1. Ensuring efficient and effective security in Australian transport Session 7 Introduction Tim Risbey BITRE

2. Measures taken include: –Aviation Security Identity Card (ASIC) –Maritime Security Identity Card (MSIC) –Passenger screening for liquids, aerosols & gels –Checked bag screening –Air cargo screening –Container screening –Regional airport passenger screening –General aviation security requirements

3. Impacts Direct impacts on ports/airports/terminals, operators, staff,passengers General economic impact –BITRE estimates of impact of a notional terrorism attack at a major airport $1.2 billion spent on aviation security since September 2001 ASIC cards –Over 90,000 ASIC card holders, valid up to 2 years –Generally cost in the order of $180 per person

4. How can economic analysis improve efficiency and effectiveness ? Help identify constraints early in the process Estimate the economic cost of different options Help maximise risk reduction and minimise economic cost Support evidence based policy development -Point order of magnitude estimates of the cost of failure

5. Estimating impacts of security measures Clearly define measures and scenarios Allow time for modelling flows of goods/people/networks Estimate economic, not financial costs Work with stakeholders to estimate compliance costs - who pays? Allow for adaptation, given timely information

6. Tools to improve effectiveness and efficiency Benefit-cost analysis –Can compare the economic benefit (reduced risk of an adverse outcome) with the economic cost of the counter measure(s) –Can estimate the economic cost of failing to prevent an attack Cost effectiveness –Least cost way to achieve a specified outcome

7. Cost effectiveness example 1) Identify total risk reduction and impacts of countermeasures Implementation Impacts Various countermeasures US DHS, Aviation Security Impact Assessment Working Group (ASIA-WG), Report to ASAC, 3 May 2006 Total risk reduction

8. Cost effectiveness example 2)Analyse implementation sequence impacts Implementing countermeasures in best value sequence requires analysis of incremental risk reduction Total risk reduction Implementation Impacts US DHS, Aviation Security Impact Assessment Working Group (ASIA-WG), Report to ASAC, 3 May 2006

9. Key messages Economic analysis can improve efficiency and effectiveness It can improve social welfare outcomes by minimising economic costs of security and supporting the development of evidence based policy