Australian govt considers services merger for IT savings

Social Services Minister Kevin Andrews is considering merging the Department of Social Services and the Department of Human Services to cut costs and save on IT spending, in a move that would create the largest agency within the federal government.

The Australian reported today that Andrews has floated the idea of Social Services — which currently looks after housing support, families, seniors, and multicultural affairs — absorbing the Department of Human Services, the department responsible for the delivery of welfare services through Centrelink, Medicare, and the Child Support Agency.

"There is obviously an option to bring those two [departments] together," he told The Australian. "It depends on whether the Commonwealth wants to have just one department, which is service delivery, or do you say, 'Look, frankly, you could save a huge amount, particularly in the back office, by having one system rather than two, one set of corporate people within the department rather than two'."

The move is being considered as part of the government's national commission of audit ahead of the Coalition government's first Budget in May.

Andrews told the ABC this morning that the merger would potentially lead to significant savings for IT for the two departments.

"At the moment, the Social Services Department and the Human Services Department are both within my portfolio, [and] there are certain things which could be brought together. There would be savings in terms of computers and IT systems, and back of office functions," he told the ABC.

"Any prudent government would consider the options."

Andrews declined to say whether the merger would result in job losses for the two departments.

"This is not about redundancies. This is about how we have the most efficient and effective form of government," he said.

"We also know that over time, we need to continue to improve and upgrade IT systems, so we need to consider the options."

A spokesperson for Andrews told ZDNet that the merger proposal is "just an option at this stage", and has not been costed.

The merger would not be the first for the Department of Human Services, which was first formed at the end of 2009, with the former Labor government combining Centrelink, Medicare, and the Child Support Agency into the one department.

The department was initially given AU$530 million in 2011 over four years to merge the IT infrastructure of the three agencies into the department under then-CIO John Wadeson. The merger was expected to save the government AU$106.8 million over four years.

When new CIO Gary Sterrenberg took over in 2012, he told ZDNet that given the department's experience in assimilating various agencies, it would be in a good position to take on any additional agencies the government wished to add to the Department of Human Services.

"What we've created by the integration of the agencies is set up, almost like the business term would be, a mergers and acquisition capability to [integrate other agencies]," he said at the time.