Appendix A: Parameters and Further Information
This appendix provides information on the parameters used in producing this Budget Paper.
Budget Paper No. 1, Budget Strategy and Outlook 2015‑16, Statement 2: Economic Outlook, provides information on the forecasting approach used in the 2015‑16 Budget.
Population
Population data are used to distribute funding between the states and in the calculation of annual growth factors.
Estimates of state populations
Table A.1 sets out the state population series used in this Budget Paper.
| million | NSW | VIC | QLD | WA | SA | TAS | ACT | NT | Total |
|---|---|---|---|---|---|---|---|---|---|
| 2014 | 7.578 | 5.896 | 4.762 | 2.607 | 1.693 | 0.516 | 0.389 | 0.247 | 23.687 |
| 2015 | 7.682 | 6.002 | 4.848 | 2.686 | 1.709 | 0.517 | 0.395 | 0.252 | 24.091 |
| 2016 | 7.791 | 6.112 | 4.937 | 2.770 | 1.725 | 0.519 | 0.401 | 0.257 | 24.511 |
| 2017 | 7.899 | 6.223 | 5.026 | 2.854 | 1.742 | 0.520 | 0.408 | 0.262 | 24.935 |
| 2018 | 8.009 | 6.335 | 5.117 | 2.939 | 1.758 | 0.521 | 0.414 | 0.267 | 25.361 |
The state populations for 2014‑15 to 2018‑19 are Treasury estimates of the population of each state on 31 December in the respective year. They are constructed using the latest demographic data available from the Australian Bureau of Statistics (ABS) and Treasury assumptions. These assumptions are in respect of fertility, mortality, net overseas migration and interstate migration.
Fertility
For 2015‑16 Budget, the Treasury fertility assumption is that the Total Fertility Rate (TFR) will equal 1.900 babies per woman in 2014 and remain stable for the remainder of the projection period. This assumption is unchanged from the 2014‑15 Budget and is consistent with that in the 2015 Intergenerational Report.
Mortality
The mortality assumptions are based on the medium assumptions used in the ABS Population Projections, 2012‑2101 (cat. no. 3222.0). In these assumptions, a continuing decline in mortality rates across Australia, with state differentials persisting, is assumed. Overall, life expectancy is assumed to improve to the year 2018 at the rate observed over the period 1981 to 2011.
Net overseas migration
Table A.2 shows the net overseas migration assumptions used in this Budget Paper.
| 2014 | 2015 | 2016 | 2017 | 2018 | |
|---|---|---|---|---|---|
| Net overseas migration, Australia | 219,098 | 237,750 | 250,000 | 250,000 | 250,000 |
State shares of net overseas migration are estimated by using a weighted average of the three most recent observed years — 2011, 2012 and 2013 — with weights of one, two and four respectively.
Interstate migration
Similar to state shares of net overseas migration, the Treasury's estimates of net interstate migration are based on a weighted average of the three most recent observed years — 2011, 2012 and 2013 — with weights of one, two and four respectively. Due to data lags, the 2014 observation includes an assumption for the December quarter based on weighted averages of arrivals and departures for December quarters 2011 to 2013.
| NSW | VIC | QLD | WA | SA | TAS | ACT | NT | Total | |
|---|---|---|---|---|---|---|---|---|---|
| 2015 | -13,500 | 5,400 | 8,200 | 7,100 | -3,500 | -1,700 | -100 | -1,900 | - |
| 2016 | -13,500 | 5,400 | 8,200 | 7,100 | -3,500 | -1,700 | -100 | -1,900 | - |
| 2017 | -13,500 | 5,400 | 8,200 | 7,100 | -3,500 | -1,700 | -100 | -1,900 | - |
| 2018 | -13,500 | 5,400 | 8,200 | 7,100 | -3,500 | -1,700 | -100 | -1,900 | - |
Wage, price and cost indices
Table A.4 shows the wage, price and cost indices used in this Budget Paper, rounded to the nearest quarter of a per cent.
| per cent | 2014‑15 | 2015‑16 | 2016‑17 | 2017‑18 | 2018-19 |
|---|---|---|---|---|---|
| Consumer Price Index | na | na | na | 2 1/2 | 2 1/2 |
| Wage cost index - 1 | 1 3/4 | 1 1/2 | 1 1/2 | 1 1/2 | 1 1/2 |
| Wage cost index - 6 | 2 1/4 | 1 1/2 | 2 | 2 | 2 |
Data sources
The information in Part 4, Appendix B and Appendix C of this Budget Paper is consistent with the ABS Government Finance Statistics reporting framework for the public sector.
Commonwealth data are sourced from the Commonwealth Government Final Budget Outcomes, ABS, and Commonwealth Government Consolidated Financial Statements. See Budget Paper No. 1, Budget Strategy and Outlook 2015‑16, Statement 10: Historical Australian Government Data, for more information.
State data for 2014‑15 onwards are sourced from states' 2014‑15 mid‑year financial reports, with the exception of Victoria and Northern Territory which is sourced from the respective 2015‑16 Budgets.
The 2015‑16 Budget also includes revisions to Commonwealth Government budget aggregates that improve the accuracy and comparability of the data through time. See Budget Paper No. 1, Budget Strategy and Outlook 2015‑16, Statement 10: Historical Australian Government Data, for more information on these revisions.
Further information
Several publications of the ABS also provide information that is relevant to analysing federal financial relations, including:
- Australian Demographic Statistics (cat. no. 3101.0);
- Population Projections, 2012‑2101 (cat. no. 3222.0);
- Taxation Revenue, Australia (cat. no. 5506.0);
- Government Finance Statistics, Australia (cat. no. 5512. 0);
- Australian System of Government Finance Statistics — Concepts, Sources and Methods (cat. no. 5514.0);
- Information Paper: Developments in Government Finance Statistics (cat. no. 5516.0); and
- Information Paper: Accruals Based Government Finance Statistics (cat. no. 5517.0).
Several publications by the Commonwealth Grants Commission can also provide information relevant to the analysis of federal financial relations relating to the distribution of GST revenue. In relation to the 2015‑16 financial year, the relevant publication is Report on GST Revenue Sharing Relativities — 2015 Review.