False economies, Part 2: Doing less with less | LANDMARK REPORT | May 2013

scissors cutting money © GeorgeMPhotograohy

Why some cuts hurt more than others

In Doing less with less, CPD public service Research Director Christopher Stone contends that sometimes cutting can cost more than it saves. Shifting responsibility to the private sector is not a cost-effective strategy when the public sector is better placed to provide essential services. While efficiency is defined in terms of producing more with the same or lesser expenditure, and some politicians talk about doing ‘more with less’, arbitrary spending cuts can in reality simply mean doing less with less.

Recent budgetary imperatives to cut service provision underline the importance of careful and evidence-based decisions on where to cut and how. This second instalment of CPD’s three-part False economies report provides examples of where peremptory cuts would have led to increased costs as well as reduced performance:

In 2o11 Queensland spent $120 million maintaining public works skill capacity much higher than that of Victoria. Queensland may have saved nearly three times what it spent, $350 million, by using that capacity to keep public works costs low.

Doing less with less also highlights examples that cast doubt on the assumption that the private sector always does the best and most efficient job of delivering essential services, for example:

Detailed analysis by the Productivity Commission comparing public and private hospitals has shown that the efficiency of each is very similar, with both having areas of strength compared to the other.

The cases provide evidence that reducing government can be wasteful and inefficient. They are a warning that when cuts, privatisation, or outsourcing are considered, thorough and sophisticated analysis of the costs and benefits of such actions is necessary.


Download False Economies part 2 – Doing less with less

Read more and download False economies part 1 – Decoding efficiency

Read more and download False economies part 3 – Bang for our bucks


Help us counter evidence-free attempts to outsource, downsize and privatise our public services – Become an Ideas Sustainer


Blog Comments

Toni Walkington

Compulsory reading for all MPs #wapol

thank you for this important publication and contribution to this debate – good to see

Christopher Stone

Thanks for the tweet Toni, we can only hope.

Christopher Stone

Glad you liked it Greg, just doing our best to steer the debate in more sensible directions.

Excellent work Chris and team (didn’t Miriam do well last night?) great article a view that needs to be amplified. I heard from a work colleague that there are two prices for quotes in Canberra: market price and Government price ( always more), a very Greek attitude and look where they have ended up. The corruption in the private sector is writhe and only matched by public sector attitudes. Your Queensland example looks a good model to counter some of this. Love your organisation, have just come across it.

Cheers Chris

Christopher Stone

Thanks Chris, I agree the case of Queensland’s public works is very interesting. Check out Tim’s paper (https://cpd.org.au/2012/09/public-works-public-skills/) if you want more detail on what really happened in the BER. And yes, the twitter response to Miriam on Q&A was great, with some even calling for her to be made PM!

Finally someone holding a view that counters the banks and business sector’s constant bullying and hoodwinking. Bupa, NIB and all the other private for profit health insurers should be struck off the list.

Christopher Stone

Thanks Matt. I hope you’ve had a look at the work by Ian McAuley and others on health insurance: https://cpd.org.au/category/programs/public-service/health/

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