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False Economies - doing less with less

28 May 2013 By CPD (Centre for Policy Development)

The Centre for Policy Development's public service Research Director Christopher Stone contends that sometimes cutting can cost more than it saves. Shifting responsibility to the private sector is not a cost-effective strategy when the public sector is better placed to provide essential services.

While efficiency is defined in terms of producing more with the same or lesser expenditure, and some politicians talk about doing 'more with less', arbitrary spending cuts can in reality mean doing simply less with less. Recent budgetary imperatives to cut service provision underline the importance of careful and evidence-based decisions on where to cut and how.

This second instalment of CPD's three-part False economies report gives just a few examples of where peremptory cuts would have led to increased costs as well as reduced performance:

In 2011 Queensland spent $120 million maintaining public works skill capacity much higher than that of Victoria. Queensland may have saved nearly three times what it spent, $350 million, by using that capacity to keep public works costs low.

Doing less with less also highlights examples that question the assumption that the private sector always does the best and most efficient job of delivering essential public services:

Detailed analysis by the Productivity Commission comparing public and private hospitals has shown that the efficiency of each is very similar, with both having areas of strength compared to the other.

The cases provide evidence that reducing government can be wasteful and inefficient. They are a warning that when cuts, privatisation, or outsourcing, are considered, there needs to be thorough and sophisticated analysis of the costs and benefits of such actions.

Download the reports

Download the new report: False Economies Part 2 - Doing less with less

Download the previous report: False Economies Part 1 - Decoding efficiency

For more information, contact:

Abi Smith | CPD Communications Manager | | 02 9043 6815 | 0458 576 880
Christopher Stone | CPD Research Director | | 02 9043 6815


Notes for editors

About the author

Christopher Stone is Research Director of the Centre for Policy Development's Public service program. His interests focus on the use of social science concepts and findings to improve the effectiveness of regulation and governance. He has previously worked in university research centres focusing on environmental law and policy. He has qualifications in law, psychology, and philosophy.

About CPD

The Centre for Policy Development is a progressive think tank dedicated to seeking out creative, viable ideas and innovative research to inject into Australia's policy debates. We give a diverse, cross- disciplinary community of thinkers space to imagine solutions to Australia's most urgent challenges, and we connect their ideas with policy makers, media and concerned citizens.

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