The Treasury encourages important public sector decisions to be informed by cost benefit analysis. This helps decision-makers to compare different options.
The Treasury is using its Living Standards Framework (LSF) to support the Minister of Finance to deliver Budget 2019. We have integrated key elements of the LSF into the Budget requirements and guidance for agencies.
The required wellbeing analysis covers the LSF elements of current and future wellbeing, as well as risks and resilience. The wellbeing analysis is supported by fit-for-purpose cost benefit analysis, so the Treasury has also updated its cost-benefit analysis (CBAx) tool to include the intergenerational wellbeing domains.
Each of the outcomes within the model is linked to one or more of the 12 domains of current wellbeing. This means that the CBAx procedures now require agencies to describe the impact of their proposed initiatives on the relevant areas of wellbeing.
Within the Impact Assessment Statement, there is the ability to describe any impact on the four capitals or any impact on risk and resilience. In this way, the CBAx process will cover all three elements of the LSF – current wellbeing (12 domains), future wellbeing (four capitals), and risk and resilience – and Budget bids can be assessed from a wellbeing perspective.