In the 1990s, the general manager of a modest-sized professional baseball team based in Oakland decided that he needed to do things differently. Realising that his franchise's payroll was dwarfed by wealthy rivals like the New York Yankees, Billy Beane opted to ignore conventional wisdom and analyse raw data carefully to buy undervalued players in the market.
Initially dismissed by many pundits as madness, the Oakland A's ruthless drive for efficiency meant that his team could not only compete with but beat teams like the Yankees. Beane's managerial approach, detailed in the popular book Moneyball by Michael Lewis, has applications far beyond winning baseball games, and that includes government expenditure.
Prioritising public spending according to a sound evidence base sounds so simple. But again and again in Australia we see that tax dollars aren't being spent efficiently, and illicit drug policy is the perfect example. As things stand, Australian governments spend in excess of $1.7 billion annually combating illicit drugs. This includes police detection and arrests for drug crimes, policing the borders of Australia for importation, prevention programs, treatment services and harm reduction strategies.
In most areas of policy a spend of this size would be based on the best available evidence but that isn't the case here. From the total pot of $1.7 billion almost 65 percent is spent on supply reduction via law enforcement. But just 22 percent is spent on treatment, 9.5 percent on prevention and 2.2 percent on harm reduction.
If we were to start again with fresh eyes and take an evidence-based approach we would find that our priorities are questionable. Despite an increase in detections, arrests, seizures and increased sentences there is no evidence that these measures have had any real impact. Just last week the New South Wales Crime Commission revealed that the wholesale price of illicit drugs has dramatically fallen recently because more and more product is being successfully imported into Australia.
In contrast, evidence from around the globe tells us that substance abuse treatment provides a greater return on government investment than enforcement interventions. This is because a person who is undertaking rehabilitation is less likely to have a substance misuse problem and less likely to be involved in drug-related crime. The disparity is enormous. In the United States, a RAND Policy Research Centre study concluded that treatment is estimated to be 10 to 15 times more cost-effective than enforcement interventions at reducing serious drug-related crime.
The evidence is in, but we seem quite happy to ignore it.
Last December, in response to the release of the National Ice Taskforce report, the Turnbull Government announced that new funds will be directed towards rehabilitation and grass roots responses to help communities get on top of Ice. But we still don't know whether this "new" money will be sourced from previous Budget cuts to existing drug and alcohol treatment programs. The sector remains in a state of chaos. As things stand Non-Government Organisation treatment services still don't know whether they will be funded beyond the end of this financial year.
This is troubling but we certainly aren't the only ones capable of getting it wrong. Those driving the phenomenon of Moneyball for government estimate that less than $1 out of every $100 of United States government spending is backed by even the most basic evidence that the money is being spent wisely.
That is the very reason why some United States politicians, policy makers and government funded frontline workers are taking a fresh look at government spending -- which totals $US 6.6 trillion annually -- and applying the Moneyball mindset. In Australia, we can do the same when it comes to expenditure on complex problems such as illicit drugs policy.
But this can only be achieved if governments increase their reliance on data and creatively draw on this evidence base to drive innovative solutions that deliver better outcomes. We must opt for policy solutions based on solid evidence and pull money away from strategies and practices that simply aren't working. By unshackling new ideas we can change the way government operates and change peoples' lives.
Billy Beane was able to convince his sceptics once the A's went on an unprecedented winning run of 20 games. It changed the way major league front offices did business. Ninety-seven percent of baseball teams now employ analytics professionals to make better business decisions. Surely if a baseball team is concerned about maximising value for money, governments should be doing the same when seeking to combat illicit drug use.