Discussion paper

False economies part 1: decoding efficiency

Public sector Policy Economics Financial inclusion Australia

NB The full compilation of this series was launched on 26 June 2014, called "False economies: unpacking public service efficiency" and available here >

Every Australian needs to understand what politicians mean when they talk about the ‘efficiency’ of government . Why should we care? Because this is our money, being spent on us and the things that matter to us . It makes sense to demand that it be spent well. Too often, debates on the efficiency of government are conducted by a handful of expert economists in obscure language that excludes the general public. Or they are skewed by politicians who want to promise more while taxing less, or who don’t have an eye on the long - term impact of spending cuts or increases. This short paper translates the jargon used in economic debates about the efficiency of government. It also looks at the muddled thinking that can lead to ‘false economies’ – decisions made in the name of efficiency that end up costing more than they save. The main message of this paper is that to know whether we are getting public value for public money, we must consider what government does as well as what it costs; to look at results as well as resources. This is true both of decisions to cut back on spending or decisions to privatise or outsource public services.

The Centre for Policy Development paper is the first of a three part report, False economies, that will be published in instalments during 2013.


Publication Details