The man handpicked by Malcolm Turnbull to head the government’s digital transformation has said the error rate in Centrelink’s data-matching process is so unfathomably high that it would send a commercial enterprise out of business.

Paul Shetler, the former digital transformation office head, criticised the government’s response to its latest IT crisis, telling Guardian Australia it was symptomatic of a culture of blame aversion within the bureaucracy.

“It is literally blame aversion, it is not risk aversion,” Shetler said. “They’re trying to avoid the blame, and they’re trying to cast it wide.

“The justifications that have been given I think are just another example of the culture of ‘good news’, reporting only good news up through the bureaucracy.



“I’m sure that the bureaucracy was being told at every single level that everything was OK.

“That’s how it works in the bureaucracy. Bad news is not welcomed, and when bad news comes, they try to shift the blame.”

It is the first time Shetler, formerly the government’s chief digital officer and a former chief digital officer for the UK ministry of justice , has broken his silence on the series of IT failures that have plagued the government in recent months: the census debacle, the failure of the Australian Tax Office systems and now Centrelink’s debt recovery problems.

Shetler resigned in November after being hired by Turnbull to transform the government’s approach to digital technology.

He said it was difficult for him to watch successive IT failures, which he described as “cataclysmic” and “not a crisis of IT” but a “crisis of government”.

“I said when I came in that this would be happening, I said this was already happening, I said it was unacceptable and I made that case the entire time I was at the DTO [digital transformation office], and the DTA [digital transformation agency],” he said.

“I was very explicit about it internally, not nearly as much so externally. It was a fight that I fought from day one, not an easy fight to win, because you’ve got an entire bureaucracy of IT bureaucrats who are backed by large vendors, who have large numbers of staff, and because ministers, I’m going out on a limb here, very quickly become captive to the departments that they deal with.”



Shetler said the consequences of the failures of the Centrelink system were different from problems with the census or the ATO because they were felt by those least able to deal with it.

He said data-matching systems must have human oversight to deal with mistakes.

“The way they did it, obviously it’s dangerous, because their algorithms are flawed in the first place,” Shetler said.

“Secondly, you have to be careful with data. Much of the data that’s in the federal government, how good is it really? There is this sort of a blind faith in data.”



The government has continued to deny any problem with its automated compliance system, which relies on data-matching income reported to Centrelink with tax office records.

It confirmed it developed the data matching software in-house, rather than buying it from a private vendor.

The software has been used for data-matching operations for several years, raising questions about what the government knew of its potential flaws before using it for such high-volume debt recovery.

“As with all new software, rigorous testing has been carried out by the department to ensure the system is working as intended,” department general manager Hank Jongen, effectively head of communications, said.

The department said individuals were given ample opportunity to contest the discrepancies, and that 80% of those who received a letter had paid the money back.

Shetler said a 20% error rate would be unacceptable in any other industry.

“All I can say is, if they were a commercial company, you would go out of business, with a 20% failure rate, a known 20% failure rate, you would go out of business, any other kind of matching service would,” he said.

“Come on. Could you imagine the stock exchange doing that? Could you imagine Amazon, Apple or a bank doing that? An insurance company doing that?

“It’s just unfathomable, and yet government thinks it can do that.

“This is the real problem. Government needs to be less arrogant. You’ve got senior public servants there who are drawing private sector salaries, but they’re not holding themselves to the same standard.”

Shetler identified a series of problems that could be immediately addressed. He said it should start with building capability and upskilling across all areas of the public service.

A “radical” upgrade of IT skills was needed, he said, starting from the top levels of the public service. That would include ensuring only technically proficient executives were placed in senior IT leadership roles. Public servants should be increasingly placed in front of real users, so they can see the impacts of their decisions and systems on the ground.

Shetler said the current Centrelink situation had exposed a gap between government policy and service delivery. That divergence must be addressed, he said.

“Policy is not just something you dream up on a piece of paper,” he said. “It’s actually also the results that you see on the streets.”