beyond pt 0 23/1

Appendix C
MONASH base case forecasts
This Appendix explains the detailed assumptions that underpin the base
case forecasts. That is, the view of the economy as it would be without
greater use of e-commerce.
C.1 MONASH methodology
As indicated in Exhibit C.1, the model incorporates the views of specialist
organisations into the base case simulation. For this study the modellers
have used:
• Macroeconomic forecasts from the Treasury and Access Economics. 23
• Forecasts for the quantities and prices of agricultural and mineral
exports from the Australian Bureau of Agricultural and Resource
Economics (ABARE), 24 and forecasts of inbound tourism numbers
from the Tourism Forecasting Council (TFC). 25
• Forecasts of changes in industry production technologies (i.e., in inputoutput
coefficients) and in household preferences from the Centre of
Policy Studies (CoPS).
• Results from Dixon and Rimmer (1999) 26 on the effects of the GST.
Exhibit C.1
The MONASH forecasting system
Macro Forecasts
(ACCESS)
Exports
(ABARE and TFC)
Structure of technical
and taste changes
(CoPS)
MONASH forecast
simulation
1997–98 to 2015–16
Changes in tax rates
under GST package
Output and employment forecasts
The following portion of this Appendix is divided into two sections.
Section C.2 describes forecasts for macroeconomic variables and for the
volumes of traditional exports. It also describes assumptions for changes
in industry production technologies and in household tastes. The forecasts
for industry output and employment are discussed in Section C.3.
23 The Treasury forecasts come from Treasury (1999), Budget Statements, 1999-2000: Budget Paper No. 1.
AGPS, Canberra. These cover the years 1998–99 (estimates) and 1999–2000. For variables not covered
by the Treasury forecasts and for all variables between 1999–2000 and 2005–06, forecasts from Access
Economics (1999), Five year Business Outlook, March Quarter were used. Long-term trends are used for
the years 2005–06 to 2009–10.
24 Forecasts to 2003–04 come from ABARE (1999), Australian Commodities, March quarter. For the
remaining years of the forecast period we use long-term trends.
25 See Tourism Forecasting Council (1998), Forecast, Vol. 4, No. 2.
26 Dixon, P.B. and Rimmer, M.T. (1999), ‘The Government’s Tax Package: Further Analysis Based on the
MONASH Model’, Report prepared for the Senate Select Committee on a Next Tax System, mimeo,
January 25. The Central Estimates from that report were used.
64