7 June 2023

Address to the Committee for Economic Development of Australia

I acknowledge the Wurundjeri Woi‑wurrung and Bunurong Boon Wurrung peoples of the Eastern Kulin as traditional custodians of the land we are meeting on, and pay my respects to their Elders past, present and emerging.

I want to thank Sharon for that introduction and thank CEDA for organising this event. And I should thank everyone here for your patience. We were originally supposed to do this event back in February, but diary clashes got in the way. I’m glad we’re able to do it now.

The upside of that is that I can talk freely about the strategy and details of our second Budget.

Dealing with the immediate challenges of cost of living while ensuring we put downward pressure on inflation. Focussing on the long‑term economic challenges – many of which are underlying causes of current inflation woes: Skills shortages, housing shortages, the sclerotic history of failed energy policy and the very real national security challenges we face in our region.

We have found a fine balance between the demands of the present and the challenges of the future, supporting the people who need it, not withstanding the enormous job of improving the state of the books and pushing down on inflation.

12 months ago, this year’s Budget was predicted to be $77.9 billion in deficit. We inherited a trillion dollars in debt, and billions of dollars of unfunded projects, left teetering on the edge of a funding cliff as a way to dress up the previous Government’s Budget problems.

Now, it’s $4 billion in surplus. We have banked 87% of the additional revenue that has come through across this Budget and the October Budget, and found $40 billion in savings. Zoom out from the immediate surplus, and the five‑year Budget position has improved by $125.9 billion.

As we put the Budget together, one of the big challenges in my portfolio was the state of the Consumer Data Right. It was not in good shape when we came into Government.

The promise of CDR is great. As a competition policy, it has the potential to drive a better deal for consumers across a range of good and services, and drive productivity growth across a number of industries.

If we make CDR work it can democratise consumer data and lower the barriers to entry and mobility for financial services and wealth creation, so that services that were inaccessible to many people can now be available in their pockets.

A legislative framework was established empowering the government to make rules establishing the safe protocols for the exchange of data at the direction of consumers. We started in banking but the rules were designed to scale out across the economy. As the Minister responsible, I have designated the energy sector.

Right now, you can use your CDR data to get a better deal on your credit card, find a cheaper mortgage, and understand your energy usage.

As a real life example of what CDR can do, Westpac is now activating their data recipient capability to verify borrowers’ income as part of their 10‑minute mortgage application. For consumers, this will be a safer way to share their data, and a more convenient way.

As a small business, you can view debts, fix late payments before they happen, and take advantage of scores of other conveniences and efficiencies.

There are major opportunities in all of these things. An extensive architecture has been built, designed to expand and scale out.

But when we took office, CDR faced two major problems.

It had a small amount of recurring funding allocated, not enough to maintain the parts of the system that are already in operation. Provision was not made for any improvement or expansion.

A project that the Liberals told us they believed in so much, and heralded as a pioneering economic reform, was left to dangle in the breeze.

An additional $88.8 million was allocated in the May Budget – without which CDR would have had no future.

The second major barrier was take up. It hadn’t yet caught on in the way that it was supposed to.

If I can be blunt: the Federal Government has already spent more than $200 million on this. This is a lot, but a fraction of what the designated industries have spent.

I’ve given careful consideration to findings and recommendations of the Statutory Review into CDR.

Elizabeth Kelly did a sterling job assessing the progress of CDR and suggesting a path forward, and I’ll be releasing our formal response later today. One recommendation in particular stands out:

The current pace of CDR rollout into new sectors has not allowed enough time for the system to mature and capitalise on the lessons learnt. Focussing on improving CDR functionality and data quality within already designated sectors should be prioritised, balanced with overall forward momentum into new sectors over time.

That analysis is spot on.

Before expanding CDR into multiple new industries, we need to support take up and deepen its place in the sectors where it is already operating.

So our focus over the next two years will be on:

  • improving data quality and deepening participation in the existing sectors: banking and energy;
  • cyber security improvements across all CDR agencies to reflect the evolving data landscape; and
  • expanding awareness of CDR as a data‑sharing model that allows consumers to easily identify CDR‑enabled providers, products and services.

We will pause the expansion of CDR into Superannuation, Insurance, and Telecommunications.

We will continue the implementation into non‑bank lending, but non‑bank lending will be the only expansion over the next two years.

There is Legislation before the Parliament to facilitate CDR action initiation. The Senate’s Economics Legislation Committee has observed that:

For the intended benefits of action initiation to be realised, extensive consultation and consideration, road mapping and a measured rollout of action initiation will be required.

We agree.

We want to do the work to get it right, to minimise the risks and maximise the benefits and to have clear use cases identified so that public and private investment can be properly assessed.

We will undertake a strategic assessment of at the end of 2024. Further developments and further expansions will be considered as part of that process, but not before.

There is one area that I particularly want to lean into.

Fighting scams and fraud is a priority for me and for the Government. We recently announced an $86.5 million anti‑Scams package, featuring a world‑leading new National Anti‑Scams Centre, and privacy and security have to be right at the centre of any work we do on CDR.

Clearly, screen scraping cuts against the principles behind that work, and so in the second half of this year we will consult on policy options to regulate screen scraping, including the role of the CDR as a safer alternative.

CDR is a safer alternative to screen scraping, and a defence against identity theft and other forms of financial fraud.

I am deliberately being direct here about when things will and won’t happen. The Statutory Review also recommended that:

The Government, with CDR agencies, should provide greater transparency on CDR consultation processes and a timeline that outlines expected future developments.

Affected sectors are entitled to know what is happening and when. They deserve clarity, so that they can plan for the future. That hasn’t always happened in the past.

Let me say this: I am determined that while I am the Minister, industry will know what is happening and will have time to plan for it. I hope the details I’ve just set out provide the clarity you need.

I’m sure there are people in this room and across the affected sectors who are happy with the approach we have taken, and others who aren’t.

We know there are stakeholders hanging out to implement new cross‑sector use cases, and others in the existing sectors who want more time to develop offerings that utilise the CDR.

The Fintech industry has particularly embraced CDR, opening up new ways of approaching legacy lending and banking activity in general. This month’s ‘CDR Month’, run by peak industry bodies FDATA, FinTech 7

Australia and the Australian Information Industry Association is an expression of that enthusiasm and eagerness to latch onto the opportunities that CDR can create.

We have found a balance between investing enough to keep the CDR growing and being responsible with the Budget. We have put things in place to support further take up, without galloping ahead before that take up can be seen.

We don’t need to be convinced of the potential benefits of CDR, for competition, for innovation and for the adoption of new technologies, business ideas and partnerships.

We do need them to become real.

The investment we’ve made in this Budget, and the steps we have set out for the next two years, gives the system and the industry a chance to make it happen.

Thank you all very much.