Australian DTA Tells Senate There is Better Technology Than Blockchain

Updated: 22 July 2023

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Australia’s Digital Transformation Agency (DTA) has told the Senate that there is better technology for every use of blockchain considered today.

The agency received AU$700,000 from the Australian 2018-19 Budget to explore blockchain for efficient government services purposes.

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In May, the DTA was sent on a mission to look for use cases across the Commonwealth with an initial focus on the welfare payment delivery system. The ultimate goal is to conduct user research with a view to having a prototype by the end of 2019.

At the Senate hearing, Peter Alexander, DTA’s chief digital officer, recognized great potential in distributed ledger technologies but said they’re not ripe yet, ZDNet reported.

“Blockchain is an interesting technology that would well worth being observed but without standardization and a lot of work to come — for every use of blockchain you would consider today, there is a better technology — alternate databases, secure connections, standardized API engagement,” he said.

The Australian government is exploring use cases for blockchain in a number of divisions with DTA’s help. The Department of Home Affairs is studying the technology on freight monitoring and the use of smart contracts for duties and tariffs.

The Treasury Department, including the Australia Taxation Office (ATO) and the Australia Securities and Investments Commission (ASIC) are exploring settlements and payments with blockchain. IP Australia is conducting a trial to handle food provenance.

Alexander told the Senate how the welfare payment delivery system would work using blockchain. The prototype is expected to be ready by the end of next financial year.

“When someone might receive a welfare payment or a balance … where someone would be allocated a certain amount of money, and be able to access that for various purposes — used for some purposes, not used for others — the smart contract, the programmable currency, can release that fund for a particular purchase, and say no for another without having an intervention,” he added.

The DTA is set to begin rolling out digital identity pilots, which will allow acquiring government-issued digital identities and a Tax File Number online. The program is designed to reduce month-long analog processes to 30-minute digital tasks and make it easier for end users to deal with public affairs.

DTA’s chief digital officer said the Australian government is as advanced in blockchain maturity as other progressive governments and added that vendors are the ones creating the hype.

“I think it would be fair to say a lot of big vendors, and technology vendors, are pushing blockchain very hard, they see sales opportunity in it. So internationally, most of the hype around it is from vendors and companies, not from governments, or users and deliverers of services who are saying ‘blockchain is the solution to our problem.’”

Non-corporate Commonwealth entities spent a total of AU$1.2 billion on IT and digital initiatives in 2017-18, according to the DTA’s annual report.