Synergies Economic Consulting undertook a cost benefit analysis to assess the economic impact of programs delivered by Beyond Billabong, an organisation which works with highly disadvantaged young people. Beyond Billabong’s programs have been shown to achieve positive outcomes for children and young people who have experienced trauma and abuse. We assessed the economic benefits to the community of these programs which in turn, demonstrated that the value and efficiency of government funding could be maximised when targeted at these programs.
Childhood trauma and abuse have a significant impact on the person that has experienced it, their families and the wider community. For those adults who have survived this experience, they can suffer severe and sometimes debilitating consequences for the remainder of their adult life. It was estimated that if the impacts of child abuse alone were addressed (accounting only for child sexual, physical and emotional abuse), it could save Governments in the order of $6.8 billion per annum. For all forms of childhood trauma, the minimal average budget savings could be around $9.1 billion per annum. There is a wealth of evidence that clearly establishes the negative impacts of unresolved childhood trauma on both physical and emotional health and society as a whole. These negative impacts include social, emotional and cognitive impairments; adoption of health-risk behaviours; disease, injury and disability; and early death.
Beyond Billabong services
Early intervention of highly disadvantaged young people at risk of disengaging from society can lead to significant positive impacts. Beyond Billabong’s Southern Cross Centres provide a safe, secure environment that addresses the complex physical, social and emotional needs of these young people. Using an evidence based, trauma-informed care approach, Beyond Billabong work to empower participants by providing a ‘wrap-around’ model of care that facilitates access to therapeutic and support services across health, safety and emotional wellbeing; culture; and education, training and employment.
There are costs associated with delivering this model of care to young people in need however these programs provide a benefit to not only the individual but the community as a whole. As such, it is expected the government funding to these programs would receive a net benefit.
We undertook a cost benefit analysis (CBA) to assess the economic impact of Beyond Billabong’s services. CBA can play an important role in policy development and the efficient allocation of resources across programs. The key role of CBA in health and social services is to maximise the efficiency of government funding by identifying those programs that can be shown to yield significant net benefits to the community.
There are practical challenges for conducting CBA in the social policy context. The most significant of these are:
Impacts are inherently difficult to quantify (e.g. improvements in quality of life);
Considerable discretion must be exercised when assessing and quantifying potential impacts;
Analysis must be conducted over a long time horizon in order to take into account the full economic benefit from the (relatively) brief intervention; and
Impacts will differ according to individual differences in each participant’s characteristics and response to the program. This results in significant variability of outcomes across all participants and complicates the task of quantifying the benefits.
Given these challenges, the benefits of the program were identified as the reduced or avoided long-term costs associated with childhood trauma and abuse and increased economic output resulting from the improvement in productivity of participants. The starting point for estimating these benefits was therefore the potential lifetime trajectory for a person who has experienced childhood trauma and abuse that does not participate in the Beyond Billabong program. We then considered how this trajectory might be altered by that person’s experience with Beyond Billabong.
We firstly identified the Beyond Billabong target group (i.e. children and young people who suffered trauma and abuse, including Indigenous young people). We then established typical life outcomes of the target group and how these outcomes changed following participation in a Beyond Billabong program. Where possible, economic values were estimated for incremental changes in outcomes (e.g. increase in lifetime wages and reduced incarceration costs).
The net present value of these economic impacts along with reported costs of the programs was then calculated to determine the net benefit to the community of a typical participant’s experience with the program.
Analysis of the quantifiable benefits and costs of Beyond Billabong’s programs revealed that the program delivers a net benefit of $67,430 for every participant in the program over their working lifetime. This is equivalent to a return of $1.67 for every $1 spent on the programs or a 67% return over the program cost. This benefit is achievable for each year of the program. Participation in a program costs $100,448 per participant on average. The analysis quantified benefits made up of $119,589 in productivity impacts, $45,500 in avoided incarceration costs to government and $2,790 in avoided government care allowance payments. Furthermore, the sensitivity analysis showed that the net benefit remained positive under a range of more conservative assumptions.
There were also a range of benefits that were identified and assessed qualitatively due to the lack of sufficient quantitative data. For participants, these included improved quality of life; reduced likelihood of suicide and avoided consequences for friends and family; and reduced costs of divorce from improved relationships and family cohesion. For government and the community, these included avoided health service and formal care costs; other justice system costs; avoided costs for victims of crime and improved quality of life for relations and friends of participants.
The CBA assessment of the economic impact of programs delivered by Beyond Billabong suggests that these programs have a net benefit to the community. The quantified benefits exceeding the program costs was equivalent to a return of 67 per cent over the cost of the program for each year the program runs.
Our assessment demonstrated that government investment in these types of programs and models of care have the potential to provide significant economic benefits while maximising the efficiency of public funds.