Policy Modelling for Small Areas: Maximizing Social Inclusion and Service Provision

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. 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. Other presentations today • Housing • Social Exclusion

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/SISAM • Links to all papers, online maps, etc

5. What does SISAM do?

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. 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. 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. 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. 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. Where old singles benefited from pension increase

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. Effect of stimulus package by area

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

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

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

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