About the Guide to Cost-Benefit Analysis
Cost-Benefit Analysis (CBA) provides thorough, evidence-based analysis to support decision-makers. The NSW Government Guide to CBA sets out the role of CBA in supporting evidence-informed decision-making and provides guidance for practitioners.
CBA looks at estimating the net economic, social, environmental, and cultural benefits of an initiative and expresses them in monetary terms. It's our preferred method for evaluating the relative merit of proposed initiatives. CBA is more than just financial analysis. It's designed to capture both monetary and non-monetary benefits. This helps decision-makers compare initiatives fairly on a like-for-like basis. If some benefits cannot be quantified or monetised, CBA can include a qualitative assessment.
- TPG23-08 NSW Government Guide to Cost-Benefit Analysis (PDF 2.7MB)
- The Business Case Guidelines TPG24-29 (PDF 2.89MB) outlines when a business case, including a CBA, is needed and provides the requirements and guidance for developing a business case.
- The Carbon emissions in the Investment Framework TPG24-34 (PDF 883.11KB) sets out the requirements on including carbon emissions in CBA and presents the carbon values that should be used.
- The First Nations Investment Framework TPG24-28 (PDF 8.77MB) provides a guide to good-practice when working with First Nations peoples and communities on the design, appraisal and evaluation of initiatives.
- The Disaster Cost-Benefit Framework TPG23-17 (PDF 1.78MB) provides guidance on CBA of disaster resilience initiatives. It includes an excel tool that can be used to do a CBA of flood resilience initiatives.
- The Evaluation Guidelines TPG22-22 (PDF 9.31MB) set out mandatory requirements and recommendations for planning and conducting evaluations and includes a technical note on ex-post CBA (PDF 603.57KB).
- Rapid Cost-Benefit Analysis Tool: This can be used complete CBAs and produce net present values, benefit-cost ratios, sensitivity analysis and distributional analysis. It assists with steps 5-7 in the Guide to CBA (PDF 2.7MB).
- Outcome Value Database (OVD): The OVD is a collection of quality assured outcome values and parameters aimed at helping with the estimation of economic and social outcomes in CBA.
- E-Learning modules: The modules are designed to provide users with a basic understanding of CBA and other related Investment Framework polices.
- Quality assessment tools: The tools include resources that may be used to assess and improve the quality of ex-ante and ex-post CBA.
- Market Failure Guide (PDF 1.65MB): When there is market failure - that is, when the market fails to allocate resources efficiently- it is possible for government to intervene. This guide categorises market failures for government policy development and evaluation.
Sector Cost-Benefit Analysis Frameworks
The Centre for Economic Evidence also works with agencies to create sector CBA frameworks. These frameworks provide supplementary guidance to be used alongside the CBS Guide. They outline principles, advice, and parameters to help complete CBAs for initiatives with common features.
Sector CBA frameworks are helpful when there are many similar proposals or when detailed research is needed to define and estimate common parameters. The following current sector frameworks are available:
| Name | Scope | Responsible agency | Access |
|---|---|---|---|
| Guidelines for using cost-benefit analysis to assess coastal management options | Supports development of CBA for coastal management options | Department of Climate Change, Energy, the Environment, and Water | Access the guidelines (PDF 1.03MB) |
| Energy efficiency policy: CBA Framework paper | The Framework Paper can be used for all forms of government policy aimed at end-use energy efficiency, including both ex-ante and ex-post evaluation. Examples of end-use energy efficiency policies include market mechanisms, information programs, regulations, direct subsidies and facilitation services | Department of Climate Change, Energy, the Environment, and Water | Email cee@treasury.nsw.gov.au for access |
| CBA Guide for Justice. A guide to measuring economic and social benefits for justice system proposals. | Outlines principles and guidance for quantifying the benefits of justice initiatives, including how to identify, forecast and value expected benefits | Department of Communities and Justice | Email bocsar.insights@dcj.nsw.gov.au for access |
| Addendum: Cost-Benefit Analysis – ICT and Digital | Provides guidance and practical tips to support the development of CBA for proposed ICT and digital initiatives | Department of Customer Service | Access the addendum (PDF 802.48KB) |
| Cost-Benefit Analysis Framework for school infrastructure investment | Provides specific guidance on the benefits of school investment | Department of Education | Email schoolinfrastructure@det.nsw.edu.au for access |
Guidelines for the economic assessment of mining and coal seam gas proposals and supporting technical notes
| Provides proponents with information on meeting the requirements of section 79C of the Environmental Planning and Assessment Act 1979 and discusses the use of CBA and local effects analysis | Department of Planning, Housing and Infrastructure | Access the guidelines (PDF 293.69KB) and supporting technical notes (PDF 1.2MB) |
| Framework for valuing green infrastructure and public spaces | Provides a standard approach to identify, quantify and value common costs and benefits associated with green infrastructure and public spaces. | Ministry of Health | Access the guide (PDF 1.04MB) |
| Guide to Cost-Benefit Analysis of health capital projects | Guide sets out the principles, concepts, methodology and steps to be used in the evaluation of proposed health capital projects | Ministry of Health | Access the guide (PDF 5.95MB) |
| Transport for NSW Cost Benefit Analysis Guide | Provides recommendations for CBA as part of business cases within the NSW Transport cluster | Transport for NSW | Access the guide |
| Transport for NSW Economic Parameter Values | Suggests economic parameter values for common benefits and costs in transport CBA | Transport for NSW | Access the Economic Parameter Values. |
| Freight Benefit Guidelines | Provides guidance in identifying benefits related to freight initiatives | Transport for NSW | Access the Economic Parameter Values |
| NSW Active Transport Health Model | Provides an evidence-based method to assess the health impacts of active transport infrastructure, such as reducing chronic diseases, improving life expectancy and the savings on healthcare costs. | NSW Ministry of Health | For access go to NSW Health at Active transport in NSW |
| Principles and standard parameters for Cost-Benefit Analysis of investment attraction proposals | Provides a set of agreed assumptions for to estimate of the benefits and costs of an investment attraction proposal | Premier’s Department | Access the parameters (PDF 372.21KB) |
Contact NSW Treasury
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- Post: GPO Box 5469, Sydney, NSW 2001