A Collaborative Cost Benefit Analysis

Malcolm Turnbull wants one. Now Mike Quigley wants one too, if only to put some numbers behind the debate around alternative technology solutions. But when a cost benefit analysis is provided, doesn’t it always say what the sponsor wants to hear?

For that reason isn’t Mike Quigley right when he suggests that the Communications Alliance should be the group doing the numbers work? Well, somebody should. Otherwise we’ll end up with another report driven by an agenda.

This week on CrossTalk we suggest that we should develop a more collaborative approach to the development of a cost benefit analysis. In other words, provide a platform where anyone in the industry can suggest inputs for the model – the data and assumptions that will influence the result. Why leave it in the hands of economists who don’t have the full range of technical experience? With full visibility of the inputs multiple economists could then build models to give us a range of possible answers. Each would be open to full and rigorous debate.

It’s an idea that gets the nod from the three economists I spoke to for this week’s program:

– Henry Ergas, a professor of infrastructure economics at the University of Wollongong, who built a cost benefit analysis for the NBN back in 2009.

– Steve Keen, author of Debunking Economics, who is currently working on a computer program to develop a more sophisticated model of the economy.

– Nicholas Gruen, CEO of Lateral Economics and former chair of the Government 2.0 Taskforce.

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