Adam Triggs, Dan Andrews | Data-privacy trade-off is overblown after Optus, Medibank breaches

The trade-off between data and privacy is overstated. Its risks are easily managed when data governance is taken seriously.

Restricting data, on the other hand, entails real costs.

These costs are rarely acknowledged by privacy advocates. And it's no wonder: they are not the ones bearing the cost. It's the most vulnerable in our community that suffer. And it makes progressive government programs more expensive.

This was highlighted by the pandemic. One of the six recommendations of the independent review into Australia's response to COVID-19 was to modernise how governments use data.

Almost every part of the community consulted as part of the review identified inadequate data and inadequate ability to analyse it as a key reason why their community suffered more than others.

Besides policymakers, people with disabilities, people from culturally and linguistically diverse backgrounds, First Nations Australians and the LGBTIQ+ community all put data at the top of their list of lessons to learn from COVID-19.

The problems with data in Australia are that we don't have enough of it, it's not granular enough, it's not sufficiently linked to other data, and the data we do have can't be accessed by the people who need it.

With more data, we could have better identified people at-risk and monitored their welfare during the pandemic. We could have improved government communication by making it more targeted and more appropriate. We could have saved lives.

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With more granular data, we could have dramatically improved the speed and accuracy of contact tracing and testing. We could have made most lockdowns and border and school closures unnecessary. We could have mapped and monitored the challenges in supply chains before they emerged.

With more linked data, we could have better targeted support to those who needed it. We could have better targeted government supports to the businesses and households that needed it and known when to withdraw supports to avoid inflation, over payments and zombie firms - the unproductive firms that would normally die but are kept alive by government supports.

Make no mistake, investing $100 million in data integration policy today in return for a swifter exit from wage subsidy schemes and lockdowns during the next pandemic will save tens of billions of dollars.

And if there's one thing for sure, there will be a next time. And when the next crisis comes, the era of free money will be long gone. But what about privacy? Should these concerns be ignored? No. We are thinking about it the wrong way around.

The notion of a trade-off between data and privacy is overblown. The Australian Bureau of Statistics' "five safes" protocol uses safe people, safe projects, safe settings, safe data and safe output to manage risks without killing the golden goose.

It's a framework that allows us to reap the benefits of data while protecting privacy.

The reason we are seeing high-profile data leaks is not because data is dangerous. It's because we are not taking these safety protocols seriously. Weak corporate governance is to blame, not data.

So, what can we do to improve the data environment in Australia?

The Australian government should amend the Data Availability and Transparency (DAT) Act 2022 to allow accredited private researchers to participate in the DAT Scheme.

It should permanently amend the Tax Administration Act 1953 to ensure that federal Treasury has continued access to de-identified microdata for policy purposes so that it can better design and better target policies.

Governments should encourage the sharing and linking of de-identified data between federal, state and territory governments by reforming the Intergovernmental Agreement on Data Sharing.

We should fast-track the development of interoperability frameworks for de-identified and anonymised health data so we don't hit the same obstacles we faced during COVID-19. But data without capabilities won't solve the problem.

Governments should create elite data-led teams to build capabilities to better understand challenges that cut across health, economic and social policy space. This will break down policy silos and ensure that a broad range of expertise is reflected into pandemic policy decision-making.

All of this should be undertaken in close consultation between the National Data Commissioner and the Privacy Commissioner, to ensure that confidential personal data is carefully protected. Data is not just about dealing with crises. In peacetime, more data creates more businesses. It helps consumers to find the best deals.

It boosts competition by preventing a handful of firms from exploiting their access to data that other firms cannot use. And it's key to building a more productive economy. The 2010s were a disaster for productivity growth - the driver of long-run living standards - which grew at its slowest rate in more than a century. If you care about the living standards of the next generation, this should keep you up at night.

But the silver lining was that big data analysis helped to diagnose the problem. It revealed that declining dynamism - less firm entry, job switching and competition - has conspired against productivity and wage growth in Australia.

The policy challenge remains to inject greater dynamism into Australian markets.

Data will be vital to turning this around and creating the necessary transparency to hold governments to account in the structural policy domain.

A lack of data doesn't make you safer. It just makes you blind to what's happening.