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An Auditor-General's report has criticised a $1 billion innovation packaged announced by Prime Minister Malcolm Turnbull.Credit:AAP

He reserved his strongest criticism for the supposed economic benefits of the package,which was,among other things,supposed to improve the commercialisation of research.

"A number of the proposals that involved significant expenditure aimed at transforming parts of the innovation system[and] relied on assertions rather than evidence. There was no specific guidance on the standard of evidence required to support individual measures or the package as whole,"the report found.

The $1.1 billion policy included $459 million over four years for research infrastructure,$106 million in tax incentives for people who invest in the early stages of research commercialisation and $15 million for the CSIRO's innovation fund.

The policy was a cornerstone of Mr Turnbull's early period as Prime Minister,when he consistently promoted the concepts of"innovation"and"agility"as central to Australia's success.

But,the Auditor-General found,decisions about the package were made based on inadequate information provided by the Department of Prime Minister and Cabinet and the Department of Industry,Innovation and Science.

"The initial advice did not indicate the evidence base to support the changes proposed or provide any further elaboration on how a new agenda would'transform'the economy,"Mr Hehir found.

He also questioned whether there was any evidence of significant barriers to innovation,saying the taskforce set up to advise the government"provided limited evidence"of any impediments.

The Department of Prime Minister and Cabinet told the Audit Office in June this year the size of the $1 billion innovation package had been"too small"to warrant any modelling to establish whether it had made any contribution to the economy.

"[The Department of Prime Minister and Cabinet] further advised the ANAO[Australian National Audit Office] that it is Treasury's advice that it would be hard to come up with an authoritative way of modelling many of the measures given the disparate nature of the measures in the package,"the report said.

Had modelling been done,the report suggested,expectations about the policy's effectiveness might have been more realistic.

"A number of the proposals that involved significant expenditure aimed at transforming parts of the innovation system relied on assertions rather than evidence. In many cases,there was also a lack of specificity in the outcomes or expected impacts being sought,making it difficult to determine how success would be measured."

Martin Parkinson,a former head of the Treasury and a close friend of Mr Turnbull,took over as the secretary of the Department of Prime Minister and Cabinet in January 2016.

In response to the Auditor-General's questions and report,Dr Parkinson said he was"strongly of the belief that[Prime Minister and Cabinet],and indeed the entire APS[Australian Public Service],needs to do better at policy development and implementation".

"In particular,there is a need to be rigorous in basing policy on a foundation of strong evidence,to be open to different perspectives,to question our ideas and to consider the challenges of implementation in policy design,"Dr Parkinson wrote.

"I support the recommendations and agree that there is an ongoing need to test and refine our policy frameworks to ensure they clearly articulate an acceptable standard of analysis and evidence."

A spokesman for the Prime Minister declined to comment.

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