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The Treasury's CBAx Tool

CBAx is a spreadsheet model by the Treasury that contains a common database to help agencies monetise impacts and do return on investment

The Treasury first released CBAx, a cost benefit analysis (CBA) tool, in October 2015. The CBAx version for Budget 2017 was released in July 2016. In October 2016, the CBA template, CBAx model and CBAx guidance was updated to reflect a reduction in the discount rate.

The Treasury provides a CBA tool called CBAx

The Treasury encourages important public sector decisions to be informed by cost benefit analysis. See the Treasury's guidance on undertaking a CBA

To help compare different options in New Zealand, the Treasury has developed a CBA tool called CBAx. CBAx is a spreadsheet model that contains a common database to help agencies monetise impacts and do return on investment analysis.

CBAx contains a database of New Zealand specific publicly available data that organisations can use to value impacts. An impact value provides a numerical value in relation to one or more impacts of an initiative. In some situations a value may be a cost, in others it could be a benefit or a saving. Examples include the costs of an emergency department visit, the cost of the Jobseeker Support benefit and increased income for individuals. The values are adjusted to reflect a common time period. 

The CBAx spreadsheet tool has been designed specifically with social sector agencies in mind, but can be used to help calculate return on investment for many initiatives. The CBAx tool makes it easier for people to do in-house CBAs.

The Treasury welcomes suggestions on the CBAx tool and would like to learn from practical experiences of applying CBAx. Over time, the Treasury will improve and update the tool. We welcome feedback and insights from people within and outside the public sector. Please contact CBAx@treasury.govt.nz with comments and suggestions.

CBAx is a spreadsheet model with an impact values database

The CBAx tool is a spreadsheet model which provides:

  • a common model for organisations to use when analysing costs and benefits of initiatives
  • a common basis for assumptions when quantifying and monetising the impacts of different proposals
  • a common database to help organisations estimate broader societal impacts, making analysis quicker and providing consistent assumptions.

We recognise that there will always be limitations to a tool like CBAx. To be able to use the CBAx tool, organisations need to quantify impacts and success rates, for example the number of people expected to gain employment, based on the best available data and evidence about the relevant impacts of an initiative. There will sometimes be gaps in the evidence for how effective an initiative might be, for example when trying something new.

The advantage of the CBAx tool is that it makes assumptions explicit, and values different types of costs and benefits in a consistent way. This provides the basis for a more informed discussion between different options. Discussions should consider all impacts including unquantified and unmonetised impacts, as well as those impacts able to be monetised using the CBAx tool.

CBAx impact values database

CBAx contains a database of New Zealand specific publicly available data that organisations can use to value impacts. An impact value provides a numerical value in relation to one or more impacts of an initiative. In some situations a value may be a cost, in others it could be a benefit or a saving. Examples include the costs of an emergency department visit, the cost of the Jobseeker Support benefit and increased income for individuals. The values are adjusted to reflect a common time period.

The Treasury invites people to suggest data and information for inclusion in the CBAx database. This may be information that is available and that can be shared, or it may be a request for values that people would find helpful to have included in CBAx. The Treasury anticipates refreshing CBAx on an annual basis.

The Treasury was pleased to host Daniel Fujiwara in August 2016.  The visit included a Treasury Guest Lecture on Social Impact Values.

User-driven improvements to the CBAx tool

As agencies build their CBA capability, the CBAx tool remains familiar and has no structural changes. The model improvements are in response to user feedback and suggestions. The main improvements included in the Budget 2017 version are: updated impact values database, extension of possible impacts from 15 to 50, the option to segment the target population for an impact, and inclusion of an evidence base rating for each impact. The discount rates have reduced, and are consistent with the rates in October 2016.

The CBAx guidance material will be updated and extended regularly. The CBAx Tool User Guidance cbax-guide-oct16.pdf (1,358 KB) has been significantly updated to include tips from Budget 2016 experiences and helpful material. The CBA template cba-template-oct16.doc (324) was updated in October 2016. This template proved a useful framework for agencies in Budget 2016. It strengthens the evidence base information for decision making. Applied examples of CBAx are available as part of the Budget 2016 Informtion Release

Last updated: 
Wednesday, 14 December 2016