I was saying that they should make transparent measure of government performance and productivity – I wasn’t asking “do they have the incentive to”.

Their policy in other areas as as new doctors training or even new police numbers was also under funded with any shortfall to magically come from ‘reprioritising’ which is political speak for decisions based on whim.

Indeed those are issues that the government should keep in mind when implementing policy.

The call for more transparent measures of productivity and fiscal performance stems from the fact that it provides the incentive for government to actually focus on these issues – because people will then be able to observe some objective measure of government performance, and reward/punish then accordingly.

That is of course presuming that analysts interpret the numbers correctly 🙂

a) effectiveness. Is the programme actually solving the problem? is the problem actually a problem? Cost/benefit analysis is the gold standard, but often difficult because of measurement problems on the benefit side. But at least the issue should be addressed, and not by the people running the programme.

b) efficiency. Are the outputs (the things that solve the problem) produced with the best mix of inputs? Again hard, because the production function is not always well understood or easy to measure. But again, is something that should be addressed in a conscious and contestable manner, especially on the capital side: why is a new school building a better option than a pay increase for the teachers?

c) economy: are the required inputs being purchased at least cost. This is easier to do, especially if there is a competitive market and/or the input is used widely across the economy. For example, it is easy to test if Government departments are paying too much for their photocopier paper. Much harder when the Government is a monopsonist, as it is for specialist equipment and staff.

But despite all of the difficulties, the new government should be putting in place independent bodies to worry about all three of these issues and making sure that the results of their labours are made available to the long-suffering taxpayer.

Productivity measures for different government sectors,
A Treasury created measure for analysing the quality of government spending (as suggested by ANZ),
A independent board/organisation that creates a measure of the quality of government spending

I was merely quoting them for the fact that they suggested that Treasury should create some composition measure of efficiency. Measures of productivity would help in this regard.

It would be a gain if the removal of back-line workers to offset the gain in frontline workers didnt decrease output.

Set bottom-line desired fixed outcomes and then slightly separately measure the productivity to deliver them.