One of the important roles NSW Treasury plays is measuring the impact of the state’s projects, programs and policies. And once we’ve found a way to measure the economic and social benefits, our Treasury economists and financial analysts look for ways to improve on the gauges and formulas they use.

It’s not easy, but weighing up risks and benefits versus costs is critical to ensuring the NSW Government delivers the best possible outcomes for the people of NSW.

To that end, NSW Treasury has unveiled a new cost-benefit analysis model, improving on its processes for measuring the risks and benefits involved in any new undertaking.

The cost-benefit analysis replaces NSW Treasury’s previous economic appraisal model, providing a more consistent approach to measuring the value and risks involved in projects for NSW communities.

The new analysis includes social, economic and environmental impacts. It also includes more in-depth testing of decisions before they progress to the next step.

To allow for costs and benefits occurring at different times, NSW Treasury’s cost-benefit model uses the concept of present value – where future costs and benefits are discounted.  The new model also includes a cross-border step where users of a planned program or service may include people from neighbouring states.

For many of us, it’s enough to know someone somewhere is crunching the numbers that touch many aspects of our lives.

Others, however, may want every gritty detail. From calibrating a social discount rate to the latest on distributional analysis.

Read more in the new NSW Government Guide to Cost-Benefit Analysis (TPP17-03) .

Examples of cost-benefit analysis 


Social programs

Recurrent expenditure

Policies and regulations

Transport: Roads, railways, ports and airports

Health care: hospitals, mental health care

Public health programs; subsidies for medicines

Environmental regulations

Utilities: Water, energy

Vocational education and training places

Determining class sizes

Safety regulations: pharmaceuticals, foods

Communications: Telephone, broadband

Early childhood programs

Random breath testing for vehicle drivers

Urban planning

Environment: Renewable energy

Emergency services and disaster assistance

Location of government offices

Deregulation of airlines, taxis


Last updated: 11/07/2017

Cost Benefit