Accounting Model Highlights Social Impact of Government Spending
Wednesday, 12th September 2018 at 5:45 pm
A framework measuring the impact of government projects will revolutionise the way social investment is measured, an expert believes.
Richard Holden, a UNSW professor of economics and co-developer of the framework, spoke to Pro Bono News following its launch on Monday night.
Holden said its purpose was to “provide a method of thinking” about the rate of social return on government investment, ranging from physical to social infrastructure.
“It helps us not only think more broadly about what the social benefits are, but also to do it in a way that is sufficiently concrete to compare across different types of investments,” Holden said.
The report compared government funding of the National Broadband Network (NBN) and the National Disability Insurance Scheme (NDIS), and found the benefits of the NDIS were harder to measure economically than the NBN.
“The economic value of the life-saving benefits of carer stress are significant and go some way to offsetting the additional cost of the NDIS over existing schemes,” the report said.
CEO of Australian Federation of Disability Organisations (AFDO), Ross Joyce, told Pro Bono News models such as this one helped to put social investment decisions in clearer focus.
“AFDO welcomes such models which, through a rigorous approach, highlight the additional and broader individual or community benefits that an investment in social supports provides,” Joyce said.
According to the report, the accounting method meant they could determine what value of estimated insurance against disability would be needed to justify the cost of the NDIS.
“That figure amounts to less than 1.1 per cent of income for the average working Australian,” it said.
Howard said he wanted to see the government think more “like the private sector” in terms of how they treat large budget items, while also using social science to back the ideas.
“No matter if you’re looking at toll roads, or investments in education, they need to be put on a comparable financial footing, but at the same time, you should be using the best social science research to think about what the social benefits of these projects are,” he said.
CEO of Community Council Australia, David Crosbie, told Pro Bono News while “this kind of quantification benefit is to be embraced where possible”, he had some concerns with the model, as it was “very accounting centric”.
“While this approach may be a very useful prism through which to view, analyse and compare some programs, as the report does, it is less flexible in terms of fully capturing the diverse social and human impact of community based programs and interventions,” Crosbie said.
Howard said his team were liaising with a range of people in government and the social sector, as well as presenting the idea at a range of conferences to further the idea.