THE PATH TO EVIDENCE-BASED POLICY DEPARTMENT OF THE PRIME MINISTER AND CABINET THE PATH TO EVIDENCE-BASED POLICY Wayne Poels Deputy Executive Director Office of Best Practice Regulation 16 MARCH 2017

PART 1: OBPR’S ROLE IN SUPPORTING EVIDENCE-BASED POLICY… …AND WHY I WEAR A HARD HAT PRIME MINISTER & CABINET

A PLAN TO BOOST PRODUCTIVITY AND REDUCE REGULATION The Government’s first term focus was to reduce the costs of complying with regulations (i.e., reduce red tape) by $1 billion a year. WE ARE HERE Key elements of the Government’s 2013 election commitments Regulation Impact Statements are compulsory for all Cabinet Submissions Reduce the cost of complying with Commonwealth regulations by $1 billion a year Undertake an inaugural stocktake of Commonwealth regulatory burden Establish a Regulator Performance Framework Relocation of the Government’s deregulation function to PM&C

AUSTRALIAN GOVERNMENT REGULATION IMPACT STATEMENTS (RIS) A RIS is a document prepared by an agency to inform decision makers of the regulatory implications. RISs are mandatory for all Cabinet Submissions and/or where the policy is likely to have a measureable impact on business, community organisations or individuals. A RIS exemption can only be granted by the Prime Minister. The OBPR assesses the type of RIS that is required – in other words – the level of analysis deemed appropriate to inform decision makers of the regulatory implications. Australian Government RISs must address seven RIS questions: What is the policy problem? Why is government action needed? What policy options are you considering? What is the likely net benefit of each option? Who will you consult? What is the best option from those you have considered? How will you implement and evaluate your chosen option? PRIME MINISTER & CABINET

BY THE NUMBERS Under the Regulatory Reform Agenda Approximately 2,000 assessments by OBPR each year. cv Preliminary Assessment – is a RIS required? Agency submits preliminary assessment Of these, around 60 of these require detailed analysis in the RIS. A further 20 COAG RISs are also prepared in an average year. In the context of the policy footprint The compliance costs of (good and bad) Commonwealth regulations is approx. $70b per annum (4% GDP). Our best guess is that there are more than 85,000 Commonwealth regulations. This annual cost is more than the combined annual state product of Tasmania and the Northern Territory. PRIME MINISTER & CABINET

PART 2: EVALUATION: WHY IS IT SO DAMN HARD? PRIME MINISTER & CABINET

A QUICK RECAP OF COMMONWEALTH EVALUATION 1987-1996 1996-2006 4 (1996-97) Improved economic conditions lessened impetus to focus on performance monitoring. Formal evaluation strategy abandoned and evaluation at the discretion of secretaries. Departments encouraged to evaluate key interventions on a 5-year cycle but no formal requirements to do so. Finance unit responsible for advising on evaluation discontinued. Difficult macro and fiscal environment provided impetus for improving government performance. Strong emphasis on improving effectiveness and efficiency of interventions through regular evaluations. Program logic and evaluation planning requirements for all NPPs introduced (devolved model). 1 2 By 1988, an in-depth review found serious flaws which led to a formal evaluation strategy being endorsed by Government. Every program evaluated every 3-5 years. Portfolios to prepare evaluation plans for programs with substantial resource or policy implications. Completed evaluations to be published. Finance to provide ‘quality assurance’ and advice’, including handbooks on methodology and training. 5 (2006) Finance secures Cabinet agreement to implement the ‘Strategic Review Framework’. Reviews of large, high-priority, complex, cross-agency reviews led by eminent persons, assisted by secondees. In 2009, five strategic reviews conducted with ‘mixed reviews’. Some observations An ANAO assessment of 530 evaluations published between 1993 and 1997 found one-third suffered from methodological weaknesses. 3 PRIME MINISTER & CABINET

WHERE ARE WE NOW? The strengths: there is a relatively robust evaluation culture spread throughout the APS. We have a healthy Evaluators’ Community of Practice. Many portfolios have established their own evaluation principles and guidelines. Portfolios are working collaboratively to share evaluation tools and experiences and to further build their in-house capabilities. Through the work of BETA, Commonwealth departments have an innovative, world-class platform to test and evaluate policy options. And weaknesses Evaluations are not transparent and there is little ‘visibility’ of the quality of work being done. it remains unclear how completed evaluations are feeding into the policy cycle to help design future interventions or improve current ones. it is hard to determine if evaluations align with a portfolio’s or the Government’s strategic priorities and risks. PRIME MINISTER & CABINET

MANY HEADS ARE BETTER THAN ONE. PART 3: WHAT’S NEXT? MANY HEADS ARE BETTER THAN ONE. PRIME MINISTER & CABINET

THE PERENNIAL CHALLENGES 1. Evaluating outcomes versus interventions 2. Transparency – the toughest principle 3. Seeing evaluation as part of the policy life cycle 4. Building in capacity and capability PRIME MINISTER & CABINET

End of presentation PRIME MINISTER & CABINET