Performance measurement and programme evaluation have been promoted as a central mechanism of recent Australian public sector (APS) reform. Outlines recent reforms in the APS and identifies links between evaluation and performance information. Identifies the major issue of credibility, when performance information is produced internally and not verified externally. A lack of performance systems and standards can create difficulties for both internal and external programme evaluations. Concludes that: reforms introduced to evaluate performance in the APS were promoted with high expectations which have only partially been fulfilled; the present system is internally focused with a narrow role for evaluation and a lack of credibility because of the independence issue; the present systems associated with the performance approach and its evaluation are not providing enough information to deal with the tough questions of the effectiveness of government programmes. Proposes that a middle ground between internal and external programme evaluation strategies be adopted. This allows the strengths of internal evaluation to be retained. At the same time, it allows the possibility of improving programme evaluation by adding external independent verification and an extended effectiveness role.