This article was written by Rehana Thowfeek, Co-Founder & Director, Arutha. Arutha is an economic research and civic education organisation established in 2022, with a primary focus on public debt and taxation. This article is an adaptation of a paper published by the author in the Bandaranaike Academy for Leadership and Public Policy (BALPP) Policy Tribune Vol 1 Issue 3 in June 2025. The original paper is accessible here: https://balpp.com/publications/
In March, I had the opportunity to visit two of Australia’s most influential government institutions: the Productivity Commission (PC) and the Office of Impact Analysis (OIA). These visits, part of a training program in Australia, offered a window into how Australia systematically approaches policymaking—an experience that left me reflecting deeply on the contrasts with Sri Lanka and the urgent lessons we must heed.
Sri Lanka’s recent crises have laid bare the dangers of ad-hoc, opaque policymaking. As fatigue and frustration mount among citizens, the need for systematic, transparent, and evidence-driven decision-making has never been more urgent. Australia’s institutions show that such a culture is possible—and that its dividends are measured not just in economic growth, but in public trust and social resilience.
The Productivity Commission
The Australian Productivity Commission (PC) is a model of independence and transparency in policy advice. Established under its own legislation, the PC is tasked with providing independent research and advice to the government on economic, social, and environmental issues. Its commissioners, appointed by the Governor-General for fixed terms, are insulated from direct political influence, ensuring that their recommendations are based on rigorous analysis rather than fleeting political priorities.
What distinguishes the PC is not only its independence but also its commitment to transparency and community-wide perspectives. The PC’s processes are open: draft reports are released for public comment, and public hearings and workshops are integral to its inquiries. Reports are tabled in Parliament and made accessible to the public, fostering trust and informed debate.
This model is not just theoretical; it is operational. The PC’s work covers a spectrum from government-commissioned inquiries to self-initiated research, always with an eye on improving productivity, reducing unnecessary regulation, and considering the interests of the entire community—not just select industries or groups. The result is a body whose advice is respected, even when it challenges prevailing government views.
For Sri Lanka, which has considered establishing a similar commission, the lesson is clear: independence must be more than a slogan. It requires legislative safeguards, fixed appointments, and a culture of transparency. Without these, any productivity commission risks becoming another arm of political patronage rather than a guardian of the public interest.
The Office of Impact Analysis
The Office of Impact Analysis, housed within the Department of the Prime Minister and Cabinet, is another cornerstone of Australia’s evidence-based policymaking. The OIA administers the government’s Impact Analysis framework, ensuring that every significant policy proposal is subjected to rigorous scrutiny before it reaches Parliament.
The OIA’s process is methodical and demanding. Agencies must answer a set of probing questions: What is the problem? Why is government intervention needed? What are the policy options? What are the net benefits and costs? Who has been consulted? How will success be measured? The OIA coaches agencies through this process, providing feedback and requiring revisions until the analysis meets its standards. The final impact assessment—along with the OIA’s verdict—is published, adding a layer of public accountability.
Crucially, while a policy proposal does not legally require a “pass” from the OIA, in practice, serious consideration by Parliament is contingent on meeting these standards. This system, though bureaucratic, acts as a bulwark against poorly conceived policies and ensures that decisions are grounded in evidence, consultation, and transparent cost-benefit analysis.
Sri Lanka’s Policy Gaps
The contrast with Sri Lanka’s policymaking process is stark. While some government agencies in Sri Lanka engage in consultation, it is often perfunctory—a box to be ticked rather than a genuine effort to gather diverse perspectives. Feedback is rarely incorporated, and the same narrow group of stakeholders are repeatedly consulted, creating echo chambers and non-inclusive policies.
Recent history has shown the costs of this approach. The Supreme Court’s findings on Sri Lanka’s economic crisis highlighted how major decisions—such as drastic tax cuts and the overnight ban on chemical fertilizers—were made without adequate consultation or analysis, leading to disastrous outcomes for the economy and society. Had these policies been subjected to a framework like Australia’s IA, their flaws would likely have been exposed before implementation.
Lessons and a Path Forward
Australia’s approach offers several lessons for Sri Lanka:
- Institutional independence: Policy advisory bodies must be protected from political interference through legislation and fixed-term appointments.
- Transparency and consultation: Public input and transparent processes are essential for building trust and improving policy quality and outcomes
- Evidence-based analysis: Every significant policy should be subjected to rigorous impact analysis, considering a range of options and their net benefits.
- Accountability: Publishing assessments and requiring public justification for decisions increases accountability and deters arbitrary policymaking.
Implementing such frameworks in Sri Lanka need not wait for sweeping institutional reforms. Piloting an “Impact Analysis Unit” within the Ministry of Finance or National Planning Department, using a simplified version of Australia’s IA framework, could be a pragmatic first step. Mandating public consultation periods for major bills and training public servants in cost-benefit analysis would further entrench a culture of evidence-based policy.
The cost of Sri Lanka’s inaction in undertaking such systematic action is plain to see; the decision to cut taxes in 2019, for instance, done with limited consultations, triggered off an economic crisis that has had severe social implications (such as rising child malnutrition). Therefore, Sri Lanka can ill-afford more policy missteps. The time to is ripe for change.
Leave a Reply