Appendix 7. Financial proxies

1.1 Increased self-esteem

$27,660 (100% of outcome)

Cost of counselling sessions required to achieve the same outcome (assumes need 367 sessions to achieve a full outcome)

The work case managers' conduct with the young people is of similar impact as counselling sessions. Some case managers are trained counsellors.

• Medicare schedule fee for individual session with a non-clinical psychologist 50+ min ($98) multiplied by the average number of hours per individual young person to achieve the change (293 hours).
• The number of hours to achieve the change was estimated using an assumed case load of 28 young people per month, which was spread across medium (34%), high (23%) and very high needs (43%) young people which was based on historic data.
• An assumption was made, based on conversations with the case manager, that high needs young people would take up twice as much time than medium needs individuals and very high needs three times.
• That meant that medium needs client would require 48 hours of support to achieve change, High need 383 hours and Very High needs 449 hours. The average is 293 hours per young person.
• Full value of the outcomes is therefore $98 multiplied by 293 which equals $27,660. This value was proportionately applied to each indicator to capture the exact change that was experience by the program (e.g. value of one step towards the outcome is 25% of the total which equals to $6,915).

Medicare MBS Online¹⁹

1.2 Increased engagement in meaningful activity

$26,201 (100% of outcome)

Independence test for Youth Allowance

Young people qualify for the independence test once they have participated in full-time paid employment for at least 18 months within any two year period. This approximates the market value of engagement in a meaningful activity.

• To apply for an income support from the government, known as a Youth allowance, the applicant must meet the independence test.
• The independence test was calculated by first multiplying hourly minimum wage for 18 years olds ($11.18) and the minimum number of hours per week that must be worked (30 hours).
• The minimum number of weeks required to achieve change was then calculated, based on an assumption that it would take 18 months to achieve change
• The independence test amount was then reached by multiplying the first amount ($11.18 by 30 hours) with the minimum number of weeks (78 weeks), which equals $26,201.
• This value was proportionately applied to each indicator to capture the exact change that was experience by the program (e.g. value of one step towards the outcome is 25% of the total which equals to $6,550).

Fair Work Ombudsman²⁰ Department of Human Services²¹

1.3. More positive connections to others

$12,840 (100% of outcome)

Cost of running an afterschool activity centre

Through a group activity the young people access a support network

• The cost of running an afterschool activity centre for one year was calculated by first adding the estimated costs of running a centre (staff, rent, utilities, food and activities) to reach a total of $107,000.
• Based on the assumption that the centre would have an average of 25 students at the centre, this equals an average cost of $4,280 per student per year.
• An assumption was made that the time required for a student attending the centre to reach similar outcomes would be 3 years, amounting to the full cost per student of $12,840.
• This value was proportionately applied to each indicator to capture the exact change that was experience by the program (e.g. value of one step towards the outcome is 25% of the total which equals to $3,210).

Stakeholder consultation

1.4 Reduced likelihood of detention or incarceration

$19,081 (100% of outcome)

Difference between annual Newstart allowance and minimum wage

Being in detention or jail has a negative impact on employment prospects, increasing the likelihood that the young person will be receiving income support (Newstart allowance) rather than being employed (receiving minimum wage). The difference between the minimum wage and the Newstart allowance amount approximates the value of avoiding unlawful behaviour.

• The value of the minimum wage was determined, which amounts to $622 a week
• Multiplying the minimum wage per week by 52 weeks a year, the value of the minimum wage is calculated as $32,354 per annum.
• Next, the value of the Newstart allowance was determined, based on the maximum amount that could be obtained for a single with no children. This amounted to $13,273 per annum.
• The difference between these two amounts was then calculated, which amounted to $19,081.
• This value was proportionately applied to each indicator to capture the exact change that was experience by the program (e.g. value of one step towards the outcome is 25% of the total which equals to $4,770).

Fair Work Ombudsman²²

2.1 Improve communication between family members

$7,388

Cost of family group therapy for one year (10 sessions)

Cost of treatment addressing family communication issues

• The cost of family group therapy was calculated based on the Medicare Benefits Schedule (as at April 2014) for family group therapy given under the direct continuous supervision of a medical practitioner other than a psychiatrist and involving members of a family and persons with close personal relationships with that family for a group with 4 or more patients. The hourly rate for this was determined to be $147.75.
• An assumption was made that 50 sessions, or approximately once a week for a year, would be required to achieve similar outcomes.
• This amounted to a total cost of $7,388.

Medicare MBS Online²³

2.2 Increase engagement in lives of the young people in their care

$3,014

Average weekly expenditure on recreation by the lowest gross household income quintile in Tasmania

A family's weekly recreational spend is indicative of the cost of families doing activities together, which involves parents engaging with the lives of their children.

• The average weekly expenditure on recreation by the lowest gross household income quintile in Tasmania was determined to be $57.97 per week.
• An assumption was made that a year, being 52 weeks, was the time required by the families to achieve similar outcomes.
• This amounted to a total cost of $3,014.

Australian Bureau of Statistics (ABS)²⁴ Stakeholder consultation

3.1 Increased sense of pride from contribution to community

$8,512

Adjusted cost of volunteer time contributed by a community mentor to the program

The community mentors who volunteer their time for the young people in the program improve their perception of the young people as a result of interacting with them. Value is reduced by a percentage to reflect the assumption that the community mentors who engage with the young people in the program started with some positive perception of the young people

• The hourly cost of volunteer time was calculated based on the minimum wage in Australia, being $16.37 per hour.
• An assumption was made about the time required for a community mentor to achieve a similar outcome through volunteering their time and providing ongoing support during the formative/developmental years of a young person. It was assumed that this would require a volunteer contributing 2 hours per week for 5 years, amounting to 520 hours of time.
• This amounted to a total cost of $8,512.

Fair Work Ombudsman Stakeholder engagement

4.1 Reduction in anti-social behaviour

$3,324

Additional cost of policing to monitor anti-social behaviours of young people in the community

Time reallocated towards other activities, as a result of decreased need in the community to patrol at night and maintain safety

• The additional cost of policing was calculated by first determining the average annual base wage for a Constable Level 3 in the New South Wales Police Force, being $68,414 per annum.
• An assumption was made, based on police data, that a police officers would work an average of 38 hours per week, which amounts to an average hourly wage of $34.62
• Next, the percentage of time dedicated to policing "anti-social behaviour" on the street per annum was determined. To do this, it was assumed that one incident per month occurred (12 incidents per annum), which took 4 hours to resolve and required 2 police officers to address.
• To determine the value of time dedicated to policing "anti-social behaviour", the police officer's hourly wage ($34.62) was multiplied by 96 (being 12 x 4 x 2) which amounted to a total of $3,324.

NSW Police²⁵

4.2 Decreased number of young people offending

$5,180

Average costs to the justice system per young person offending (excluding costs associated with policing antisocial behaviour)

Aggregate of police costs, court costs and juvenile justice costs which are all costs incurred when a young person offends.

• This proxy was broken down into three streams of costs: police costs, court costs and Juvenile Justice costs.

Police costs

• The cost of policing was calculated by first determining the average annual base wage for a Constable Level 3 in the New South Wales Police Force, being $68,414 per annum.
• An assumption was made, based on police data, that police officers would work an average of 38 hours per week, which amounts to an average hourly wage of $34.62.
• An assumption was made that the three main areas of police investigation time would be: (1) picking up young people, interviewing them, filling out paperwork (2) youth justice restorative processes (3) allocating a youth justice worker for community service supervision.
• It was assumed that the average time taken to carry out these activities would be: (1) 4 hours (2) 8 hours (3) 5 hours.
• Using the average hourly wage, it was determined that the cost of policing would be (1) $138 (2) 277 (3) 173, amounting to a total cost of police time of $589.

Court costs

• The average net expenditure per finalisation of a matter in Australian local courts ($404) and District Courts ($4915) was averaged, amounting to $2,660.

Juvenile Justice costs

• The daily cost of supervision of a juvenile offender in the community was determined to be $23.
• It was assumed, based on AIHW Youth Justice data, that the average number of days spent supervising a juvenile offender is 84 days.
• This amounted to total Juvenile Justice costs of $1,932.

This amounted to a total cost to the justice system per young person per annum of $5,180.

Stakeholder interviews, NSW Police website, report on Courts and Tribunal Services by NSW Government -Police & Justice Lawlink²⁶, the Department of Juvenile Justice²⁷ and Australian Institute of Health and Welfare²⁸

4.3 Decreased number of young people in detention

$33,098

Difference between average detention cost and average cost of community based supervision

Resource reallocation: Government can reallocate funding for juvenile justice as a result of participants in the program being supported by the program managers

Average cost of detention

• The average cost of detention per young person was calculated based on the median duration of detention (days) and the total cost of detention per detainee per day.
• The median duration of detention was determined, based on AIHW Youth Justice data, to be 63 days and the total cost per detainee per day was calculated as $556, based on Juvenile Justice data.
• This amounted to an average cost of detention per young person as $35,028.

Average cost of community-based supervision per person

• The median duration of community-based supervision was determined to be 84 days, based on AIHW Youth Justice data. The cost of community-based supervision per day was determined to be $23, based on Juvenile Justice data.
• This amounted to an average cost of community-based supervision per young person as $1,932.

The difference between the average detention cost and average cost of community based supervision was $33,098.

Department of Juvenile Justice²⁹ and Australian Institute of Health and Welfare³⁰

4.3 Decreased number of young people in detention

$35,028

Average cost of juvenile justice stay

Resource reallocation: Government can reallocate funding for juvenile justice as a result of participants in the program avoiding contact with juvenile justice.

• The average cost of detention per young person was calculated based on the median duration of detention (days) and the total cost of detention per detainee per day
• The median duration of detention was determined, based on AIHW Youth Justice data, to be 63 days and the total cost per detainee per day was calculated as $556, based on Juvenile Justice data
• This amounted to an average cost of detention per young person as $35,028.

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