Thursday, September 23, 2010

How would the Treasury analyse the NBN?

It certainly wouldn't be just about the money.

It would use the same five criteria as it does for everything else.

It has just republished and updated them, below.

We bring a whole-of-economy approach to our analysis and advice; we
recognise that the wellbeing of Australians encompasses much more than is
captured by traditional quantitative measures of economic activity; and we
complement and challenge the advice of other agencies on the effects of
policy proposals.

While the wellbeing framework is not a checklist to be applied in every
circumstance, it reinforces our conviction that trade-offs matter deeply. There are
five dimensions to the wellbeing framework:

The opportunity and freedom that allows individuals to lead lives of real
value to them. We have drawn heavily here on the thesis of economist,
philosopher and Nobel laureate Amartya Sen, that human development is
measured by the extent to which individuals have the capabilities necessary to
choose to lead a life they have reason to value.

The level of consumption possibilities available to the community over time.
This includes both market and non-market goods and services, such as the
character and quality of people’s engagement in the community, the physical
environment, health and leisure.

Distribution looks at the spread of all other aspects of wellbeing across the
Australian population. Distributional outcomes across different social groups,
geographic regions and generations are also considered.

The overall level and allocation of risk borne by individuals and, in aggregate,
by the community. Risk can be particularly harmful to wellbeing when people
who are clearly unable to manage risk are nevertheless required to bear it, or
are exposed to it unknowingly.

The level of complexity confronting Australians in making decisions about
their lives.

The NBN seems to provide some of each. The question would be whether it provided enough of each to be value for money given the amount being spent and the resources that would be moved from other activities.

But listen up. As I have been saying, it's not all about financial outcomes. So relax. Okay?

Treasury Strategic Framework 2010-11

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