The calculation of DEC used in the Audit does not assess the following economic concepts that are more commonly considered in detailed project evaluations:
■ Consumer surplus - this is not counted in national accounts data, which forms the basis for much of the modelling in the Audit. The concept is more appropriately applied and measured as part of individual project assessments.
■ Externalities - infrastructure can generate so-called externalities (both positive and negative) that are non-priced or under-priced impacts on third parties. Although these are an important consideration in individual project assessments, it was not practical to address these impacts for all items of infrastructure identified in the Audit.
■ Taxes - taxes are removed in traditional cost-benefit analysis, and are removed from the DEC calculations.
■ Indirect and flow-on impacts - although these benefits and impacts are often claimed by project proponents and others, these concepts were not included in the assessment for the following reasons.
■ Measurements of indirect impacts can lead to double counting the benefits.
■ Even where the approach to measuring indirect impacts is well founded, it is more appropriately applied at a project level.