Discussion paper

False economies part 3: bang for our bucks

Public sector Economics Australia
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apo-nid36326.pdf 4.11 MB

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

CPD’s public service research director Christopher Stone contends that despite rhetoric to the contrary, the Australian public sector is efficient.

Investigation of Australian public sector in terms of results against resources finds it to be more efficient than the public sectors of most similar nations. This means that our public sector does a good job of delivering essential community needs with minimal resource inputs, and is adaptable to changing circumstances.

This paper continues CPD’s False economies series by setting out evidence on the efficiency of our public sector. Internationally we stack up very well on efficiency:

Among OECD nations, Australia is the only one to be in the top ten most effective governments, but the bottom five lowest taxing governments. This is strong evidence that we have a far more efficient government than most of our peer nations.

The paper also points out that our public sector is as efficient as the private sector once the different responsibilities are taken into account. In general the harder jobs are left to public sector organisations, more is expected of them, and when this is factored in their performance is similar to that of private sector organisations.

This research builds on previous papers in the series: Decoding efficiency, which busts the myths surrounding the often-misconstrued term, and Doing less with less which gives detailed examples of how such misunderstandings can create waste.

The False economies series is pointing out that the way we discuss efficiency in public services is damaging the nation. The term’s misuse justifies poor and ill-considered policy approaches, which can actually drive inefficiency and waste, and distracts us from genuine efficiency improvements that can be made.

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