Ryan Bridge: Should we be worried about the business of business cases?

ACT's insistence that the Waikato University doctors school cost was out of whack and based on a poor quality business case seems to have been proven correct. 

Why else would the cost to the taxpayer has shrunk by $200 million? He says it was going to cost us $280 million. 

If he was right, and he's one guy at the cabinet table, how many other business cases don't stack up?

There's an entire lucrative business case industry in Wellington. Some of this work is done in-house by government departments, but much of it is outsourced to the private sector. 

Can we trust these reports? 

MBIE had a business case train wreck a few years back when calculating the benefits of hosting events like the World Dance championships. 

After questions from the media, they realised they'd been incorrectly calculating the cost-benefit analyses of events for two years - more than a dozen applications had to be fixed. 

We've recently had scraps over the benefits of four-laneing to Whangarei. 

This is a problem because if we can't trust the numbers we're basing decisions on, then how can we make proper decisions? 

I hope this Waikato uni med school is a success. They say it'll train an extra 120 doctors a year from 2028. 

But there are three reasons this has the risk of becoming the government's biggest white elephant project. 

1. Other unis say they could have trained the same number of doctors for cheaper

2. Waikato Uni has a tonne of its own money and untapped and unlimited access to loans, so why aren't they fully funding? 

3. The business case was clearly shonky to begin with. 

Perhaps we could spend the remainder on a business case school with qualifications for the getting the numbers right.

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Episode Transcript

Speaker 1 (00:00):
Should we be a little worried this morning about the
business of business cases? David Siemil from ACT kicked up
of fuss about the Wycutter University Doctors School cost. He
said the cost was out of whack based on a
poor quality business case, and he seems to have been
proven correct, does he not? Why else would the cost
of the taxpayer have shrunk from two hundred and eighty

(00:22):
million dollars to eighty million dollars a two hundred million
dollar saving if he was right, and he's one guy
at the cabinet table. How many other business cases don't
stack up? There's an entire lucrative business case industry in Wellington.
Some of the workers done in house by government departments,
of course, but much of it is outsourced to the
private sector. Can we trust these reports? MB had a

(00:46):
business case train wreck a few years back. You might
remember this. They were calculating the benefits of hosting events
like the World Dance Championships, and questions from the media,
they went back and redid their sums. Realized they had
been in directly calculating the cost benefit analyses of events
for two years. More than a dozen applications had to

(01:08):
be fixed. We've recently had scraps over the benefits of
four laning, two fung aday and this is a problem
because if we can't trust the numbers we're basing decisions on,
then how can we make proper decisions. I hope the
Wykota Uni Med School is a success. They say it'll
train in extra one hundred and twenty doctors a year.
That sounds fantastic, but there are three signs this is

(01:29):
a risk of becoming a white elephant project for the government.
One other unis say they could have done it cheaper. Two,
Wykata Uni has tons of its own money and the
ability to tap into debt. Why aren't they funding it?
And three the business case was clearly a bit shonky
to begin with. For more from Early Edition with Ryan Bridge,
listen live to News Talks at b from five am weekdays,

(01:52):
or follow the podcast on iHeartRadio.