All Cost, No Known Benefit

The following FOI request was filed with the NSW Treasury on August 16, 2021: “I seek a copy of the cost-benefit analysis undertaken to justify the current lockdowns (i.e. those stay-at-home and other orders and restrictions imposed by the Premier on 26/6/2021).” This seemed an entirely reasonable query, as the NSW government’s  Guide to Cost-Benefit Analysis (CBA) explains how “a  CBA  should  be  completed  and  submitted  to  Treasury  where the  following  thresholds are (sic)  met: Capital  expenditure  with  an  estimated  total  cost  of  $10  million or  more.” As the estimated cost of NSW’s lockdown ( June 26 – November 1), according to the Sydney Morning Herald, ran to “about $1 billion a week”, my curiosity suggested the required and requested document should make interesting reading

The state’s Treasury bureaucrats were unusually attentive, responding as below a mere five weeks later (emphasis added):

“Work was commenced to more holistically capture the costs  and benefits of various approaches to lockdowns while analysis  was done on potential paths out of lockdowns as part of work that Treasury was doing to  help inform the roadmap out of restrictions. However, this work was never completed.

Moreover, the extent to  which this was commenced, its  intended audience was for Cabinet. No full cost  benefit analysis was  completed to justify the  lockdown which commenced  in July.  And that any work by Treasury that was  completed regarding the lockdown  was for Cabinet.”

Justification for government expenditure these days is an area that does not seem to get the media attention and pressure it deserves, so why should our betters in government, bureaucracy and the press bother to lay out complicated matters of public policy? True, there are one or two expenditure review committees — Senate Estimates for starters —  that sometimes bring to light stunning cost blowouts (think submarines in the federal sphere or, at a state level, the ongoing debacle of the Victorian Labor government’s efforts to put a tunnel under the Yarra). Institutionalised profligacy also gets an airing from time to time. Here, think Australia Council largesse, any ARC research grants to do with ‘whiteness’, ‘patriarchy’ and whatever else happens to be fashionable with the academic Left at any given moment, and, of course, everything to do with the ABC). But speaking as a general rule the political class at all levels is typically able to cut ribbons and make their ‘motherhood speeches’ without copping too much grief from reporters, who as a group seem a good deal less curious that once was the case.

As noted above, NSW’s official and weighty Guide to Cost Benefit Analysis recommends such an analysis be completed when government expenditure exceeds $10 million. The NSW government thinks so highly of the process that there are even specialised CBA guidelines for Transport, Coastal management options,  government advertising, Department of Communities and Justice, water programs and health capital projects.   CBAs supposedly outline in excruciating detail the inputs on both sides of the ledger, allowing those who underwrite government with their taxes to be confident that thought and probity have gone into the spending 0f public money. CBAs, however, were never a guarantee  the outcome would live up to expectations and predictions. Indeed, in some cases, the CBA is but a political smoke screen, the whole thing replaced a few years down the track by a fresh analysis that recommends a completely different approach to the same problem, this always depending on the slant and peculiarities of the government at the time. But at least the existence of a CBA showed us the government had followed due process and invested some thought about a project or undertaking before the public purse was opened and dollars flowed forth. The general impression to be gleaned from the official emphasis on cost-benefit appraisals is that government agencies spend considerable time and effort diligently comparing various options, looking at pluses and minuses in excruciating detail before providing well considered recommendations for politicians to announce.

To this end, CBAs come complete with lengthy analysis, mind-numbing numerical models, flow charts, pie charts, stakeholder engagement summaries, public comments for and against, plus the now inevitable gender- and indigenous-inspired statements of worth and impact. There is a barrage of information and data that help to justify and underpin things such as new transport corridors, tunnels and bridges, public hospitals, new schools and regional sporting facilities (sometimes, mind you, it helps to be the back-door boyfriend of a lovelorn premier). CBAs can and have provided the rationales for everything from embracing net zero carbon emissions, subsidised electric cars, the banning of cheap, off-patent light bulbs, land buy-backs to Murray Darling water allocations and the closure of national park walking trails. They tell us to buy French subs, and then, not too much later, they insist British or American submarines are the shot.

So how much thought, how much due diligence, how much bureaucratic blood, sweat and overtime was poured into providing a well thought out CBA for the recent Sydney lockdown? At a billion dollars a week, you’d think there would be some documented justification for it, which is why I sent off my request with the required $30 fee.  I would have been happy with a PDF — no need to print it out and waste the postage. On August 20 I was informed my query had been sent to the wrong department and was being redirected to NSW Treasury. On the same day Treasury requested an extension to the normal time allocated for a response:

“Treasury staff are currently subject to the Public Health Orders and as such, staff are working from home. Further, the Team that would hold the information, is currently doing urgent work on the Pandemic response. Together with the limitations of staff attending to offices due to the Public Health Orders, the urgent work on the pandemic response, and to ensure we comply with our Work Health & Safety obligations, we are seeking an extension of an additional 30 working days, being the new deadline being – 29 October 2021.”

Much to my surprise they outperformed and delivered the fruit of their deliberations ahead of time. I eagerly opened the email from the Information Access & Governance Unit that arrived in my inbox on October 25, signed simply, “Kind Regards, Tim”. Finally I could be satisfied that the due diligence had been done, for surely the government must have considered all the costs of the lockdowns on businesses, the lives to be lost due to missed medical screenings, the cost to our children’s education, their mental health, their lost sporting and socialisation opportunities, the cost of stress, the massive economic costs of the employment and business support measures, the long term impact of running high deficits, the heavy-handed policing, the cost of the vaccines, the COVID testing, the media conferences, the masks and sanitiser and all those bloody signs and ever-changing regulations. All these would be outlined in minute detail, I anticipated, each element factored and weighed against the positives the lockdowns supposedly bought with them. How could any responsible government not be armed with a CBA for a lockdown that has cost us at least $18 billion? My faith in good governance would be surely be confirmed!

Alas, I read Tim’s emal

“In summary, the information you have sought doesn’t exist in part, with the remainder being Cabinet in Confidence. Therefore, no documents have been released.”

Many thanks to Tim & Co, if not for the skinny response then certainly for alerting me to a potential problem with my own mental health. To think that a government might insist on what good would come of $18 billion spent, I must surely have confused dreams of decent, honest and open government with the real thing.