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Harnessing the Consumer Data Right to provide a $16.7 billion boost to Australia’s economic future

11 MARCH 2024: The Australian economy would be $16.7 billion larger by 2043 if the Consumer Data Right (CDR) expands beyond banking and energy sectors. Further, approximately 46,800 additional jobs can be expected from the combined effect of greater competition and innovation by enabling cross-sector data sharing.

The findings are contained in a new report from Deloitte - Consumer Data Revolution: Empowering Australia’s Future - which lays out an alternate path forward for the CDR to reach its aims and maximise consumer and economic benefit. This report was produced with the support of the Commonwealth Bank of Australia.

Deloitte Access Economics Partner, John O’Mahony says: “Imagine a world where you no longer need to repeatedly input identical information across various businesses, where processes are streamlined and consumer effort is reduced. The benefits could include improved social and health outcomes for consumers, while also enabling better informed decisions for complex life events and issues.

“Design principles for the next phase of CDR’s evolution should include speed, value and trust as well as being grounded in consumer life objectives and events and increasing incentives for business.”

Australia’s Consumer Data Right (CDR) is a legislative framework aimed at giving consumers more control over their personal data. What many people don’t realise is the size of the data footprint they leave in the economy, estimated at close to 48,000 petabytes in 2023. This is equivalent to every Australian taking and storing around 2,670 photos each day for a year on their phones.

Consumer data is regularly shared between some businesses but mostly not within the CDR framework. The roll out of CDR was planned as a phased process, with the framework applied to different sectors of the Australian economy over time starting with the banking sector in July 2019, followed by the energy sector in October 2022.

To date, the CDR has had mixed success with low consumer adoption, slow expansion and limited business innovation. As a result, the government has paused its expansion to other sectors, instead focusing on improving data quality, deepening participation in existing sectors, strengthening cybersecurity and improving awareness.

“The CDR’s impact could be far reaching. Cross-sector data sharing is key to produce economic and societal benefits for Australia, through greater competition and innovation, stimulating an uplift in business productivity”, Mr O’Mahony says.

“Banking and energy account for only 4% of total consumer data in Australia, which indicates there’s potentially more value to be captured by expanding the CDR, rather than deepening scope in banking and energy.

“Our data holding analysis shows software and information service businesses in the technology sector hold the most volume of data, around 59% of total consumer data stored in Australia each year. Public administration and safety sectors, including federal, state and local government and agencies, also capture some of the widest variety of consumer data types and are leading primary sources.”

Former Productivity Commission Chairman, Peter Harris says: “The CDR is an initiative in data innovation to give consumers the opportunity to take control by allowing their data - already held by a business - to transfer, safely, to another business in return for a savings or better service, a better deal overall. We have very few opportunities in the digital economy for innovation driven by the consumers. The slow roll-out of this Right to multiple sectors is a cost to consumers, and to competition. Getting it right would boost productivity across the economy.”