14th Annual Meeting of the OECD Network on Fiscal Relations Across Levels of Government, 19-20 November 2018

1. Jonathan Coppel
Commissioner
Annual Meeting of the OECD
Network on Fiscal Relations
Paris, 19-20 November, 2018
Session 5: The role of
benchmarking in federal systems

2. 2
What will we cover?
20 Minutes
Rationale for
benchmarking
Approaches to
benchmarking
Role of the
PC
Role of the
OECD
Questions

3. 3
Rationales for intergovernmental benchmarking
To improve service delivery
To foster ‘competitive federalism’
Rationale
1
2
3 To improve transparency and accountability

4. 4
Approaches to intergovernmental benchmarking
Approaches
Top down
• Origins stem from the private sector
• Coercive, often with sanctions
• Less appropriate for federated States
• Inclusive and collegiate
• Quid pro quo for untied grants
• Deployed in Australia
Bottom up

5. 5
Intergovernmental benchmarking in Australia
Role of the PC
• A long history
• Role of the Productivity Commission
Reviewing National Agreements
Report on Government Services (RoGS)
Taken on role of COAG Reform Council
What Works reporting
• Possible developments
Establish a COAG Economic Reform
Council

6. Productivity Commission 6
Distinguishing features of the RoGS Review
An innovative governance structure
Tops-down/bottoms up
Independent Chair & Secretariat
Broad scope
Education, health, justice, community services
Coherent performance indicator framework
Equity, effectiveness and efficiency
Guiding principles
Role of the PC
Collegiate and consensual exercise

7. Productivity Commission 7
RoGS performance indicator framework
Program or service
objectives
Outcomes
External influences
Input Process Output
Service
Technical efficiency
Cost-effectiveness
Program effectiveness
Role of the PC

8. Productivity Commission 8
Example of a technical efficiency indicator
Government real recurrent expenditure per FTE student, government schools
2006-07 to 2015-16 (2015-16 dollars)
0
5
10
15
20
25 2006-07
2015-16
2006-07
2015-16
2006-07
2015-16
2006-07
2015-16
2006-07
2015-16
2006-07
2015-16
2006-07
2015-16
2006-07
2015-16
2006-07
2015-16
NSW Vic Qld WA SA Tas ACT NT Aust
$thousand/student
Government recurrent expenditure (excluding UCC) User cost of capital
Role of the PC

9. Productivity Commission 9
Example of an outcome indicator
0
20
40
60
80
100
NSW Vic Qld WA SA Tas ACT NT Aust
Percent
Low socioeconomic status Medium socioeconomic status High socioeconomic status
Year 12 certificate attainment rates, by socioeconomic background, 2016
Role of the PC

10. Productivity Commission 10
Benefits to governments and policy impact
Governments have benefited from:
being involved in the process
learning about their own jurisdictions
learning about other jurisdictions
Other channels:
increased public (media) accountability
community sector advocacy
academic and consultant research
Role of the PC
Policy impact
sizeable gains, but hard to attribute

11. 11
The role of the OECD
Role of the OECD
Common policy challenges
OECD comparative advantage
Facilitating ‘collegial’ benchmarking
1
2
3

12. 2
Some ideas for the Fiscal Network
Role of the OECD
• On the relationship between federalism and
benchmarking
• To what extent can benchmarking add value
to existing federal arrangements?
• What is the role of citizens and service users
in benchmarking?
• How to set up the governance of
benchmarking regimes?

13. Questions
13
Thank you
Jonathan.coppel@pc.gov.au