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Heat on departments to prove value for taxpayer outlays

 

Federal departments will soon be under unprecedented pressure to justify the billions of dollars of taxpayers' money they spend each year, according to a leading private consultancy.

The Noetic group says most government organisations cannot demonstrate the benefits from large and expensive programs of work, and this is unlikely to be tolerated in the new era of ''fiscal responsibility''.

But the group's chairman, Andrew Balmaks, says the blowtorch is about to be applied to government spending decisions like never before, with the commission of audit and the May budget expected to create a whole new landscape for accountability.

 

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Noetic is best known in the federal sphere for its work in the defence sector, but says it has helped Victorian government organisations save up to $73 million in five years, helping to clearly define the goals of spending projects before they begin.

Noetic's latest advice bulletin to clients says a business-as-usual approach from the federal public sector is ''unlikely to be tolerated in the new era of fiscal responsibility''.

''Quite simply, government departments haven't been truly under pressure to deliver value for money on taxpayers' money,'' Mr Balmaks said.

''Within recent time, it hasn't been the focus, certainly not measuring and proving it.''

Mr Balmaks cited big-spending projects, such as a departmental IT upgrade, as an area where money could be difficult to account for.

''The return on investment might not be immediately recognised in a faster work flow or increased productivity,'' he said.

''Greater effort is needed in identifying measurable benefits from the start of the process, before you make an investment decision.

''Money is only going to get tighter and managers will be held accountable for evidence of a real impact on productivity, and ultimately of real benefits for Australians from the taxpayers' investment.

''The onus will be on them to show how an injection of money at point A resulted in an overall improvement by point B.''

Mr Balmaks said that in the new fiscal environment, mindsets in some public-sector organisations were going to have to change.

''What needs to change is that departments need to demonstrate value for every public dollar they are given,'' he said.

''That's where the Treasurer is really putting the heat on, and that's what's coming out through the commission of audit. And if you can't demonstrate it, you shouldn't be spending it.

''Certainly departments will be held to much greater account, they'll be needing to demonstrate to the government why they need their budget.''

Mr Balmaks predicted there would be greater pressure for departments to explain the goals of spending before they embark on a project.

''One way of doing that is being able to articulate that there's evidence that you need to make an investment and being able to articulate the benefits it will produce - essentially putting forward an argument backed up by evidence,'' he said.

''The whole point of the public sector being given money is to deliver some sort of service, so what you're trying to do is provide greater accountability and assurance that the money provided to taxpayer departments is actually delivering the services they are supposed to.''

11 comments

  • The vast majority of the Australian public should support this policy. If the Government is serious about it, we can look forward to its application to parliamentarians and the requirement that they show evidence of the benefit flowing from the lavish expenses money they claim. Participation in bike rides and friends' weddings and overseas junkets might be a good start.

    Commenter
    kamai
    Location
    Canberra
    Date and time
    March 25, 2014, 7:18AM
    • I'm sorry but this has to be the most unintelligible collection of Management Bingo words in a CT article for a long time.

      Anyone who has been through the circus of public administration under a Conservative Government has seen this before, and more importantly knows how it ends up for public spending.

      Increasing the bureaucratic hoops around approvals results in more down the line costs or a decreased quality of service. It is only the lamprey consultants offering up "the magic solution" out of their carpet bags that win in this situation.

      Commenter
      Argle Bargle
      Date and time
      March 25, 2014, 7:19AM
      • This is a nonsense storey. These spending controls already. The idea that the PS is lazy and wastes money in this way is outdated and inaccurate.

        Commenter
        Joe
        Date and time
        March 25, 2014, 7:20AM
        • This piece is just an advertorial for Noetic. All that is being said here is that policies should be subject to careful analysis before implementation.Departments do this already. Then the Minister decides that the program has to be implemented anyway.

          Commenter
          Nonplussed
          Location
          ACT
          Date and time
          March 25, 2014, 7:57AM
          • And not before time either, some of the projects that receive public funding are so far out there, with so little connection to every day life, or so little real world end value that they are an absolute laughing stock, especially to those public servants having to work on them and justify their existence by actually trying to find some sense in all of the nonsense.
            Trust me, I worked on plenty of them.

            The real point here I think is not to shoot the messenger, but to lay the blame for this continual waste of public money squarely at the feet of the politicians of all persuasions, the public servants don't make policy, they just carry out the wild election/re-election winning dreams of their political masters and we know full well that any politician would sell his/her soul to the devil to stay in power.

            Commenter
            Hooray, common sense prevails!
            Location
            Canberra
            Date and time
            March 25, 2014, 8:16AM
            • I wonder if Noetic knows any companies that can help with the problem they have identified?

              Commenter
              Jason
              Location
              Canberra
              Date and time
              March 25, 2014, 8:31AM
              • How hypocritical this government is. First thing they do is split one department into two and appoint a secretary to the new department. Instantly, the wages bill goes up by at least $500,000.00 per annum.

                Commenter
                farnarkler
                Location
                Canberra
                Date and time
                March 25, 2014, 9:06AM
                • And how much did we pay Noetic to tell us this?

                  Commenter
                  Ryan
                  Date and time
                  March 25, 2014, 9:07AM
                  • I'm sure the Noetic group won't be affected by Tony's spending cuts. They will probably be pocketing the savings Departments have to make.

                    Commenter
                    Lincoln
                    Location
                    Farrer
                    Date and time
                    March 25, 2014, 9:07AM
                    • The government should start with the Australian Fisheries Management Authority which is probably not meeting our obligations under the UNCLOS Treaty or its stated legislative objectives.
                      Since its inception in 1992 it has cost this nation an estimated 10,000 jobs, cost the taxpayer $240 million under the Howard Government in an ill considered buyback and has all but bankrupted what is left of the industry following a government cost recovery policy that to the industry isn't sustainable.
                      In very few of our fisheries has there been a major investment in new plant and equipment since It was formed.Turnover and tax revenues from the fishing industry are way down since 1992 but government outlays for dubious science and even more dubious enforcement are way up.One only has to look at the brawl over the "science"which permitted AFMA to licence the Margiris or the constant decline in quotas in The South East fishery or Southern Shark fishery to say AFMA isn't giving the taxpayer value for money.
                      All AFMA have been is a cash cow for public servants and the scientific community

                      Commenter
                      Michael M
                      Date and time
                      March 25, 2014, 9:36AM

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