Fix the ABS, don't merge ABS and AIHW

Last year we ran pieces by Brian Howe and Richard Madden on the proposed changes to the Australian Institute of Health and Welfare. Below, Richard provides further insight into the challenges facing government statistical agencies in response to a piece in the Sydney Morning Herald. Richard is a Professor at the University of Sydney and has been Director of AIHW and previously Deputy Australian Statistician

The Australian Statistician, David Kalisch, is quoted (SMH 13 February) as saying a merger of the Australian Bureau of Statistics and the Australian Institute of Health and Welfare is a ‘live issue’ before the Government. David’s appointment as Statistician from the AIHW is a great move, and an opportunity for a fresh approach to the ABS’s traditional approach to its crucial role in Australian life. ABS has a well deserved reputation for quality and independence in Australia and internationally, and must be resourced well. Kalisch’s experience across Government suits him well to face the challenges now confronting the ABS, and to build a more outward looking organisation.

But merging ABS and AIHW is not the place to start.

The 2014 Budget proposed a merging of several health portfolio agencies. That proposal endangers the excellent community services and housing information work now undertaken by AIHW. But AIHW does have a lot in common with the National Health Performance Authority, and bringing them together makes a lot of sense and would free up resources. The more ambitious Budget proposal has yet to be justified by the Government, and the Commission of Audit did not provide any convincing arguments for the proposal.

Merging AIHW and ABS would be a much more ambitious step than merging health agencies.

AIHW has a customer oriented approach to health, community services and housing statistics. Leading customers are the Commonwealth, State and Territory agencies in the fields, which work closely with AIHW to determine the information needed for policy development. AIHW also has a range of community inputs, including through its Board, to ensure a broad based information agenda.

AIHW was established in 1987 because the ABS did not meet these information needs. It had dropped the collection of hospital and other administrative statistics, and retained only vital statistics and its valuable survey program. Since then, it has not adopted a customer focus like AIHW: the poor state of national education and justice statistics contrast dramatically with health, community services and housing.

Kalisch points out the technical gaps in the ABS today. These need urgent attention, and substantial resources, and will absorb all the leadership and management effort that Kalisch can muster for much of his term. As important, the ABS needs to demonstrate an outward looking focus equivalent to AIHW before there is any thought of merging the two entities. It could start in the under served fields like education and justice. It needs to establish essential machinery such as an Ethics Committee to allow the responsible release of identifiable data to researchers, something the AIHW has been doing routinely but is prohibited in the ABS.

As well, ABS governance needs to be reviewed: AIHW is governed by a Board whereas the ABS has only an advisory council; and the ABS needs to be moved from the Treasurer’s portfolio (an unusual location internationally for the national statistics office) to Prime Minister and Cabinet or else a ‘neutral’ portfolio to ensure a proper balance between the competing information needs of each government policy area. It is 40 years since the Crisp review of the ABS, and a more thorough governance review may be timely.

In the meantime, the AIHW and National Health Performance Authority overlaps must be addressed. At the same time, technical cooperation between ABS and AIHW can be increased. Before Kalisch’s five year term is up, bringing the ABS and AIHW together may be possible. For now, the ABS needs to be renewed and strengthened, and to build and demonstrate its customer focus.

AIHW is too valuable to be used as a potential Trojan Horse inside the ABS.