Potentially hundred of billions of taxpayers funds wasted on programs that do not deliver: analysis

The Committee for Economic Development of Australia said that an analysis of 20 federal government programs worth more than $200 billion found that just one had been properly evaluated for its outcomes and effectiveness while a quarter were not subject to any form of evaluation and the assessment of 70 per cent was partial, inconsistent or poor.

The think tank identified similar shortcomings in spending at the state and territory level and warned that, of $64 billion a year spent by government collectively on community services such as disability, aged care, social support and child protection, around $61 billion is being expended without being subject to effective evaluation.

"The community rightfully expects that taxpayer funds are used to effectively improve economic and social outcomes for all citizens, but too often this is not the case," chief executive Melinda Cilento said, noting that spending on community services was growing around 5 per cent a year.

The economists' report, Disrupting Disadvantage, found that despite significant government spending, in the past decade no progress had been made to reducing poverty and disadvantage and "this is in part due to government's failure to evaluate community services for their effectiveness and value".

It found that too often well-intentioned politicians and policymakers were deciding on rapid solutions to social problems without allowing for the proper evaluation of existing programs.

It said this was "a major failing".

"We cannot continue to increase spending on these programs without properly assessing why they are failing to make tangible progress," the CEDA report said.

"Without consistent program evaluation and implementing improvements based on data, evidence and analysis, ineffective programs are allowed to continue even as effective programs are stopped."

Examples of potentially wasteful and ineffective spending from the past decade identified in the report include $33.4 billion for Indigenous programs, $7.3 billion spent on the JobActive program between 2015 and 2020 and $36.5 million expended on the Cashless Debit Card trial.

It found that the $3.3 billion National Rental Affordability Scheme had been implemented without any processes to evaluate its effectiveness or impact on the housing market.

Similarly, the decision to expand telehealth services in 2020 was undertaken without "any plan for performance monitoring or evaluation [and] lacked measures and targets that could inform performance".

The one program judged to have sufficient evaluation was the $89 JobKeeper program.

READ MORE:

The government has made improving the effectiveness of spending one of its objectives. A Commonwealth evaluation policy has been adopted and it is committed to establishing an Office of the Evaluator-General.

The quality and effectiveness of Commonwealth government spending has come increasingly into focus as the government tries to frame a budget that provides living cost relief for households and meets increasing funding needs in health, aged care, defence and disability while reducing debt and not adding to inflation pressures in the economy.

"Demands on government services keep rising even as budgets are under more pressure than ever," Ms Cilento said.

"Meeting community expectations in a fiscally responsible way requires robust and consistent evaluation and learning from the evidence."

The report said evaluation needed to be integrated into decision-making, program design and implementation, and the results should be made public to allow for accountability.

"Embedding effective evaluation will take time, and we are clearly starting from a low base. Currently, almost no federal programs are being effectively evaluated," it said, and cautioned that although appointing an Evaluator-General would be "a good starting point" it was not the solution to all evaluation problems.