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 optionsgovernment 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.

12 thoughts on “All Cost, No Known Benefit

  • ChrisPer says:

    They also have an out for doing a costly piece of moral status display which is much favoured by the so called Public Health Community:
    “If it saves just one life, its worth it”
    Then they don’t prove it did actually do so.
    Case in point: The gun laws. No questions, no improvements, no recognition of the costs to the innocent, in 25 years.

  • Daffy says:

    More comedy from the government. I note no mention made of a Gateway review, one of the bright ideas of the early noughties. It was supposed to be an independent peer review to ensure all rabbits properly chased down all available holes. I participated in some as a consultant. Some of that some were hilarious. One major hospital had as its most prominent risk the adequacy of the planned car park. I kid you not.
    But back to CBAs. A human life used to be factored in at about $6m per person. For the Covid-19 frolic we would have also seen Disability Adjusted Life Years, which also have an economic cost applied to them. Then we could have had a go at children’s de-railed education, long term economic and health outcomes, etc.
    But, none of that wins votes (?) or shuts-up (!) the docile media like a good lockup of the healthy.

  • March says:

    Not sure which is worse the poor governance or the disinterested media.

  • pgang says:

    The only measure that matters to politicians, bureaucrats and the MSM is whether or not the policy shoves us further down the socialist rabbit hole. As that’s pretty much a given now, why bother with any analysis at all?

  • Stephen Ireland says:

    Thanks Marc. I guess a CBA is not of great consequence when the view of the Reserve Bank is that money doesn’t cost much. Similarities with the TGA admitting that it hadn’t’ bothered to review the vaccine-supporting date supplied by Pfizer and some one on the FDA panel saying “We’re never gonna learn about how safe this [Pfizer COVID vaccine for young children] vaccine is unless we start giving it. That’s just the way it goes.’ One suspects that there has been no cost benefit analysis done by the politicians demanding that the TGA fall into line and rubber-stamp what looks like being a deleterious form of immunity in children than that that could be acquired naturally.

  • lbloveday says:

    ““If it saves just one life, its worth it”

    Another example was the mandatory fencing of swimming pools. In the area where I lived at the time, many pool owners could not afford fencing, so filled them in or dismantled if above-ground, depriving children of learning to swim and all family members, especially adults, of health-giving, life-prolonging exercise.

  • Claude James says:

    I recommend that a full-scale CBA be performed on multiculturalism.
    Now, a proper CBA requires, in addition to asserted benefits, an assessment and inclusion of ALL costs -direct and shadow, tangible and intangible, short-term to long-term.
    (NB: The transfer of money created by the host culture to subsidise the activities and life-styles of members of minority cultures while these minority groups produce significant numbers of people who spens their days in acts of destruction of the host culture is a cost -just to be clear. And so are acts of appeasement of anti-host cultures by permitting them to use their own legal, political, marriage, education, and financial systems which are different from, and antithetical to the host versions. This is an example of an intangible cost.)

  • nfw says:

    Tim, the never worked so hard in his life being paid each fortnight public servant, must have spent minutes of that non answer. I’m so glad to see some of the information “doesn’t exist in part” and the rest is Cabinet-in-Confidence. Do these people even know how to use the English language or were they just instructed in “1984”? Therefore some of it “does exist in part”. And why only in par? Have the shredders been working overtime? Of course Cabinet-in-Confidence can never ever ever be released to the people (serfs?) who pay the taxes which pay for the Cabinet and all their never worked so hard in their lives public servants. They can release anything they want; they just don’t want us to know how they colluded to destroy the economy, lives and dreams for something which doesn’t exist and can be cured by Ivermectin . There must be squillions in this scam for politicians and public servants.

  • Lawrie Ayres says:

    Dear nfw. You are undoubtedly a cynic and a damned fine one at that. Why is it that a common man or woman can be elected to parliament and suddenly can be trusted with state secrets yet his or her peers cannot? Where is this medical advice that says children doing stressful exams should be stressed further by wearing a mask that will not and cannot stop the dreaded virus from sneaking through either in or out? the mask is just an outward sign of submission much like wearing a star of David or a dunces hat. The problem is that governments will continue to impose stupid laws and restrictions for as long as we allow them to dominate us. A bigger problem is that in voting one mob of dictators out of office we simply invite another in.

  • Losthope says:

    This is why Comrade premier Gladys was such a rubbish premier. She tried to manage covid, rather than managing the state.

  • brandee says:

    Marc from this analysis I would vote for you to head treasury or be the NSW Premier.
    What a bungle did former Premier Gladys make of her signature project, the George St light rail. Did she not consider a trolleybus if she wanted to use the electricity grid rather than an old style tram on steel tracks. Why with all the underground and only partially mapped services in George St did she have the street excavated and not restored for almost 4 years, impoverishing the small businesses along the way.
    From an estimate of close to $1.5 billion the cost blew out to over $3 billion.
    Now many of the Spanish built trams running in NSW have had to be withdrawn from service because of structural cracking. It is said that repairs, by the manufacturer, could take 1.5 years.
    Gladys must now be embarrassed to be reminded of saying trains [and trams and ships] have to be built overseas as they are not made in NSW. Someone should have taken her to Newcastle or to other Australian states where they make their own.
    Politically Gladys seemed more Left than Conservative. She supported removal of almost all restrictions on abortion limits and she and her Education Minister have done nothing to restore conservative values to the education curriculum.

  • Daffy says:

    @March “disinterested media” ? Feckless UNinterested media, more like it.

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