Australian government planning massive health services shake-up: Report

The Australian Labor party has taken the federal government to task over reports that Medicare, pharmaceutical, and aged-care benefits could be delivered by the private sector.

The AU$50 billion-plus outsourcing would be the first time the private sector has delivered a national service subsidised by the government, The West Australian reported on Tuesday.

"When the Liberals start dabbling with Medicare, it means the cost of medicine gets more expensive for sick people," Opposition Leader Bill Shorten told reporters in Canberra.

The West Australian said planning is well advanced, with a view to making it a key feature of Treasurer Scott Morrison's first Budget in May.

The plan involves replacing back-office operations done by bureaucrats.

The private sector would administer claims and payments while overseeing eligibility criteria.

Australia Post, Eftpos providers, Telstra, and the big banks are showing interest, given they have online payment and supply structures.

Opposition human services spokesperson Doug Cameron fears the private health information of Australians could be kept by multinational companies overseas without the required security.

"This is another example of a government desperate to please its big-business backers," he told reporters.

"Big business funds the government's election campaign, and that is why they are going to hand over billions of dollars of work to the private sector."

Under the terms of the recently signed Trans-Pacific Partnership, signature nations will be unable to discriminate or force companies to store their data in local datacentres.

"TPP parties commit to ensuring free flow of the global information and data that drive the internet and the digital economy, subject to legitimate public policy objectives, such as personal information protection," the US TPP summary states.

"The 12 parties also agree not to require that TPP companies build datacentres to store data as a condition for operating in a TPP market, and, in addition, that source code of software is not required to be transferred or accessed."

The TPP will regulate trade between Australia, the United States, New Zealand, Canada, Singapore, Vietnam, Malaysia, Japan, Mexico, Peru, Brunei, and Chile.

Liberal Democrats Senator David Leyonhjelm said it makes no difference who delivers benefits, as long as they go to needy people.

"If we can trust our banking details to a private-sector institution, we can trust recipients of pensions and benefits with private organisations, as well," he said.

In October last year, newly minted Prime Minister Malcolm Turnbull dismissed concerns over the usage of his own private email server for government business by saying that people shouldn't assume government services are more secure than private ones.

The Department of Human Services had previously published a request for expressions of interest from technology companies to help design and begin construction of a new welfare payment system to replace the 30-year-old system the department has in place called Income Security Integrated System (ISIS).

As of June last year, ISIS is used to undertake 50 million transactions per day, and deliver payments to 7.3 million Australians, with Centrelink payments totalling over AU$100 billion annually.

"This is one of the largest social welfare business transformations undertaken worldwide; success will depend on establishing strong industry partnerships," Minister for Human Services Senator Marise Payne said at the time.

The Welfare Payment Infrastructure Transformation program is expected to take seven years to complete.

Earlier this week, the ABC reported that embattled Human Services Minister Stuart Robert laid the blame for an increase in Centrelink complaints at the feet of its IT systems.

"We're trying to deliver a 21st century offering to a well-educated, technically savvy Australian population -- but we're using 1980s IT," he said.

Until the upgrades are complete, Robert said he expects complaints to continue increasing.

With AAP