Dollars & sense

Calculating the "return on investment" in social programmes may lead to better outcomes - but what's the measure of success?

- DANYL MCLAUCHLAN

We all know that Christmas is a terrible time for most people’s finances. And this year is particularly tough, with the global economy seemingly under siege from almost every angle.

So it may or may not put your own finances in perspective when you consider that the government coughed up more than $150 billion in the 2022 financial year. What did it get for all that dosh? Well, there was superannuation, of course, and the rest of the social welfare system, education, healthcare, roads, justice, soldiers, national parks, and a whole bunch of ministries, crown entities and institutes.

It’s a lot of money – about 42% of the value of all of our nation’s goods and services produced in one year. And to make sure there is accountability, the public service employs auditors and accountants to ensure it’s all been lawfully spent. But they don’t generally ask whether it has been spent well or wisely. That is the domain of the politicians who govern them, and every election year, the public get to have their say on the wisdom of those choices.

But even politicians can fi nd it hard to evaluate the outcomes of their own spending. In a recent report, Auditor-General John Ryan warned, “It is often not clear to the public or Parliament what outcomes are being sought by governments, how that translates into spending, and ultimately, what is being achieved with the public money the government spends … Reporting is often fragmented and spread between different organisations. It is left to Parliament and the public to piece together both what has been spent and what has been achieved. In many cases, this is not possible.”