Cost-Effectiveness

Government agencies are expected to develop and implement a range of sound, quality measures of performance, including cost-effectiveness. Cost-effectiveness is part of the wider picture of departmental performance. In this regard, our work on cost-effectiveness will be encompassed within the development of a performance assessment framework and performance information support systems within Customs.

Cost-effectiveness for Customs can be expressed as the total cost of specific border interactions (outputs) that result in particular outcomes, such as a ratio of costs to outcome, and the relative effectiveness of producing those outcomes. Customs has already completed important developmental work on cost-effectiveness measures, which covered a range of possible measurement options.

The work identified two important issues. First, estimating all the costs of specific interactions (outputs) and the ascribed values (measures) of outcomes attributed to the outputs, assuming that causal relationships can be isolated with some certainty. Second, identifying appropriate alternative border interactions and comparable external benchmarks for estimating relative cost-effectiveness.

Building on our current understanding, Customs’ approach to determining cost-effectiveness is to apply a focus across three broad cost-to-outcome domains of Protection, Facilitation and Revenue. Within these domains, we will endeavour to establish suitable parameters for quantifying total costs and values for specific outcomes.

Outcome	Cost	Impacts
Facilitation Protection Revenue	Trade and travellers processing. Interactions, investigations, prosecutions, and surveillance. Collecting GST, duty and excise revenue.	Legitimate trade and travel facilitated. Community protected from external threats. Revenue collected.

We will also work with other government agencies on cost-effectiveness measures where there is commonality of outputs and outcomes.