Catallaxy Files

Wayne Swan was telling us, just yesterday, about how the debt and deficit saved Australian jobs. Today we wonder how he knows? Certainly the Australian National Audit Office doesn’t understand how those sorts of claims can be justified.

One of the principal motivations of the Government’s economic stimulus package was to support employment. However, the Program Guidelines for the Strategic Projects component of the RLCIP did not advise councils that the creation or preservation of jobs was an objective of the Program, or that applications would be assessed having regard to the number and nature of the envisaged employment outcomes of the project either during the construction stage, or ongoing. Similarly, whilst the application form asked councils to describe their project and what it would deliver, the application form did not seek data on the envisaged employment outcomes of the project.
…
As a result, there were few instances where media releases were able to include ‘job figures’ as requested by the Minister’s Office. Specifically, of the 137 official announcements of funding approval, there were six (four per cent) where the media release mentioned a specific expected employment outcome.
The program management arrangements also did not include any benchmarks against which to assess any employment outcome claims that may have been made by applicants, with the number of jobs expected to be created in relationship to the value of grant funding sought varying considerably. For example:
• Hobson Bay City Council’s successful application for $9 million in Program funding for its Regional Kitchen Project stated that construction of the facility would support an estimated 30 jobs during construction and that the kitchen itself would support an additional 55 ongoing positions, and provide training and career paths for employees in the food industry (a ratio of $300 000 in grant funds for each construction job and an overall ratio of $105 882 in grant funds per job);
• the supporting material for Launceston City Council’s successful application for $4 million in Program funding towards the Aurora Stadium Northern Stand Redevelopment project stated that, during the 12 month construction phase, 60 full?time equivalent jobs would be created, drawn from a wide cross?section of the trades sector (a ratio of nearly $67 000 in grant funds for each job created); and
• Townsville City Council identified in its successful application for $16.2 million in Program funding for its Townsville CBD (Flinders Street) Redevelopment Project that 954 full?time equivalent construction related jobs would be created and support 207 in the retail sector (a ratio of $17 000 in grant funds for each construction job created and an overall ratio of $13 969).
By way of comparison, for the predecessor Regional Partnerships Program, the department’s benchmarks for assessing the value for money of proposed project outcomes included, where job creation was a focus, that each ongoing fulltime or equivalent job be supported by less than $25 000 in grant funds.

So the government had no way of measuring success or even of auditing the cost per job (if any) created by the scheme.

(Disclosure: I live in Hobsons Bay).