Prime Minister Malcolm Turnbull's $1.1 billion flagship innovation agenda was poorly designed and lacked evidence to support its claims about economic growth, a scathing report from the Auditor-General has found.

Auditor-General Grant Hehir has criticised the policy's foundations, and attacked the quality of advice from the public service that underpinned the policy, which was announced in December 2015 – less than three months after Mr Turnbull became Prime Minister.

In a report that reads as if it could be a script for the ABC television public service satire Utopia, the Auditor-General said: "The policy logic that can be inferred from this model is that: if the proposed actions are taken, they will reduce the barriers, which will move Australia towards the vision, which in turn will help achieve the objective of increasing productivity and diversifying the economy".

Mr Hehir found "much of the advice was general in nature and did not present quantitative or in-depth analysis of problems, expected impacts or how outcomes would be measured".