Social Cost-Benefit Analysis in Australia and New Zealand: The state of current practice and what needs to be done

Economics is about choice. The resources available to society from people, machines and materials to environment goods are limited. Scarcity means that using a specific resource for one project or policy will preclude its availability for alternative uses. Project funding should thus be considered against the context of missed opportunities. At the most confronting level, a decision-maker may need to ask how many people will die because the government spent money to reduce bushfire hazards (e.g. Ashe et al., 2012), for example, rather than providing more diagnostic equipment in hospitals. As Gittins (2015) observes, the moral of opportunity cost is: since you cant have everything, choose carefully.