The Lifetime Distributional Impact of Government Health Outlays

This article examines the lifetime redistributive impact of government health outlays and finds that such outlays redistribute income from the lifetime rich to the lifetime poor and from men to women.     

Moving towards an Improved Microsimulation Model of the Australian Pharmaceutical Benefits Scheme

Finding ways of curbing government expenditure on the Pharmaceutical Benefits Scheme (PBS) while maintaining social equity and access to ‘essential’ medicines is at the centre of ongoing public debate. This article describes a microsimulation model of the PBS that simulates current and future use and costs of PBS medicines under existing and different PBS policy settings, and estimates the distributional effects of policy changes. The article outlines future developments that will extend the current model to include health outcomes. Adding health outcomes will enable the debate on PBS sustainability to be advanced beyond the prevailing cost‐containment mentality to consider not only the costs of pharmaceutical use but also the benefits that result from the use of these medicines.     

The Distributional Impact of Selected Commonwealth Outlays and Taxes and Alternative Commonwealth Grant Allocation Mechanisms

This article examines the redistributive impact of Commonwealth outlays and taxes (including outlays directed through and to the States)and two possible alternative systems of distributing Commonwealth funding amongst the States.     

The Distributional Impact of Selected Commonwealth Outlays and Taxes and Alternative Commonwealth Grant Allocation Mechanisms: Comment

This article explains why fiscal equalisation is needed to achieve horizontal equity in a federation, why horizontal equity is needed for efficient across–State location choices, and its connection to community preferences.     

Reducing Child Poverty in Britain: An Assessment of Government Policy 1997–2001

The reduction and eventual elimination of child poverty has become one of the central objectives of the new Labour Government in Britain. Measures to achieve this by changing taxes and benefits and promoting paid work are described. Their effects are assessed using a micro-simulation model. The policy changes will achieve a significant reduction in child poverty but it will remain in 2001 substantially higher than in 1979 and much higher than in most European nations.     

The Distributional Effects of Inflation in Australia 1980–1995

This paper examines the distributional effects of price changes in Australia over the period 1980 to 1995, using equivalent variations and equivalent incomes. The Linear Expenditure System is applied to each of a range of income groups rather than using a single set of parameters. The price changes are found to impose a relatively higher burden on lower income groups in some years, although in other years the higher income groups were affected relatively more. The distribution of equivalent incomes has the highest inequality in years of high overall inflation. However, the effects on inequality are low: the highest increase in inequality as a result of differential price changes is less than one per cent.     

Population Ageing and Projections of Government Social Outlays in Australia

This paper makes new projections of government social outlays for Australia. The calculations suggest that government social outlays will increase considerably as a percentage of GDP over the next 50 years, by 7.3 per cent of GDP in the base case. This is a greater increase than that found by previous investigators. Over 60 per cent of this increase will occur between 2011 and 2031, the years when the baby boom generation retires. The major contribution to this increase will have come from increased government outlays on social security. Lower rates of net immigration are shown to yield an even larger increase in the percentage of government social outlays in GDP. The paper also considers the disincentive effect of taxation and the effect of in-creasing the age of retirement. However, notwithstanding the trends suggested by the projections, the paper argues that there are a number of reasons to be sanguine about the implications of ageing on the share of government outlays in GDP.     

A new model to evaluate the long-term cost effectiveness of orphan and highly specialised drugs following listing on the Australian Pharmaceutical Benefits Scheme: the Bosentan Patient Registry

Abstract

Background: Pharmaceutical subsidy schemes are under increasing pressure to evaluate the cost effectiveness of new highly specialised and orphan drugs for universal subsidy. In the absence of longer-term outcome data, drug sponsors often present modelled data, which can carry a significant level of uncertainty over longer-term projections. Risk-sharing schemes between drug sponsor and government may provide an acceptable method of balancing the uncertainty of longer-term cost effectiveness with the public demand for equitable and timely access to new drugs.

Methods: The Bosentan Patient Registry (BPR) is an example of a unique risk-sharing model utilised in Australia aiming to provide clinical evidence to support the modelled predictions, with the registry survival outcomes linked to future price. Concomitant medication, health and vital status data was collected from clinicians, government health departments and death registries.

Results: The BPR has identified a number of issues surrounding registry governance, ethics and patient privacy, and the collection of timely and accurate data, which need to be addressed for the development of a generic registry model for systematic evaluation.

Conclusion: The success of a generic drug registry model based on the BPR will be enhanced by addressing a number of operational issues identified during the implementation of this project.

Material in this paper was presented in an oral presentation to the National Medicines Symposium: Quality Use of Medicines, 7–9 June 2006, Canberra, Australia.     

The Australian Economy in 1983–84

This article was jointly prepared by the staff of the Review. A preliminary set of forecasts was presented to members of the Institute's Econometric Forecasting Project on 1 June 1983. The current set of forecasts, with revisions to include the March quarter national accounts and the details of the Loan Council meeting, were completed on 12 August 1983.     

Economies of Scale in Australian Banks 1978–1990

This paper examines economies of scale in Australian banks. A bank multi-product cost function is estimated using a translog functional form with data drawn from twelve banks spanning the period 1978 to 1990. Different formulations of the model are estimated. Results prove sensitive to estimation assumptions and data definitions however they support the presence of economies of scale for Australian banking in this period     

Distributional Preferences and the Incidence of Costs and Benefits in Climate Change Policy

We explore the relationship between willingness to pay (WTP) for climate change mitigation and distributional preferences, by which we mean individuals’ opinions about who should be responsible for climate change prevention and whether the share of climate change impacts borne by the poor is a cause for concern. We use 1,770 responses to an online stated preference survey. The domestic costs in our survey’s policy choice scenarios are expressed as a set of randomized shares across four different payment vehicles, and the international cost shares are randomized across four groups of countries. We also elicit respondents’ perceptions of the likely regressivity of climate change impacts under a policy of business-as-usual. WTP is higher when larger cost shares are borne by parties deemed to bear a greater responsibility for mitigation, and when respondents believe (and care) that the impacts of climate change may be borne disproportionately by the world’s poor. That WTP for an environmental policy depends on the distributional consequences of the policy is an unsettling result: efficiency assessments are typically assumed to be separate from equity considerations in most benefit-cost analyses.     

THE EFFECTS OF RECENT STRUCTURAL, POLICY AND EXTERNAL SHOCKS TO THE AUSTRALIAN ECONOMY, 1996/97–2001/02

The period 1996/97–2001/02 was characterised by rapid economic growth and substantial structural change. This paper analyses this period in detail, relying on results from historical and decomposition simulations with the MONASH model. Changes in the level and composition of economic activity are traced to the effects of a number of government policies, external shocks, and domestic structural changes. The influence of policies such as the GST and tariff reduction proves small, with much of the change in the size and structure of economic activity attributable to technical change.     

Sources of Australian Labour Productivity Change 1950–1994

This study examines sources of Australian labour productivity change from 1950 to 1994. Time-series data are used to estimate a model capturing the interaction between labour productivity, fixed capital, human capital, telecommunications, trade openness and international competitiveness. Attention is given to the time-series properties of these data. ADF tests for unit roots are employed, and the sensitivity of the tests to non-linear transformations and structural breaks are considered. Estimates suggest that policies that promote investment, economic integration and international competitiveness will improve short-run labour productivity. In the long run, fixed capital accumulation is the dominant source of productivity improvement.