ANU’s Centre for Social Research and Methods has developed a new microsimulation model of the Australian Tax and Transfer system, PolicyMod. This new model is capable of modelling most aspects of the Australia personal income taxation and welfare system including the current and alternative policy settings. The model is based on ABS survey data and uses a range of other data from the Australian Bureau of Statistics and other government departments to improve the accuracy and timeliness of the model. The model is initially a static model in that the model considers the impact of policy on the ‘day after’ meaning that the model does not attempt to model behaviour changes that may result from policy changes.

The model is well suited to modelling the household and individual impacts of the existing policy and alternative policy for both the current financial year and over the forward estimates. The model is also capable of estimating the impacts out to 2055. The impacts modelled can be viewed either through the distributional model or the hypothetical (cameo) model. The distributional model considers the entire Australian population and is capable of estimating the impacts of policy for a vast array of variables such as family type, income deciles, housing tenure and social security payment type. The cameo model provides policy impact analysis for selected families such as single parents with a range of private incomes. The cameo model details the disposable income and effective tax rates schedule as private income or hours worked change.

The standard outputs from the model would include the ‘winner’s and ‘losers’ from policy change and an estimate of the overall fiscal impact on the Federal Budget. The model is flexible enough to enable this analysis over the current year or any set of years into the future. CSRM will continue to develop PolicyMod into the future and we have a particular interest in developing a dynamic and behavioural capability.

ANU CSRM is also a member of the International Microsimulation Association General Assembly.

Download the ANU PolicyMod flyer (300 KB).

For more information please contact csrm.comms@anu.edu.au