We’re delighted to share that Lytton Advisory has been appointed to the Queensland Government’s new Professional Services Preferred Supplier Panel (GGS0111-24), which begins on 1 September 2025.
Craig Lawrence, Managing Director, notes, “This panel connects government buyers with trusted partners, and we’re proud to be recognised for the value we bring through our economic advice and consulting. It’s a great opportunity to continue supporting Queensland Government agencies with thoughtful analysis and practical solutions.”
For us, this is about more than a panel appointment — it’s about deepening our partnerships and helping government teams tackle the important challenges ahead. We’re excited to get started and look forward to working with agencies right across Queensland.
Accurately determining the period of appraisal in cost-benefit analysis is vital for effective decision-making, particularly for finance ministry officials in Pacific Island nations. This strategic understanding significantly influences economic stability and growth in the region.
The period of appraisal refers to the time span over which a project’s costs and benefits are evaluated. Getting this right shapes the analysis and directly affects the perceived feasibility of a project. Selecting an appropriate timeframe ensures all relevant costs and benefits are considered, especially for long-term projects like infrastructure or environmental programs that might produce benefits years later.
The appraisal period should align with the expected life of the asset or investment. For projects with long lifespans, the period should cover decades to fully capture their potential benefits. Both short- and long-term economic benefits need to be accounted for. Furthermore, a well-defined appraisal period is significant in determining the relevance of residual values in project evaluation. Residual values represent the remaining worth of an asset at the end of the appraisal period. If this period is too short, the analysis may underestimate the project’s true value by overlooking residual worth.
Understanding the distinction between economic and financial analysis is also crucial. Financial analysis focuses on investor cash flow and profitability, while economic analysis examines the broader societal impact, including externalities. This broader perspective often requires a longer appraisal period than financial analysis.
It’s also essential to differentiate between the period of appraisal and the tenor of funding, which is the timeframe over which borrowed funds are repaid. Misalignment between the two can skew financial assessments and lead to underestimating a project’s long-term value.
When managing multiple projects, consistency in the appraisal period is vital. Using a consistent time horizon across similar projects enables meaningful comparisons and strategic planning, ensuring investment decisions align with national economic goals.
Equipped with this understanding, finance ministry officials can ensure investment strategies prioritise financial viability and broader economic benefits over each project’s entire lifespan.
Talofa! Lytton Advisory is pleased to announce that its Managing Director – Craig Lawrence – has been contracted by the Asian Development Bank as an Economist / Cost Benefit Analysis (CBA) expert to assist the Government of Samoa’s Ministry of Finance (MoF)
Craig will be working with MoF officials to help strengthen the capacity of the Economic Policy and Planning team to produce timely cost-benefit analyses, improve data collection and provide advice to support decision making.
I have been doing cost benefit analyses for a few years now. The concept is deceptively simple but provides a solid framework for insightful decision making.
It is a tool used to assess potential costs and benefits of a decision or project, usually in monetary terms. It is commonly used to evaluate the feasibility and potential impact of projects, policies and regulations.
Recently I have been thinking about the usefulness of the approach given that many major project often seem to float past this analysis.
Here are five epiphanies that might help CBA evangelists:
The true value of a decision lies not just in its financial cost and benefit, but also in its impact on people and the environment.
CBA forces us to weigh the pros and cons, but it’s important to remember that some benefits and costs are difficult to quantify and may have long-term effects that are not immediately apparent.
It should not be the sole factor in decision-making, as there may be intangible or ethical considerations that cannot be easily measured in financial terms.
CBA is a useful tool, but it is important to remember that it does not account for future uncertain events. Therefore, it should be used in conjunction with other decision making tools for a comprehensive evaluation.
Cost-benefit analysis can be misleading if it only looks at short-term financial gains and ignores long-term social and environmental costs. A more holistic approach should be used that accounts for all the potential impacts of a decision.
These are just some of the insights about CBA, but there are more that might be organisational or project relevant.
Is CBA a key driver of your organisation’s project appraisal process or just another compliance element in developing business cases?
Recently, the Federal Government decided that it does not want to interfere in the market for the private provision of rapid antigen tests in the middle of a pandemic.
Preserving the right of private businesses to profit during the pandemic at the potential expense of the vulnerable is simply not a great policy.
What are the economics behind this, and what might they be missing?
Rather than assume it is simply a cop-out, it seems it is a naive application of Economics 101. However, the policy is not well thought through.
The implicit assumption is that there are no significant positive externalities in subsidising the cost of rapid antigen tests. That is the information benefits of knowing whether you have Covid and taking personal responsibility by appropriately isolating to avoid infecting other people are neither insignificant nor irrelevant.
The US National Bureau of Economic Research recently concluded that much of the decline in economic activity in the US associated with Covid-19 came from self-protective behaviour. As Australia re-opens its economy, this is likely to become a potential handbrake when uncertainty about managing the virus is widespread in the community. RATs provide a frontline but partial solution to this self-protective behaviour.
Research by the Royal Australian College of General Practitioners suggests there is a case for substituting PCR tests with RATs, and saving public funds. The benefit comes from earlier knowledge of infection and people isolating earlier, lessening the spread of the virus.
The government’s approach presupposes that rapid antigen tests are a consumer item rather than a public health consumable. A bit like asking people to bring their own oxygen bottles to hospital. Now that is something we have seen elsewhere.
The Australian Chamber of Commerce and Industry recognises the information value of RAT, advocating free rapid testing will improve business and consumer confidence, assisting in reopening the economy after a series of lockdowns and international lock outs. This will help minimise the extremely disruptive impact of snap closures and held businesses reduce risks to employees, customers and the community.
The government has argued that it does not want to provide ‘free’ rapid antigen tests. However, that is misleading. Publicly provided tests are paid out of taxation revenues. Either way, we are paying for these tests.
I find it difficult to believe that the Commonwealth cannot secure bulk supplies of these tests and distribute them at less cost than I could purchase one at full retail prices.
Also, it is surprising to me that given the extensive use of rapid antigen tests elsewhere, the Federal Government has not provided more effective leadership on this.
The Australian Competition and Consumer Commission is awake to the risk of price gouging and has indicated it will ‘name and shame’ those that do.
With Covid case numbers soaring again, the test and trace systems are simply not up to the task given volumes. Rapid antigen tests provide a viable alternative to enable people to be informed about their own health status and act accordingly. That has to benefit their families, friends and co-workers and, ultimately, the wider society and economy.
I was thinking that we were all in this together. The Federal Government still needs to catch up. We can’t afford another strollout in a fast-moving medical environment. Time and again, we have seen political processes simply cannot match the pace of this pandemic.
Let’s not think Covid has passed just yet. People are still dying.
Thanks to my colleague and good friend, Gene Tunny, for recently inviting me onto his Economics Explored podcast to talk about the circular economy. Listen to the podcast here:
As we increasingly incorporate a lot of the environmental externalities into the incentive architecture of the market economy, opportunities to improve our stewardship of finite natural resources will improve. Not only do we have to do things better, the approach underlying the circular economy encourages us to do better things.
L-R: Nick Behrens, Craig Lawrence, Gene Tunny, Hamish Bain.
Intra regional trade and the effectiveness of 147 active zones (economic, industrial and free) in the Middle East will be under consideration by Lytton Advisory. The firm has been given a mandate to develop advice for the Gulf Cooperative Council Secretariat on the next phase of closer economic cooperation between member states. This will involve a baseline review of existing economic zones, careful analysis of customs arrangements between Gulf states, an examination of World Trade Organisation implications and economic modelling of preferred solutions. Lytton Advisory is looking forward to working with colleagues from Maxwell Stamp in the Middle East, building on engagements in the region over the past three years.
Last month I introduced day two of the 2018 PNG Investment Conference in Brisbane. This included an overview of some key PNG infrastructure sectors and an observation that the country needed to increase its infrastructure spending.
The Economic Society of Australia recently polled a number of senior economists on its National Economic Panel, posing the following question:
“As interest rates are at low levels by historical standards, federal and state governments, despite their public debt levels, should be borrowing more than they currently are to invest in infrastructure”.
Just over 70% of respondents either agree or strongly agree, and on a confidence-weighted basis, 75% agree or strongly agree. This is a rare consensus.
But …
It is worth reading the individual responses. This strong consensus is backed by a requirement for solid cost-benefit analysis, case-by-case consideration of projects and a recognition that any infrastructure spending is not automatically a ‘good thing’.
Clear thinking is a prerequisite for good economics. This leads to improved decision making, and that creates better outcomes.
The next time someone claims to be making an economic decision or proposes an economic course of action; dissect their claim or assertion. You do not need to be an economist to do that. There are five simple signs for good economic decision making:
Decision to be made is articulated
Available choices are considered
Measurable objectives are described
Input variables are identified
Relationship between variables is determined
Without these famous five, the risk is the economic decision may be dead on arrival.
Lytton Advisory 