, means we can direct resources where they are likely to be needed rather than directing them at random,'' she says. Carr employs one quarter of the Commonwealth public service. He runs a Centrelink office, a Medicare office or an agent in every Australian town. He concedes that until now his department and its predecessor have been seen as payments organisations - it now shifts two-fifths of the Commonwealth's budget.

But a lot of the payments work is being automated (he calls web-based delivery ''home delivery''). Technology is both freeing up staff and making data even easier to collect. ''I want the department to deliver more personalised services,'' he says. ''We deal with people who are homeless, people who are sick, people who are students, people who are thinking about retiring. We are the first boots on the ground with the army after a natural disaster. We help people clean up their circumstances. We offer financial counselling, although I'm not allowed to call it that. ''It's a wrap-around service, but I want it targeted where it is needed. To find that out I am going to open our data to researchers.'' Until now they've been locked out. Stanley and her colleagues at the paediatrics and child health unit at the University of Western Australia used to get occasional access to Pharmaceutical Benefits records until the Commonwealth cut it off with what she says was no explanation. Carr has swiftly approved data requests from RMIT University, the Australian National University and the University of Queensland. He has also inherited an earlier program (set up by himself as research minister) in which the CSIRO mines data in Centrelink records.

Last month, he invited researchers from five universities to Canberra to meet officials from his department and the CSIRO to toss around ideas. Stanley's paper was entitled ''Lessons from Western Australia: You can do it and the sky won't fall''. ''In 35 years of doing this in Western Australia we have never once had a privacy breach,'' she says. ''We are given anonymised data - it is linked so we can join together health records, birth records, postcodes and the like but it can't be used to identify individuals. We're not interested in that anyway.'' Richard Denniss, executive director of the Australia Institute, says he understands privacy concerns, but says they are outweighed by the good that is likely to come from ''joining up'' data. ''Sure, privacy is a concern, but the data can be anonymised and you can have sanctions for researchers who try to unpack it. At the moment your bank probably knows an awful lot about you - how much you earn, how you spend your money, when you get fired, when you get divorced, when your loved one dies, whether you pay child support. That data is in no way anonymised. Your bank is free to mine it for any commercial purpose it can dream of.

''Anyone concerned about privacy would be better off directing those concerns at what profit-seeking corporations can do rather than ways in which researchers can use government data to improve public policy.'' Half a century ago, the morning sickness drug thalidomide was removed from the shelves after thousands of mothers gave birth to disabled and deformed children. Stanley says if researchers then had had access to real-time prescription and birth data they would have identified the connection sooner. What really disturbs her is that they still don't have access to that data today. ''The whole reason we set up birth defects registries across Australia was to pick up the next thalidomide,'' she says. ''But until now we haven't been able to link those registries to the Pharmaceutical Benefits Scheme. It's insane,'' she says. The anti-arthritis drug Vioxx was withdrawn in 2007 after some users died of heart attacks over several years. Stanley is certain that access to Pharmaceutical Benefits prescription data and Medicare data would have allowed researchers to spot the link sooner. ''Heart attacks are quite common, so it was hard to see the link. You need data from 100 per cent of the population. Surveys aren't very good. They are always biased by the people who choose not to participate. And you never know the extent to which they are biased.''

Stanley and her colleagues in Western Australia have drawn disturbing conclusions about the relative effectiveness of schooling in educating children, conclusions they could not have been able to draw without linking the state's birth, health and education records. ''Parental factors are far more powerful than anything in the school system,'' she says. ''Children who are born underweight because their mothers smoke or drink in pregnancy or fail to eat well or have sexually transmitted disease when pregnant, are likely to have poor education outcomes regardless of the quality of their schooling. Birthweight matters. Resources directed there can make a bigger difference than extra resources directed at schools.'' Stopping health problems and poverty before they get started is Carr's holy grail. It makes him part health minister, part minister for social inclusion. Indeed, he sees his role as improving people's lives. Peter Martin is economics correspondent.