1. Policy modelling for small areas Presentation to Department of Planning and Community Development, Victoria Presenter: Robert Tanton Position: Research Director, Social Inclusion and Small Area Modelling team Date: 31 July 2009

2. 2 Format ●Introduction to the Social Inclusion and Small Area Modelling (SISAM) team at NATSEM ●Evidence based policy ●Projections of populations for small areas (service delivery) ●Cost/Benefit analysis of policy modelling

3. 3 Other presentations today ●Housing ●Social Exclusion

4. 4 Introduction to SISAM ●New team formed this year ●Concentrate on social inclusion and small area modelling (spatial microsimulation) ● Robert Tanton – Research Director ● Justine McNamara – Children and Families team ●WWW.NATSEM.CANBERRA.EDU.AU/SISAMWWW.NATSEM.CANBERRA.EDU.AU/SISAM ● Links to all papers, online maps, etc

5. 5 What does SISAM do?

6. 6 Evidence based policy ●The Government’s agenda for the APS ● “Today I want to discuss seven elements of the Government’s vision for the future Australian public service: –3) Developing evidence-based policy making processes as part of a robust culture of policy contestability”  (Kevin Rudd, Address to Heads of Agencies and Members of Senior Executive Service, 30 April 2008)

7. 7 Limits to evidence based policy ●Part of a complex process ● Also consider politics, public mood and opinions ●… but policy modelling will give some idea as to cost of policies, who benefits, and can affect public mood and opinion ●Evidence based policy? Or evidence informing policy? ● Is policy based purely on evidence? Or should evidence inform policy?

8. 8 Research informing policy ●Sandra Nutley (Professor of Public Management, University of St Andrews): ● “if research is used to inform policy, what works best is interactive and ongoing processes and relationships between policymakers and researchers” ●At a practical level, round-tables or workshops are seen as a cost effective, safe haven way of sharing ideas, analyses or perspectives. ● Meredith Edwards, “Research shouldn’t stop at a report”, The Public Sector Informant, p. 28

9. 9 Models NATSEM has to study service provision and the effects of policy change ●SpatialMSM project ● 6 year grant with 4 States ● Developing a model to estimate and project populations requiring certain services ● Links microsimulation model of tax/transfers with spatial microsimulation ●Policy modelling ● Impacts of policies in 2 ways –Model policy change before happens –Given current policies, projections of groups requiring service provision

10. 10 Modelling policies not yet implemented ●Small area impacts of ● Commonwealth Government’s change to the single age pension – was implemented after this paper written ● Changes to FTB taper rates ● Who affected by stimulus package (ie, which groups and what areas got most) – impact of policy post-implementation

11. 11 Where old singles benefited from pension increase

12. 12 Where and who got most from stimulus package ●99% of sole parent families gained the most an average of $46.81 per week ●95% of married couples with dependants gained an average of $46.30 per week ●56% of married couples with no dependants gained an average of $26.74 per week ●55% of single persons gained an average of $17.31 per week

13. 13 Effect of stimulus package by area

14. 14 Forecasts of groups requiring service provision ●Identify where services needed in future ● Small area forecasts of families with children and both parents working ● Small area forecasts of aged single people

15. 15 Estimated percentage growth in number of 3 – 4 year old children with all parents working, 2006 – 2027, Melbourne

16. 16 Estimated percentage growth in number of people aged 70+ living alone, 2006 – 2027, Melbourne

17. 17 Later this year ●Projections of wealth ● Mainly home ownership and superannuation

18. 18 Funding ●Model developed with Australian Research Council and State partners (Vic, NSW, Qld, ACT) ●Now a mature and tested model ●Can be used for commissioned research

19. 19 Future ●Collaborations with States ● Work with States to model different policies or client groups ● Provide results in focus groups to talk through results ● Which client groups cost most in future? ●Costs ● When modelling conducted, doesn’t cost much more to do for one State compared to all States ● Collaborative costing model with all States? ● Cost about $60,000 for research, written report and focus groups - split between a number of States

20. 20 Cost/Benefit analysis ●How much does a policy with unintended consequences cost? ● Making things much worse for low income families compared to high income families – was this intended? ● Making thing worse for different areas – will rural areas be affected worse? Or inner city? Was this intended?

21. www.natsem.canberra.edu.au Questions/Comments/Discussion