Assessing the benefits of accelerated digital delivery of government services

Successful design and execution of digital services is critical to accelerating adoption

Australians increasingly want digital services, however digital delivery lags citizen expectations.

Most citizens (90%) now prefer to interact with government through digital channels. This preference has strengthened since 2017, when only about 60% of citizens preferred digital. Growing demand for online government services reflects broader shifts in the way we live over the past decade:

• 94% of citizens now use mobile phones to go online, compared to 84% in 2017.
• Online shopping now represents 11% of retail trade, compared to less than 5% in 2017.
• The volume of digital banking transactions has increased by 26% over the last three years, while the volume of in-person banking transactions has declined by 46%.

The COVID-19 pandemic has only accelerated citizens’ demand for efficient digital services. However, citizens are not adopting government digital services as fast as they would like, with only 79% of government interactions occurring online.

There are four attributes that drive faster digital adoption:

• Efficiency: It is quick and easy for users to interact with government.
• Accessibility: Services are available in multiple languages and are easy for all citizens to understand.
• Reliability: Services work well on all devices, even when there is high user demand.
• Security: Digital infrastructure is designed to protect privacy and improve cyber resilience.

Services with these attributes experience greater adoption, with NSW seeing twice as many online visits per citizen as the federal government

New South Wales government services are accessible and navigable

Service NSW’s digital channels are available in over 68 languages. This ensures that government services are accessible to the more than 400,000 people in NSW (5% of the population) with low English proficiency. It is also navigable and efficient, consolidating 340 services from 70 agencies into a single front door of government to make services easy to navigate.

Accelerating digital adoption generates savings for governments and improves outcomes for all citizens

The federal government faces two future pathways:

• Delayed adoption, where digital service delivery continues along its current trajectory.
• Accelerated adoption, where the government ensures its digital services are efficient, accessible, reliable and secure; thus encouraging adoption.

Benefits to government of accelerated adoption:

• Decreased cost of providing services: $12 billion saved over 10 years
• Improved cyber resilience: $3 billion saved over 10 years
• Better compliance: $2.6 billion saved over 10 years

Benefits to citizens of accelerated adoption:

• Saved time and effort: 800 million hours ($19 billion) saved over 10 years
• Increased citizen satisfaction: 10 percentage point increase in the proportion of satisfied citizens
• Greater accountability: 4 index point increase in the Digital Social Equity Index
• Improved trust in government: 14 percentage point increase in citizen confidence in government

How we estimate the benefits of accelerated digital adoption

To estimate the benefits of accelerated adoption, we model future adoption paths for myGov based on historical adoption data. Drawing upon literature on technology adoption, myGov’s adoption path follows an S-shaped curve as the adoption level increases from 0.0 (no adoption) to 1.0 (saturation).

The current myGov adoption level is 0.57. From 2024, we model two future myGov adoption paths:

• Delayed adoption, where the development of digital government services continues along its current path.
• Accelerated adoption, where the government invests in transforming myGov into a leading central government portal which exhibits best practice attributes. This drives faster myGov adoption. The accelerated adoption path is calculated based on the adoption paths of best practice services like Service NSW and Gov.uk.

The cost and time saving benefits of accelerated adoption compared to delayed adoption are largely driven by the higher myGov adoption levels (and a higher number of transactions) under the accelerated adoption scenario.

Accelerating the digital adoption of services has significant benefits for both governments and citizens, including cost and time savings. Delivering world-class digital government services and accelerating adoption means that these benefits are realised sooner, allowing governments and citizens to enjoy these benefits for longer.

Modelled cost and time savings are largely driven by
the 60 million additional transactions that shift from traditional to digital channels under accelerated adoption

Accelerated digital adoption means that all Australians will have access to quality digital services, regardless of their needs or choice of service channel.

Accelerated adoption means that an additional 60 million
transactions take place through efficient and user-centric digital channels rather than traditional channels. Many citizens benefit from the convenience and accessibility of these digital services.

Vulnerable citizens, including the 2.5 million Australians who are considered ‘highly digitally excluded’ will not be left behind under accelerated adoption. Under this scenario, citizens continue to access 60 million in-person, phone and postal transactions. Further, accelerated digital adoption frees up resources which could be reinvested to improve the quality of in-person, phone and postal services. Cost savings from digital adoption could facilitate the equivalent of 70 million additional traditional-channel transactions.

Accelerating adoption could reduce delivery costs by $12 billion over 10 years, which could be redirected to support citizens with complex needs

The government will deliver over 15 billion transactions over the next decade. Even small savings in per transaction costs can drive large savings for the government. Yet the differences in the cost of delivery between traditional and digital channels is significant – compared to digital, phone transactions cost over 15 times as much, and in-person transactions cost over 40 times as much.

Many simple services are currently delivered through traditional channels because there is no user-friendly digital option. By accelerating digital adoption, the government can deliver 60 million additional services per year through digital rather than traditional channels, realising a saving of $12 billion over 10 years. This saving could be redirected towards supporting citizens with high-touch needs by facilitating the equivalent of 70 million additional traditional transactions.

There are additional financial benefits to government that have not been quantified here. By bringing together over 3,000 government websites into a common digital architecture, the government also realises greater efficiencies through reduced duplication, lower administrative costs and errors, and fewer password resets.

Accelerated digital adoption benefits both users of digital services and people who require in-person or phone services

Achieving best practice digital service delivery could reduce the cost of government cyberattacks by $3 billion over 10 years

In 2022-23, the federal government reported over 300 cyber incidents, with each incident costing the government $4 million on average. Government systems are particularly attractive targets for cyberattacks due to the highly sensitive nature of the information they hold, including taxation data and health records.

Organisations that invest more in digital government services and apply the best cybersecurity practices experience fewer, and less severe, cybersecurity breaches. For example, reducing system complexity reduces the cost of cyber breaches by 9%.

Best practice governments improve digital adoption by investing in digital security. They do this by eliminating duplicated systems and investing in security technologies such as AI, encryption and advanced data security software. For example, Estonia uses distributed data management software which eliminates data duplication and improves security by requiring a cyber attacker to penetrate seven digital environments simultaneously.

Accelerated digital adoption could improve citizen compliance rates, saving the government $26 billion over 10 years

Across the Australian Taxation Office, Medicare and Centrelink, citizen compliance issues cost the government over $30 billion per year in direct costs, plus additional administrative and compliance costs.

By offering high-quality digital services, the government can improve citizen compliance rates by enabling people to more easily and accurately provide information. Governments that pre-fill forms with accurate information can increase compliance rates by up to 15 percentage points. They can also improve compliance by minimising the number of forms for citizens to complete, by applying ‘tell us once’ practices and by facilitating efficient and accurate data sharing between agencies.

The accelerated digitisation of government services has the potential to significantly reduce the costs associated with noncompliance. For example, while pre-filling is available for some parts of individual tax returns, over 15% are lodged late. In Estonia, where citizens can lodge tax returns with a single click, only 5% are lodged late. The Estonian tax authority is also able to collected a greater proportion of expected revenues (see the case study on page 18).

Estonia’s world-leading digital government infrastructure makes tax compliance easy

Estonians can file their income tax declarations in just 3 minutes.

Estonia’s e-tax system allows citizens to easily complete their annual personal income tax declarations by accurately pre-filling almost all necessary data from third-party sources. Not only does Estonia’s etax system pre-fill income information, it also pre-fills most expense information including training and mortgage costs. Most citizens can simply approve the calculated result with a single click.

This has allowed Estonia to achieve a high rate of citizen compliance, with:

• A 6% personal income tax gap, 3 percentage points lower than in Australia.
• 95% of income tax declarations submitted on time, 10 percentage points higher than Australia.

Accelerating adoption could save Australians 800 million hours ($19 billion) over 10 years in time spent engaging with government services

Accelerated digital adoption will save citizens 800 million hours over 10 years. This saved citizen time is worth $19 billion to the Australian economy.

By 2034, accelerated adoption will enable 60 million transactions per year to transition from traditional to time-efficient digital channels. This channel shift saves citizens 650 million hours over 10 years, before accounting for any efficiency enhancements to digital services. It also frees up capacity for more complex transactions to be served in-person or via phone or post. On average, citizens spend:

• 3 minutes per digital transaction
• 15 minutes per phone transaction
• 30 minutes per postal transaction
• 60 minutes per in-person transaction, including travel time

Citizens also save 150 million hours over 10 years with the introduction of best practice features to digital services. These features include pre-filling forms, further consolidating government websites and ensuring that webpages are easy to navigate.

By accelerating adoption, citizens could enjoy 10 ppt greater satisfaction, 4 index points higher accessibility and 14 ppt higher trust in government

Canada has invested in site consistency and site performance, improving citizen trust Canada.ca is a fast and reliable digital ‘front door’ to over 70 government services.

Canada.ca consolidates over 70 government services, each with a consistent design and pattern of interaction, to make it easy for users to find what they need. Service Canada has recently uplifted Canada.ca’s site performance – in 2020, it improved site speed by 55% and ensured that the website could support billions of visits with 100% uptime.

Canada.ca now enjoys a high level of citizen satisfaction and trust with:

• An 85% satisfaction rate, one of the highest digital government satisfaction rates in the world.
• 80% of visitors trusting Canada.ca to be a reliable and authoritative source of information.

This can be achieved by applying best practice finance, delivery, and governance approaches

Leading digital governments follow three best practice principles for governance, finance and delivery, catalysed by strong policy priorities

Best practice governments have used different combinations of governance, finance and delivery models to accelerate digital adoption

Best practice principles have been challenging to adopt, leading to poor outcomes for citizens

To accelerate digital adoption, the federal government should start by setting a clear policy priority to deliver world-class digital government services

Read the full report including case studies of best practice digital services and methodology here.