By Max Maddison
The NSW government has drastically watered down the justification necessary for spending taxpayer dollars as accusations insist a new business case policy allows the premier to make major investment decisions “via media release”.
NSW Treasury documents, quietly updated in November, reveal the government has provided a “fast track” pathway for investment decisions, meaning certain projects will not be subject to a business case assessment if they qualify under certain criteria.
Under quietly updated reforms of NSW business case guidelines, the threshold for investment now includes a “public commitment” by the premier. Credit: Dominic Lorrimer
A business case usually includes an overview of the purpose, benefits and costs of the investment decision, providing government justification for spending taxpayer dollars and a cost-benefit analysis providing a metric for whether taxpayers’ dollars are being spent efficiently.
The government has come under fire from the state’s audit office for a “lack of transparency” in financial reporting. An audit released in December found eight of the 15 most significant ongoing investment decisions did not have estimated total costs, while one-third did not have an estimated completion date.
Projects that meet the following criteria could be accelerated: those considered a “public commitment” of the premier, where delivery is considered “time critical”, when “options development” is constrained by the investment, and when “bypassing or altering the business case” would “create benefits that outweigh risks”.
However, a public commitment could constitute any “public statements approved by the premier”, projects that were considered time-critical when a delivery timeframe had been outlined by the government publicly, and projects for which the benefits of bypassing the business case could include saving time and money from not proceeding with it.
“Benefits include avoided expenditure on business case development and quicker progress to delivery,” the document said.
Daniel Mookhey, NSW treasurerCredit: Fairfax
“Business cases and assurance should not be done as a ‘tick the box’ when they won’t add value to resource allocation decisions or project delivery. This policy aims to get committed capital projects to delivery faster while ensuring appropriate analysis, due diligence, and risk management takes place.”
NSW Greens Treasury spokesperson Abigail Boyd said while there were legitimate criticisms of the business case process, the new fast-track policy was a “deeply concerning backflip on promises of transparency and accountability” by the Labor government.
“This new fast-track policy is a blatant attempt to bypass proper scrutiny and oversight,” she said. “This new policy literally allows the premier to make a major government investment decision via media release.
“It deprives the parliament and the public the opportunity to check the government’s homework, to make sure we’re spending public money in ways that are in the public interest and not simply about trying to win elections.”
University of Sydney Professor Hugh Harley said while he understood arguments against the premier’s prioritisation, he said the entirety of the reforms’ changes were “sensible” in light of the need for governments to direct finite resources to the greatest good.
“The government deserves some credit for reviewing the business case process. It would be entirely reasonable for someone to argue the premier’s prioritisation has gone a little too far, but in the context of the overall reforms, I’m fairly relaxed about it,” Harley said, noting the additional role of the auditor-general.
A NSW government spokeswoman said the reforms of the business case guidelines were to “sharpen the efficiency, quality and cost of decision-making”, noting that $134 million was spent by the Coalition government on the business case to support building dams at Dungowan and Wyangala — projects that never proceeded.
“A refined system means government can reduce wasted hours and wasted money that comes when proposals endlessly cycle through a business case system without a decision ever being made,” she said.
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