CBAx
Transforming cost benefit analysis practice
CBAx – helping the government to compare the costs and benefits of different initiatives to assess
which will have the most powerful impact on raising living standards for New Zealanders.
The Solution
The Treasury created CBAx, a practical tool for government
agencies to use to evaluate and compare the long-term
impacts – to the individual and society – of different initiatives
(‘apples to oranges to … feijoas’).
How does
CBAx work?
CBAx is a spreadsheet tool that includes a database of dollar
values for a wide range of social sector impacts. The value of
these impacts are applied to quantify the costs and benefits
for an initiative.
The results of the CBAx analysis can then be presented by
agencies in a consistent manner, helping government make
informed decisions.
The Result
Part of the success of CBAx has been the learning and support
provided by the Treasury to enable agencies to build their cost
benefit analysis capability.
Value of Impact $
Value for Money =
Cost of Investment
As well as providing a detailed Outputs
Summary, CBAx calculates and displays the
net benefits of an initiative over time...
Cumulative net benefit
120,000
100,000
$000 (real)
To transform cost benefit analysis practice across
government and promote a results-focused and evidencebased approach to investment decisions.
80,000
60,000
40,000
20,000
0
-20,000
2016
2021
2026
2031
2036
2041
2046
2051
2061
NPV of economic impact across sectors
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
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More than 60 CBAx models were submitted in Budget 2016.
It is the first time that consistent, transparent and comparable
Cost Benefit Analyses have informed budget decisions.
“The Ministry of Health produced CBAx analyses for Budget 2016. Using Treasury’s CBAx tool
encouraged the Ministry to be clear about the impacts of health interventions on individuals,
other sectors of government, and the wider economy. The process of quantifying and monetising
expected impacts into costs and benefits helped sharpen our internal debates on the strength
of our evidence, the plausibility of our assumptions, and the transparency. The Ministry is now
wanting to use the disciplines, insights and collegial behaviors we applied in the CBAx process to
influence the way we design interventions and do policy analysis more generally.”
Amanda Burgess and Sarah Hogan, Ministry of Health
2056
...and the economic impact across sectors.
Project Lifetime NPV
The Aim