Abstract

PolicyMod is a microsimulation model of the Australian Tax and Transfer system developed by the Centre for Social Research and Methods at the Australian National University. PolicyMod can model most components of the Australian personal income taxation and transfer system including existing and alternative policy settings. The model is primarily designed for analysing the distributional impacts of policy change in the previous years, current year and over the forward estimates (typically 3 or 4 years beyond the current financial year). However, the model can project the policy impacts out to 2059-60. PolicyMod is also capable of cameo analysis (policy analysis of hypothetical families). The model is a static (day-after) model and can be executed in SAS Enterprise Guide or Base SAS.

The distributional model considers the entire Australian population and can estimate the policy impacts for a vast array of variables such as family type, income deciles, housing tenure and social security payment type while the cameo model provides policy outcomes for selected families like single parents for a range of private incomes1.

The major components of PolicyMod are the PolicyMod basefile creation process and ‘alternative’ basefile datasets which are generated from the original basefiles after running the alternative policy code and parameters.

PolicyMod is based on the ABS Survey of Income and Housing (currently SIH 2019-20). The model allows users to expand the standard base to include some important additional parts of the Australian tax and transfer system such as indirect taxes and GST.

This documentation provides the details on how the model has been developed, the main steps involved in the basefile creation and policy modules, the process to run the model and a brief description of how to analyse the policy outcomes of PolicyMod.

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