I have been slowly working my way through the Ernst and Young cost-benefit analysis of the proposed move of the Australian Pesticides and Veterinary Medicines Authority (APVMA) to Armidale (photo). I am trying to be objective, but it's hard.
As a piece of work, it sets out its approaches and assumptions clearly enough to be understood. That's good. However, it is also a clear case of the limitations of cost benefit analysis or, perhaps more correctly, the way the frame used determines the result. Its actually quite important as a case study in the misuse of comparative and input-output models. Among other things, the methodology is such that the move of an agency from a bigger to smaller centre is likely always to show negative results because of the structure of the model applied. Another problem is the reliance on generalised statistics based on the past.
I will comment further when I have completed my analysis. meantime, 2t might like to read the report and respond!.
Australian Attorney-General George Brandis finds himself in further trouble over the dispute with former Solicitor-General Justin Gleeson. I wrote about this first here and then here.You will find Senator Brandis's statement on the matter here.
This dispute must seem awfully obscure to people outside Australia and many within. The twitter streams and instant politician responses have very little to do with the issues but are simple repetition of opinions and other opinions that might appear supportive. The constitutional issues are quite important, but get lost in the immediate discussion.
It goes on:
Around the size of a leopard or very large dog with coarse orange fur with some darker mottled patterning (as seen in most Koalas). It is a heavily built animal with powerful forearms for climbing and holding on to prey. It lacks canines, using broad powerful premolars as biting tools instead.Clearly this is a dangerous beast. It reminds me of other dangerous creatures including the hoop snake. What advice would you provide tourists coming to Australia as to how they should manage all this wild life? We owe a duty of care and indeed need to ensure that our visitors provide informed consent.
There may be other dangerous creatures of which I am not aware. Please feel free to educate me. In this context, I came across an earlier story:
A $100,000 reward was offered 11 October by the board of directors of the Queanbeyan City Festival Ltd for the capture of the monster known as the Yowie. A Canberra radio station promptly matched the offer bringing the sum to a staggering $200,000.
The offer is serious and expeditions are now being mounted, with world wide interest in the outcome. The eight-foot high Biped has been sighted in the Monaro region. Festival president, Jim Belshaw, said many people had reported their sightings since photos of Yowie footprints were published in a Queanbeyan paper.Sadly, despite the many well-equipped exhibitions mounted to capture this creature, the reward was never claimed. But it does remain the most effective PR exercise ever mounted by the aforesaid Jim Belshaw.
So let your imagination run free. How do we assist visitors to Australia to identify and manage the many risks they face?
I'll bite to an extent, Jim. The APVMA exists to give advice to the Minister. Your long experience in government tells you that there is a reason to be as physically close to the Minister as possible and that 500 metres away is better than 2k. Moving a source of advice several hundred kilometres away from yourself lowers its effectiveness, especially in times of urgent issues.
ReplyDeleteSecond, moving costs money. It may be the tens of millions per annum claimed by the report or it may not. But there has been no plus side expressed except in terms of 'Country folks should have this'. Why? Are they better than Canberrans?
Thirdly, what about the spouses and children of the Authority's workers (and executive)? Joyce has refused to comment on their employment prospects, the upheaval in schooling etc. As well he might. Armidale may not be Timbuktu, but it's also not Canberra. Or Sydney, or Melbourne, or Perth which are also banned as destinations by the edict.
Fourthly, what happens if as threatened over 60% of the most experienced and senior staff take a package? Some will become highly paid lobbyists working to release the private sector from AVPMA shackles, some will retire and just about no-one will move to Armidale. Yet again, the taxpayer will be hit for a round of generous and unnecessary redundancy payments estimated at about $600,000 per senior staff member in the first year.
Finally, why Armidale? Don't forget, no other sites were considered in the whole country. Why not Launceston, or Richmond, or Townsville? Are Armidale people more deserving of largesse than others with worse employment rates, worse economies etc? Only one reason suggests itself, particularly given the costs involved.
Answer that last one without suggesting that a Minister is using Ministerial powers to self-interestedly shore up his re-election prospects at a cost of tens of millions of dollars per annum to the apparently sadly depleted public purse.
tanners poses some very good questions. It would be very interesting to have somebody play devil's advocate to provide some sort of rebuttal to his specific points. Personally, I think the whole authority should just be disbanded.
ReplyDeletekvd
I am still completing my evaluation of the cost-benefit analysis, but some preliminary responses, 2t.
ReplyDeleteAPVMA is a regulatory, not policy body. There is no evidence that closeness to the Minister affects performance. I think that EY would have picked that point up if it had been significant. More broadly, the days we knew in Canberra when agencies were located close to Ministers have gone. NSW is a classic example. Many agencies have been moved out of the cbd for cost reasons. It can be a pain, I actually spent hours travelling to meetings within greater Sydney, but it seems to be a reality now.
EY identified reasons why the agency should be kept together, but seems to be silent on co-location gains with other Canberra agencies. They did focus very heavily on the costs of stakeholder contacts and especially for industry located in Sydney and Melbourne.
EY also looked at the costs and risks associated with the possibility of staff refusing to move, including various levels of redundancy payments. This was a major feature on the negative side. They did not address human issues.
Don't expect me to be too sympathetic on this one. The dynamics of two income, two career households has long been a major barrier to labour mobility in general, regional development in particular. Further, constant relocation has long been a reality that many of us have had to suffer.
As a purely objective comment, locational dynamics are quite interesting. With the shift of Government agencies to Parramatta, there has been a clean-out of staff living closer to old Sydney; most operational staff now live in the south and west of Parramatta. This has really changed dynamics.
I don't have a real degree of sympathy for poor Canberra. I do see a problem with the growth of the SE Sydney-Canberra conurbation. Canberra will continue to grow and have above average incomes. This shift will play a minor role in reducing the need for new apartments or schools, but is in the economic static so far as Canberra is concerned.
Sorry if all this sounds a bit crabby, 2t. The Canberra Times coverage got up my nose.
ReplyDeleteThe CT times was very Canberra oriented indeed. But you know you're in trouble when kvd and I are not (yet) in disagreement. :)
ReplyDeleteAh! That is a danger sign. :) More later when I have actually finished writing up my notes on the report!
ReplyDeleteJim, Jim,Jim. What Government body isn't a policy body? Certainly that one is - I used to direct the Ag and Vet Chemicals section in Agriculture so i worked closely with it. We both provided policy advice. Moving the two further apart will not help matters in the least, and the move to Armidale may help Sydney based companies (although I doubt it) but not those based in other capitals who will have hours added to any kind of meeting.
ReplyDeleteThe days of closeness are not over. DFAT spent a bucket to move the ex-Ausaid staff over to Barton, closer to the Secretary and closer to the Minister.
I don't see why you shouldn't be sympathetic to a family who is told "Lose half your income, or lose the other half of your income, all your social connections, your kids' best options for education and their social connections and make a forced sale of your house."
And you still haven't got near the original question. Why move at all? Maybe we are in the stupid territory of "If it ain't broke, break it!". Since it can't possibly be selfish self-interest.
I don't see why you shouldn't be sympathetic to a family who is told "Lose half your income, or lose the other half of your income, all your social connections, your kids' best options for education and their social connections and make a forced sale of your house."
ReplyDeletetanners, you mean like members of the ADF? Who then go out to get killed or maimed, in the line of duty.
Anyway, while I think I agree with your over-riding query - why move at all - I'm not so convinced that several (dozens?) of public servants being inconvenienced is the best argument? And anyway, what 'policy advice' is inherent to the task (performed, I expect, many times over in many other countries) of assessing the cost/benefit of the latest agricultural poison?
kvd
Two questions, 2t. What was the nature of the policy advice provided? Why would it be affected by distance?
ReplyDeleteOh, the reasons for moving will come later!
ReplyDeleteThe reasons have already been and gone. In case it escaped your notice, a Federal Election was held after the decision was announced but while the costs were still being suppressed.
ReplyDeleteThe policy advice was in two streams, relating to particular chemicals and/or their permitted usage (which the Minister made the decision on, not the Authority) and the more general approach to the entire matter of intellectual property in the chemical industry. That one is settled but I'm sure others have come up. And by settled, I mean that the TPP hasn't revealed whether or not we have to change/review it again.
Quite often we would need to be in the Parliamentary Secretary's office in a matter of minutes to address claims made by lobbyists and to face those lobbyists. You are crippled if you try that over the phone. If I'm not right, tell your bosses you're working from home from now on. Try and convince them it'll make no difference. Same for your coworkers - surely your working relationships won't be damaged if you never see them?
@kvd I'm not denigrating the ADF sacrifice. The ADF realises the challenges and have an entire chain deliberately designed to lessen the impact - DHA housing, spouse employment plans, dependent allowances and more. Even so, those of my friends who were army or navy kids tell me it wasn't enough. What exactly are the Authority's staff being offered? As far as I can see, it's suck it up, or get out.
Thanks, 2t. I was genuinely seeking info.
ReplyDeleteSorry, Jim. It was intemperate of me and I apologise. For what it's worth, I hold the same view about the Northern Australia issue spearheaded by someone who comes from.... oh, surprise, surprise.
ReplyDeleteAnd in the hypothetical and unlikely case that it be suggested that the University of New England be shut down and its functions moved either to Canberra or to Woop Woop, I'd be equally unimpressed before I saw the supporting study.
This is a radical move for an important function of Government and there is no justfication given and no change management plan.
We used to work very closely linking ABARE studies, departmental policies, overseas experience and the Authority's internal expertise. We worked across sensitive areas such as GMOs and the close relationship the Department had with the Authority enabled us to confront plausible salespeople who were spinning a line to avoid regulatory restrictions or scrutiny.
In fact I was surprised at the strength of the external representations against this move, but the chemical companies know that for the next few years approvals will be delayed due to the chaos of the move and the loss of expert staff. While the delays happen, their patents will still be running out. 2 years delay for a successful chemical will represent about a 20% loss on the investment.
@kvd I'm also sorry if you found my 100% authentic imitation of a grumpy old man offensive. I respect the ADF and the job the ADF does in trying to help its forces.
Hi tanners. You gave no offense and, more importantly (as an army brat myself), I took no offense :)
ReplyDeleteI agree with your stance, but still consider the 'inconvenience' of the proposed move to be one of the less important points you raise.
kvd
Hi both. I am now writing up my evaluation of the EY study. It's a very interesting case study. I will incorporate your perspective as well, 2t. A link will follow when I have the post up - it will be on the New England blog.
ReplyDeleteCanberra times today: Only 10 of 103 scientists will move to Armidale. The rest might be persuaded to work remotely from Canberra. I have a brilliant new suggestion - hire a secretary in Armidale and set up a post box address, thereby 'moving' the authority to Armidale. Cut a staff member in Canberra (or move one, to staff the position) and the move can be completed in almost no time at almost no cost.
ReplyDeleteNoted, 2t. Saw the piece.
ReplyDelete