Tuesday, 16 November 2010
Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010
Consideration in Detail
I will be brief because the passionate remarks of the member for Chifley cannot go unanswered. The member for Chifley says that I am deficient in not being able to see a net economic benefit for a $43 billion project, which has not been the subject of any cost-benefit analysis. I do not really know what school of economics the honourable member is from, but the whole point of a cost-benefit analysis is to work out whether there is a net economic benefit. You cannot do that without doing the work. I just remind the honourable member of the comments by the Secretary of the Treasury, Dr Ken Henry—whose fine Italian hand was all over the OECD review, I might say—in 2009:
To start with, like all government spending, there is a need to ensure that any activity is cost effective. Government spending that does not pass an appropriately defined cost-benefit test necessarily detracts from Australia’s wellbeing. That is, when taxpayer funds are not put to their best use, Australia’s wellbeing is not as high as it otherwise could be. It is important, therefore, that policy-advisers are able to access quality evidence and use robust frameworks to assist governments to judge the relative merits of alternative policies.
That really is the point. I remind the honourable member for Chifley that if you want to look at the net economic benefit, ‘net’ means that you take into account the benefits and the costs. That is why they call it a cost-benefit analysis, because there is no such thing as a ‘free good’ here. The government is going to spend $43 billion and we have to identify what the benefits will be and see whether they are greater or lesser than $43 billion. So, no, I am not able to determine the net economic benefit of a project without doing any analysis and neither is the government. It does not want to do that analysis because it knows it will not stack up.