The Natural Heritage Trust and the National Action Plan for Salinity and Water Quality were major national policies focused on land and water degradation and nature conservation in Australia. These programs fell a long way short of achieving their stated goals. It is proposed that to be able to spend their considerable public funds in cost effective ways, they would have needed a number of particular characteristics. Among other things, they needed to prioritise investments well, consistent with an appropriate role of government, and based on analyses that integrated good quality bio-physical and socio-economic information. They needed to select policy mechanisms that would be appropriate for the circumstances. The incentives created by program rules and procedures should have encouraged environmental managers responsible for program delivery to pursue environmental outcomes cost-effectively. However, the programs did not satisfy these criteria. Prospects for improving matters in the new national program, Caring for our Country, are discussed. It will be difficult to deliver outcomes cost-effectively in the new program for reasons that include capacity constraints in government agencies, time pressures on policy development, and political priorities of governments.
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