In yesterday’s House of Representatives Question Time, we learnt from the Treasurer that the cost-benefit analysis (CBA) into the relocation of the Australian Pesticides and Veterinary Medicines Authority (APVMA) cost $272,000.
And that it’s a matter for Cabinet, not imminent public release. Previously, the Minister responsible for the Authority, Barnaby Joyce, has also conceded that the CBA may not directly endorse the move.
While it was refreshing to encounter a QT question of actual policy and fiscal substance, the associated media coverage has done little to inform readers of what the CBA might cover.
The term is commonly abused. In the first instance, there is a significant difference between CBAs and associated business cases in the public sector, and those prepared for corporations.
The source of the difference is obvious: Government seeks to maximise welfare; businesses seek to maximise profit.
This is why the typical criticism of a mining economic impact analysis (nominally a species of CBA) focuses on its lack of attention to public goods, rather than on the economic activity it generates.
Admittedly miners and other developers tend to gild the lily, assuming the total value of the project and its jobs as an economic increment, and minimising the externalities. But there’s rarely virtue on either side of the fence.
In contrast, a Government CBA should be straightforward, particularly for a scientific agency.
The direct costs of relocation (and presumably redundancies) are measured, as are the likely savings from renting in Armidale rather than Canberra.
Indirect benefits may well increase. The flow-on impact of demand from the APVMA in a small market such as Armidale may be greater than in the dilute ACT economy.
But what of the public good? After all proximity to the Minister is a potentially transient benefit, given the demonstrated whimsy of the national electorate.
Three potential items stand out here, each difficult to quantify. First, there will be an increase in regional employment, which is more difficult to create than in an urban area. Previous attempts by Ministers to move Departments into their leafy suburban electorates would not have delivered the same.
Second, there is a demonstration of capability. Decentralisation has been tried with more trivial agencies at a State level, but moving an important Federal body will provide a powerful case study.
And third, collocation near UNE will provide a valuable fillip to both organisations. The most challenging growth goal for regional Australia is to create a multi-level economy. Siting regulators next to leading educators may be the bait required to relocate some corporates within the area. A town-and-gown outcome for Armidale would be a massive achievement.
As we say, difficult to quantify. But the converse question remains: where’s the risk? Is there an actual downside to having a scientific agency outside a capital city? It doubtless offends Canberra’s sense of pre-eminence, but some might see that as just one more collateral benefit.
By Alastair Furnival and Catherine McGovern