Demographic and Social Change:
Implications for Education Funding.
Appendix I: Per capita social expenditures by demographic group
Education
Schools
Commonwealth government
expenditures
Total Commonwealth outlays on schools in 1995-96 were
derived from ABS, Government Finance Statistics, 5512.0, 1996-97, Table
13. It was assumed Schools outlays comprised outlays on Primary and
Secondary education outlays plus Other education outlays.
Projections of Commonwealth schools, vocational and other
education, and higher education outlays were based on growth rates
contained in the forward estimates for the relevant sectors from
Commonwealth Budget Paper No. 1, 1996-97 and 1997-98 for the period
1995-96 to 2000-01.
The forward estimates include Student Assistance and
General Administration outlays. These were distributed across schools,
vocational and other education, and higher education sectors as follows.
For the purposes of distributing Student Assistance outlays
we obtained forward estimates of Austudy expenditures classified by
tertiary and secondary sectors from unpublished departmental
administrative records. We assumed all primary Austudy expenditures were
allocated to the schools sector and tertiary Austudy expenditures were
allocated to the higher education and vocational and other education
sectors according to the distribution of Austudy recipients attending
higher education and vocational and other education over the year to
December 1996 where the latter included Austudy recipients in the other
tertiary category. Data on the distribution of Austudy recipients were
derived from unpublished departmental administrative records. We assumed
Student Assistance outlays were distributed across the three sectors of
education in the same proportion as the distribution of Austudy
expenditures across sectors.
General administration outlays were distributed pro-rata
across the schools, vocational and other education, and higher education
sectors as shown by the forward estimates (following the distribution of
Student Assistance outlays across the sectors).
This enabled us to derive, from the forward estimates, a
set of growth rates for Commonwealth outlays in the schools, vocational
and other education, and higher education sectors. These growth rates were
then applied to the ABS estimates of Commonwealth outlays in the base
year, 1995-96 (from Government Finance Statistics, 5512.0, 1996-97, as
noted above), for the respective sectors.
In order to derive projections of Commonwealth expenditures
on schools beyond the forward estimates period from 2001-02 to 2020-21, we
need to combine per capita school expenditures by demographic group with
population projections.
For the schools sector it was assumed that per capita
school expenditures by demographic group were distributed according to the
age distribution of full-time school students, ABS, Schools, Australia,
4221.0, 1995. One drawback of this approach is that it does not actually
record expenditures by age group. There is an implicit assumption that it
costs the same, for example, to educate each primary and secondary
student.
We then combined per capita school expenditures by
demographic group with the relevant population projections (see later for
source) for the period 2001-02 to 2020-21 to derive projections of
Commonwealth expenditures on schools.
State and Local government expenditures
The base figure for state and local government expenditures
on schools in 1995-96 was derived from total State, Territory and Local
government outlays on primary and secondary education plus other education
from Table 29, ABS, Government Finance Statistics, 5512.0, 1995-96 less
Commonwealth grants to the states for primary and secondary education plus
other education for current and capital outlays, Tables 15 and 16,
Government Finance Statistics, 5512.0, 1995-96.
The base figure for State and Local government expenditure
on schools was then distributed across demographic groups according to the
age distribution of full-time school students, ABS, Schools, Australia,
4221.0, 1995, to derive per capita State and Local government expenditure
on schools. These were combined with the relevant population projections
to derive projections of State and Local government expenditures on
schools for the period 1996-97 to 2020-21.
Private expenditures
The base figure for private expenditures on schools was
derived from unpublished data from Table 1, ABS, Expenditure on Education,
5510.0, for private final consumption expenditure in primary/secondary
education and pre-school education in 1995-96.
Per capita private expenditures on schools were derived in
similar fashion to per capita Commonwealth, State and Local government
expenditures on schools. The base figure for private expenditures on
schools was distributed across demographic groups according to the age
distribution of full-time school students. Per capita private expenditures
on schools were then combined with population projections to derive
projections of private expenditures on schools for the period 1996-97 to
2020-21.
Scenarios
The base case scenario for projections of school
expenditures assumed no change in school retention rates and that
expenditures increase in line with population projections and living
standards (GDP per capita). The base year for the projection is 1995-96.
The school retention rate in 1995 was 72.2 per cent ABS, Schools,
Australia, 4221.0. As an alternative scenario it was assumed the Year 12
apparent retention rate in all States increased in line with the highest
apparent retention rate in Queensland of 77.9 per cent, relative to the
base case assumption of 72.2 per cent. The alternative scenario was based
on the latest available data when the projections were prepared (1997),
when the national apparent retention rate was 71.8 per cent. In 1999, the
national retention rate was 72.3 per cent.
Vocational education
Commonwealth government expenditures
Total Commonwealth government expenditures on vocational
education in 1995-96 were derived from Table 4, ABS, Expenditure on
Education, 5510.0, 1995-96, from Commonwealth government outlays on
technical and further education. It was assumed this base year figure
moved forward over the period 1996-97 to 2000-01 in line with forward
estimates for vocational and other education (including some part of
Commonwealth government Austudy and general administration expenditures
allocated to vocational and other education as discussed above).
Commonwealth government expenditures on vocational
education in 2000-01 were distributed across demographic groups according
to the age distribution of clients in vocational programs at 30 June 1996
from Table 1, Australian Vocational Education and Training Statistics : In
detail, 1996, National Centre for Vocational Education Research.
Per capita Commonwealth government expenditures on
vocational education for demographic groups were then combined with
population projections to derive projections of Commonwealth government
expenditures on vocational and other education for the period 2001-02 to
2020-21.
State and Local government expenditures
The base figure for State and Local government expenditures
on vocational education in 1995-96 was derived from State, Territory and
Local government outlays on technical and further education from Table 29,
ABS, Government Finance Statistics, 5512.0, 1995-96 less Commonwealth
grants to the States, Territories and Local governments for tertiary
education, Tables 15 and 16, Government Finance Statistics, 5512.0,
1995-96. Grants to the States, Territories and Local government were
distributed between the vocational and higher education sectors on a
pro-rata basis according to the distribution of intergovernmental grants
between university and technical and further education in Table 3, ABS,
Expenditure on Education, 5510.0, 1995-96.
Projections of State and Local
government expenditures on vocational education for the period 1996-97 to
2020-21 were derived in a similar manner to State and Local government
expenditures on schools. That is, from the base year figure deriving per
capita expenditures for demographic groups, based on the age distribution
of students in vocational programs, and then combining this information
with population projections.
Private expenditures
The base figure for private expenditures on vocational
education was derived from unpublished data from Table 1, ABS, Expenditure
on Education, 5510.0, for private final consumption expenditure in the
post-secondary and tertiary education sectors in 1995-96. Private final
consumption expenditures in tertiary education were distributed across the
vocational and higher education sectors pro-rata according to the
distribution of total government outlays in technical and further
education and the balance of tertiary education respectively in Table 3,
ABS, Expenditure on Education, 5510.0, 1995-96.
Projections of private
expenditures on vocational education for the period 1996-97 to 2020-21
were derived in a similar manner to state and local government
expenditures on vocational education. That is, from the base year figure
deriving per capita expenditures for demographic groups, based on the age
distribution of students in vocational programs, and then combining this
information with population projections.
Scenarios
The base case scenario for projections of vocational
education expenditures assumed no change in vocational education
participation rates and that expenditures increase in line with population
projections and living standards (GDP per capita). As an alternative
scenario it was assumed mature age participation rates, 25 years and over,
doubled. Since per capita expenditures were based on the age distribution
of students in vocational education, a doubling of mature age
participation was modelled by simply doubling per capita expenditures on
vocational education for those aged 25 years and over.
Higher education
Commonwealth government expenditures
The treatment of Commonwealth government expenditures on
higher education differed from that followed for the schools and
vocational education sectors. Prior to the 1996-97 edition of ABS,
Expenditure on Education, 5510.0, net advances to persons for Higher
Education Contributions Scheme (HECS) purposes were included in government
outlays (from the 1996-97 edition, net HECS advances were excluded from
government outlays but shown separately as a financing item) and gross
advances were included in private final consumption expenditure. To avoid
the potential problem of double counting, the broad approach taken here
was to obtain administrative data on government payments to higher
education institutions (comprising grants to institutions plus payments to
institutions from the HECS trust fund) and then make allowance for HECS
payments made by individuals.
Data and forward estimates on total payments to higher
educations institutions (from the Commonwealth government) were obtained
from administrative records for the period 1995-96 to 2000-01. These
estimates included payments to institutions for HECS liabilities
incorporating three elements; HECS liabilities paid to institutions, HECS
upfront receipts paid to institutions and the HECS discount on upfront
payments paid to institutions. Data on total Commonwealth payments were
deflated by projections of CPI from Commonwealth budget papers to derive
estimates of real outlays in 1995-96 prices.
The task then was to subtract some portion of total
Commonwealth payments to higher education institutions, reflecting the
contribution paid by private individuals, and apportion this to private
expenditures on higher education. Administrative estimates indicate that
the HECS share of total Commonwealth payments to higher education
institutions is projected to increase from 23 per cent in 1995/96 to 37.5
per cent by 2006-07 reflecting the changes to HECS arrangements announced
in the 1996-97 Commonwealth Budget. However, some fraction of HECS
payments are still likely to be met by the Commonwealth government rather
than by individuals reflecting the discount on upfront payments and also
that some indvidiuals will default on their HECS payments.
Forward estimates contain estimates of the discount on
upfront payments. We estimate that part of payments from the HECS trust
fund likely to be met by the Commonwealth government as a result of
non-payment of HECS debt by individuals. The Australian Government Actuary
publishes a report on the provision for doubtful debt (Australian
Government Actuary, Higher Education Contributions Scheme (HECS), Report
on Doubtful Debt Provision, various editions). Essentially the increment
in the stock of doubtful debt in any one year is assumed to represent the
payment (flow) made by the Commonwealth government arising from
non-payment of HECS debt. We examined historical trends in estimates of
doubtful debt with a view to forming projections of the likely
contribution to be made by the Commonwealth government in future years for
non-payment of HECS debt.
We assumed that contributions from individuals in the form
of HECS payments would rise from 18.7 per cent of total payments to higher
education institutions (combining grants and payments from the HECS trust
fund) in 1995-96 to 30 per cent by 2006-07 and remain constant thereafter.
Essentially the discount on upfront payments is assumed to be relatively
stable, amounting to 2 per cent of total payments to higher education
institutions and that Commonwealth payments in lieu of non-payment of HECS
debt increase from just over 3 per cent in 1995-96 to around 5 per cent by
2006-07 and remain at that level thereafter. Thus from 2006-07 onwards, we
assume 70 per cent of total payments to higher education institutions are
paid by the Commonwealth government and 30 per cent by private
individuals.
Having established estimates of the Commonwealth
government/private contribution to payments to higher education
institutions we then include some part of Commonwealth government Austudy
and general administration expenditures allocated to higher education as
discussed above to derive forward estimates of Commonwealth government
expenditures on higher education to the year 2000-01. Expenditures in the
year 2000-01 were then distributed across demographic groups according to
the age distribution of higher education students in 1995 (Selected Higher
Education Student Statistics, 1995, unpublished data) to derive a set of
per capita higher education expenditures for demographic groups.
Per capita Commonwealth government expenditures on higher
education for demographic groups were then combined with population
projections to derive projections of Commonwealth government expenditures
on higher education for the period 2001-02 to 2020-21. (Population
projections are assumed to drive the demand for higher education and
therefore total higher education expenditures. This in turn influences
total payments to higher education institutions and our earlier
assumptions about the distribution of these payments between the
Commonwealth government and private individuals are superimposed on top of
the broader trend in higher education expenditures.)
State and Local government expenditures
The base figure for State and Local government expenditures
on higher education in 1995-96 was derived from state, territory and local
government outlays on university education from Table 29, ABS, Government
Finance Statistics, 5512.0, 1995-96 less Commonwealth grants to the
States, Territories and Local governments for tertiary education, Tables
15 and 16, Government Finance Statistics, 5512.0, 1995-96. Grants to the
States, Territories and Local government were distributed between the
vocational and higher education sectors on a pro-rata basis according to
the distribution of intergovernmental grants between university and
technical and further education in Table 3, ABS Expenditure on Education,
5510.0, 1995-96.
Projections of State and Local
government expenditures on higher education for the period 1996-97 to
2020-21 were derived in a similar manner to State and Local government
expenditures on schools. That is, from the base year figure deriving per
capita expenditures for demographic groups, based on the age distribution
of students in higher education, and then combining this information with
population projections.
Private expenditures
There are essentially two components to projections of
private expenditures on higher education: HECS expenditures and non-HECS
private expenditures on fees, student services and the like.
So far as projections of private HECS expenditures are
concerned, there are several factors that are used as input to the
development of the projections, as noted above in the discussion relating
to Commonwealth government higher education expenditures:
- Beyond the forward estimates period, total payments to
higher education institutions (and this includes grants to institutions
plus payments to institutions from the HECS trust fund) are assumed to
grow in line with per capita expenditures by demographic group and
population projections;
-
Private HECS expenditures are assumed to increase from 18.7
per cent of total payments to higher education institutions, to 23 per
cent by 2001-02 and remain at 30 per cent from 2006-07 onwards (this is
superimposed on top of the forward estimates and demographic projections);
So far as non-HECS private expenditures are concerned, once
again there are several factors that are used as input to the development
of the projections. The base figure for non-HECS private expenditures on
higher education was derived from unpublished data from Table 1, ABS,
Expenditure on Education, 5510.0, for private final consumption
expenditure in the tertiary education sector in 1995-96. Private final
consumption expenditures in tertiary education were distributed across the
vocational and higher education sectors pro-rata according to the
distribution of total government outlays in technical and further
education and the balance of tertiary education respectively in Table 3,
ABS, Expenditure on Education, 5510.0, 1995-96. Projections of non-HECS
private expenditures for the period 1996-97 to 2020-21 were derived in a
similar manner to State and Local government expenditures on higher
education. That is, from the base year figure deriving per capita
expenditures for demographic groups, based on the age distribution of
students in higher education, and then combining this information with
population projections.
There is one further factor that contributes to the
projections of non-HECS private expenditures. As part of the reforms to
higher education announced in the 1996-97 Budget, institutions were
permitted to introduce fee-paying opportunities in undergraduate courses,
equivalent to 25 per cent of total enrolments in any course. This policy
change was modelled as an addition to payments to higher education
institutions (grants plus HECS payments), over and above those driven by
the forward estimates and population growth. For the purposes of preparing
the projections, a conservative assumption was adopted that undergraduate
fee-paying opportunities would increase from 1 per cent of total payments
to higher education institutions in 1997-98 and remain at 5 per cent from
2001-02 onwards.
Scenarios
The
base case scenario for projections of higher education expenditures
assumed no change in higher education participation rates and that
expenditures increase in line with population projections and living
standards (GDP per capita). As an alternative scenario it was assumed
mature age participation rates, 22 years and over, doubled. Since per
capita expenditures were based on the age distribution of students in
higher education, a doubling of mature age participation was modelled by
simply doubling per capita expenditures on higher education for those aged
22 years and over.
Health
Projections of government health expenditures were
developed for hospitals, nursing homes, pharmaceuticals and, the medical
services and benefits sectors. Projections of private expenditures were
developed by assuming that the ratio of private to total government health
expenditures in each sector in the base period was held constant over the
projection period.
Hospitals
Commonwealth government expenditures
Total Commonwealth outlays on hospitals in 1995-96 were
derived from unpublished data from ABS, Government Finance Statistics,
5512.0, 1996-97 for category 2513 Other Admitted Patients.
Projections of Commonwealth outlays on hospitals were based
on growth rates contained in the forward estimates for Hospital Services
from Commonwealth Budget Paper No. 1, 1996-97 and 1997-98 for the period
1995-96 to 2000-01.
In order to derive projections of Commonwealth expenditures
on hospitals beyond the forward estimates period from 2001-02 to 2020-21,
we need to combine per capita hospital expenditures by demographic group
with population projections.
For each sector of health it was assumed that per capita
expenditures by demographic group were distributed according to the age
distribution of health patients in each of the sectors. One drawback with
this approach is that it does not actually record expenditures by age
group. There is an implicit assumption that it costs the same, for
example, to treat younger and older patients. For the hospitals sector, it
was assumed per capita hospital expenditures were distributed according to
the age distribution of hospital days over a two week period as shown in,
ABS, National Health Survey, 4364.0, 1995.
We then combined per capita hospital expenditures by
demographic group with the relevant population projections (see later for
source) for the period 2001-02 to 2020-21 to derive projections of
Commonwealth expenditures on hospitals.
State and Local government expenditures
Total State and Local government outlays on hospitals in
1995-96 were derived from unpublished data from ABS, Government Finance
Statistics, 5512.0, 1996-97 for category 2513 Other Admitted Patients )
less Commonwealth grants to the states for hospitals and other
institutional services for current and capital outlays, Tables 15 and 16,
Government Finance Statistics, 5512.0, 1995-96.
The base figure for State and Local government expenditure
on hospitals was then distributed across demographic groups according to
the age distribution of hospital patient days over a two week period, ABS,
Naional Health Survey, 4364.0, 1995, to derive per capita State and Local
government expenditure on hospitals. These were combined with the relevant
population projections to derive projections of State and Local government
expenditures on hospitals for the period 1996-97 to 2020-21.
Private expenditures
Private expenditures on hospitals were derived from the
Australian Institute of Health and Welfare’s (AIHW), Health Expenditure
Bulletin, No. 13, July 1997, but with some adjustments to ensure estimates
of government expenditures from AIHW were consistent with those from ABS,
Government Finance Statistics, 5512.0, 1996-97. First, we take
non-government (private) health expenditures figures by sector for 1994-95
from Table 17, Health Expenditure Bulletin, July 1997 (medical benefits
and services is derived as a residual item with a deduction for tax
expenditures so that the figure for total non-government expenditures in
1994-95 is consistent with the corresponding figure presented in Table 5).
These figures are adjusted pro-rata so that they add to total
non-government (private) expenditures for 1995-96 from Table 5, Health
Expenditure Bulletin, July 1997. Second, there is a further adjustment to
ensure that the non-government/government health expenditure figures from
Table 5, Health Expenditure Bulletin, July 1997 are consistent with ABS
government health expenditures in 1995-96.
Then as for State and Local government expenditure on
hospitals, the base figure for private expenditure on hospitals was then
distributed across demographic groups according to the age distribution of
hospital patient days over a two week period, ABS, National Health Survey,
4663.0, 1995, to derive per capita private expenditure on hospitals. These
were combined with the relevant population projections to derive
projections of private expenditures on hospitals for the period 1996-97 to
2020-21.
Nursing homes
Commonwealth government expenditures
Total Commonwealth outlays on nursing homes in 1995-96 were
derived from unpublished data from ABS, Government Finance Statistics,
5512.0, 1996-97 for category 2530 Nursing Homes for the Aged. Projections
of Commonwealth outlays on nursing homes were based on growth rates
contained in the forward estimates for Nursing Home Subsidies and
Domiciliary Care Services from Commonwealth Budget Paper No. 1, 1996-97
and 1997-98 for the period 1995-96 to 2000-01.
In order to derive projections of Commonwealth expenditures
on nursing homes beyond the forward estimates period from 2001-02 to
2020-21, we need to combine per capita nursing home expenditures by
demographic group with population projections. For the nursing homes
sector, it was assumed per capita nursing homes expenditures were
distributed according to the age distribution of new entrants to nursing
homes. We obtained administrative data from the Department of Health and
Family Services (DHFS) on the age distribution of new entrants to nursing
homes for the fortnight ending 13 June 1997. It is worth noting the flow
of new entrants is not the same as the stock of nursing home residents.
Nevertheless, advice from DHFS is that the age distribution of the flow of
new entrants is likely to be reasonably representative of the age
distribution of all nursing home residents given that the average duration
of stay in nursing homes is of relatively short duration.
We then combined per capita nursing home expenditures by
demographic group with the relevant population projections (see later for
source) for the period 2001-02 to 2020-21 to derive projections of
Commonwealth expenditures on nursing homes.
State and Local government expenditures
Total State and Local government outlays on nursing homes
in 1995-96 were derived from unpublished data from ABS, Government Finance
Statistics, 5512.0, 1996-97 for category 2530 Nursing Homes for the Aged.
It was assumed there were no Commonwealth grants to the States for nursing
home expenditures.
The base figure for State and Local government expenditure
on nursing homes was then distributed across demographic groups according
to the age distribution of the flow of new entrants to nursing homes as
described above to derive per capita State and Local government
expenditure on nursing homes. These were combined with the relevant
population projections to derive projections of State and Local government
expenditures on nursing homes for the period 1996-97 to 2020-21.
Private expenditures
Private expenditures on nursing homes in the base period
1995-96 were derived in similar fashion to private expenditures on
hospitals as described above. Then as for State and Local government
expenditure on nursing homes, the base figure for private expenditure on
nursing homes was then distributed across demographic groups according to
the age distribution of new entrants to nursing homes to derive per capita
private expenditure on nursing homes. These were combined with the
relevant population projections to derive projections of private
expenditures on nursing homes for the period 1996-97 to 2020-21.
Pharmaceuticals
Commonwealth government expenditures
Total Commonwealth outlays on pharmaceuticals in 1995-96
were derived from unpublished data from ABS, Government Finance
Statistics, 5512.0, 1996-97 for category 2560 Pharmaceutical medical aids
and appliances. Projections of Commonwealth outlays on pharmaceuticals
were based on growth rates contained in the forward estimates for
Pharmaceutical Services and Benefits from Commonwealth Budget Paper No. 1,
1996-97 and 1997-98 for the period 1995-96 to 2000-01.
In order to derive projections of Commonwealth expenditures
on pharmaceuticals beyond the forward estimates period from 2001-02 to
2020-21, we need to combine per capita pharmaceutical expenditures by
demographic group with population projections. For the pharmaceuticals
sector, it was assumed per capita pharmaceutical expenditures were
distributed according to the age distribution of persons taking prescribed
medicines over a two week period as shown in, ABS, National Health Survey,
4663.0, 1995.
We then combined per capita pharmaceutical expenditures by
demographic group with the relevant population projections (see later for
source) for the period 2001-02 to 2020-21 to derive projections of
Commonwealth expenditures on hospitals.
State and Local government expenditures
Total State and Local government outlays on pharmaceuticals
in 1995-96 were derived from unpublished data from ABS, Government Finance
Statistics, 5512.0, 1996-97 for category 2560 Pharmaceutical medical aids
and appliances. It was assumed there were no Commonwealth grants to the
States for pharmaceuticals.
The base figure for State and Local government expenditure
on pharmaceuticals was then distributed across demographic groups
according to the age distribution of persons taking prescribed medicines
over a two week period, ABS, National Health Survey, 4663.0, 1995, to
derive per capita State and Local government expenditure on
pharmaceuticals. These were combined with the relevant population
projections to derive projections of State and Local government
expenditures on pharmaceuticals for the period 1996-97 to 2020-21.
Private expenditures
Private expenditures on pharmaceuticals in the base period
1995-96 were derived in similar fashion to private expenditures on
hospitals as described above. Then as for State and Local government
expenditure on pharmaceuticals, the base figure for private expenditure on
pharmaceuticals was then distributed across demographic groups according
to the age distribution of persons taking prescribed medicines over a two
week period, ABS, National Health Survey, 4663.0, 1995, to derive per
capita private expenditure on pharmaceuticals. These were combined with
the relevant population projections to derive projections of private
expenditures on pharmaceuticals for the period 1996-97 to 2020-21.
Medical benefits and services
Commonwealth government expenditures
Total Commonwealth outlays on medical benefits and services
in 1995-96 were derived from unpublished data from ABS, Government Finance
Statistics, 5512.0, 1996-97 in residual fashion as outlays on all health
services less outlays on hospitals, nursing homes and pharmaceuticals. We
include other health outlays, such as community health and health research
outlays, with medical benefits outlays (instead of with hospitals, nursing
homes or pharmaceuticals outlays) because we assume these are distributed
across age groups in similar fashion. Projections of Commonwealth outlays
on medical benefits and services were based on growth rates contained in
the forward estimates for Medical Services and Benefits, ATSI Health
outlays, Other Health Services and General Administration outlays from
Commonwealth Budget Paper No. 1, 1996-97 and 1997-98 for the period
1995-96 to 2000-01.
In order to derive projections of Commonwealth expenditures
on medical benefits and services beyond the forward estimates period from
2001-02 to 2020-21, we need to combine per capita medical benefits and
services expenditures by demographic group with population projections.
For the medical benefits and services sector, it was assumed per capita
medical benefits and services expenditures were distributed according to
the number of doctors’ consultations by age group over a two week period
as shown in, ABS, National Health Survey, 4663.0, 1995.
We then combined per capita medical benefits and services
expenditures by demographic group with the relevant population projections
(see later for source) for the period 2001-02 to 2020-21 to derive
projections of Commonwealth expenditures on hospitals.
State and Local government expenditures
Total State and Local government outlays on medical
benefits and services in 1995-96 were derived from unpublished data from
ABS, Government Finance Statistics, 5512.0, 1996-97 for all health outlays
other than hospitals, nursing homes and pharmaceuticals less Commonwealth
grants to the states for other health outlays for current and capital
outlays, Tables 15 and 16, Government Finance Statistics, 5512.0, 1995-96.
The base figure for State and Local government expenditure
on medical benefits and services was then distributed across demographic
groups according to the number of doctors’ consultations by age group
over a two week period, ABS, Naional Health Survey, 4663.0, 1995, to
derive per capita State and Local government expenditure on medical
benefits and services. These were combined with the relevant population
projections to derive projections of State and Local government
expenditures on medical benefits and services for the period 1996-97 to
2020-21.
Private expenditures
Private
expenditures on medical benefits and services in the base period 1995-96
were derived in similar fashion to private expenditures on hospitals as
described above. Then as for State and Local government expenditure on
medical benefits and services, the base figure for private expenditure on
medical benefits and services was then distributed across demographic
groups according to the number of doctors’ consultations by age group
over a two week period, ABS, National Health Survey, 4663.0, 1995, to
derive per capita private expenditure on medical benefits and services.
These were combined with the relevant population projections to derive
projections of private expenditures on medical benefits and services for
the period 1996-97 to 2020-21.
Social security and welfare
Projections of social security and welfare
expenditures were prepared for the Commonwealth government and State and
Local governments sectors and we do not include any private social
security and welfare expenditures. Commonwealth government expenditures
are further broken down by sector but State and Local government
expenditures are a one line item since they are relatively small scale in
nature in comparison with Commonwealth government expenditures.
Commonwealth government expenditures
Total Commonwealth outlays on social security and
welfare in 1995-96 were derived from ABS, Government Finance Statistics,
5512.0, Table 17. Commonwealth outlays on social security and welfare by
sector in 1995-96 as shown in the Commonwealth Budget Paper No. 1, 1996-97
were adjusted pro-rata to add to the ABS figure. Outlays on Other Welfare
Programmes, Aboriginal Advancement Programmes nec and Recoveries and
Repayments were combined with Assistance to Families and Other Welfare
Programmes since the age distribution of these outlays was assumed to be
closest to that of the latter. General administration outlays were then
distributed pro-rata across the remaining sectors.
Age and service pensions
Using the estimate of age and service pension
expenditures in 1995-96 derived above, we then applied growth rates
contained in the forward estimates for the period 1995-96 to 2000-01 for
age and service pensions from Commonwealth Budget Paper No. 1, 1996-97 and
1997-98 to derive age and service pension outlays for the period 1996-97
to 2000-01. Beyond the forward estimates period, we used projections of
age and service pensions as a percentage of GDP supplied by the Retirement
Income Modelling (RIM) taskforce. We adjusted the nominal age and service
pensions figure derived from RIM projections for 2000-01 (see Section III
later for a description of assumptions relating to GDP and prices) so that
it equated to our derived estimate of age and service pensions expenditure
in 2000-01. We then applied growth rates implied by the RIM projections to
derive projections of nominal age and service pensions for the period
2001-02 to 2020-21.
Assistance to veterans and dependants, excluding
service pensions
We exclude assistance to veterans and dependants
expenditures (excluding service pensions) from the analysis. This
primarily comprises expenditures on veterans disability pensions. Whereas
veterans service pensions can be treated in some senses as a substitute
for the age pension, the treatment of veterans disability pensions is
unclear. It might be argued that as the present cohort of veterans
diminishes over time, that projections of veterans disability pensions
expenditures should decline over time. However, it may be the case that at
some time in the future, there may be new claimants to veterans disability
pensions. Excluding this category of expenditure may have the effect of
showing stronger growth in social expenditures by way of comparison with
another scenario which included these expenditures but where they declined
over time.
Assistance to people with disabilities
Using the estimate of assistance to people with
disabilities in 1995-96 derived above, we then applied growth rates
contained in the forward estimates for the period 1995-96 to 2000-01 for
assistance to people with disabilities from Commonwealth Budget Paper No.
1, 1996-97 and 1997-98 to derive expenditures on assistance to people with
disabilities for the period 1996-97 to 2000-01. Commonwealth government
expenditures on assistance to people with disabilities in 2000-01 were
distributed across demographic groups according to the age distribution of
Disability Support Pensioners. Data on the latter were derived from Table
6, Disability Support Pension Customers, June 1996, DSS Customers : A
Statistical Overview, Department of Social Security, 1996.
Per capita Commonwealth government expenditures on
assistance to people with disabilities by demographic group were then
combined with population projections to derive projections of Commonwealth
government expenditures on assistance to people with disabilities for the
period 2001-02 to 2020-21.
Assistance to families and other welfare programmes
Using the estimate of assistance to families and
other welfare programmes in 1995-96 derived above, we then applied growth
rates contained in the forward estimates for the period 1995-96 to 2000-01
for assistance to families and other welfare programmes from Commonwealth
Budget Paper No. 1, 1996-97 and 1997-98 to derive expenditures on
assistance to families and other welfare programmes for the period 1996-97
to 2000-01.
Commonwealth government expenditures on assistance to
families and other welfare programmes in 2000-01 were distributed across
demographic groups in the following manner. This category covers a wide
range of family and welfare payments. Unfortunately we only have
information relating to the age distribution of a limited number of these
payments. In the current exercise we utilised information on the age
distribution of sole parent pensioners, Widows Class B pensioners and
persons receiving greater than minimum family payment.
We assume all outlays relating to parenting payment
(categories of expenditure within the assistance to families and other
welfare programmes sector were separately identified for this exercise)
are distributed across age groups according to the age distribution of
sole parent pensioners. This information was derived from Table 39, Sole
Parent Pension Customers, June 1996, DSS Customers : A Statistical
Overview, Department of Social Security, 1996.
We assume outlays relating to Other Assistance to
Widows were distributed across age groups according to the age
distribution of persons receiving the Widows Pension Class B. This
information was derived from Table 50, Widow Pension Class B Customers,
June 1996, DSS Customers : A Statistical Overview, Department of Social
Security, 1996.
All other outlays in this category were assumed to be
distributed across age groups according to the age distribution of persons
receiving greater than minimum family payment. It was assumed these other
outlays most closely resembled family payments in terms of their benefits
to age groups. Information on the age distribution of greater than minimum
family payments was derived from Table 34, Greater Than Minimum Family
Payment Customers : Characteristics by Family Type, June 1996, DSS
Customers : A Statistical Overview, Department of Social Security, 1996.
Per capita Commonwealth government expenditures in
each of these categories were then combined to derive per capita
expenditures on assistance to families and other welfare programmes by
demographic group in 2000-01. This latter information was then combined
with population projections to derive projections of Commonwealth
government expenditures on assistance to families and other welfare
programmes for the period 2001-02 to 2020-21.
Assistance to the unemployed and sick
Using the estimate of assistance to the unemployed
and sick in 1995-96 derived above, we then applied growth rates contained
in the forward estimates for the period 1995-96 to 2000-01 for assistance
to the unemployed and sick from Commonwealth Budget Paper No. 1, 1996-97
and 1997-98 to derive expenditures on assistance to the unemployed and
sick for the period 1996-97 to 2000-01.
Commonwealth government expenditures on assistance to
the unemployed and sick in 2000-01 were distributed across demographic
groups in the following manner. Newstart Allowance outlays (categories of
expenditure within the assistance to unemployed and sick sector were
separately identified for this exercise) were distributed across age
groups according to the age distribution of Newstart Allowance Customers,
Job Search Allowance Customers, Youth Training Allowance Customers and
Mature Age Allowance Customers (the latter are all 60-64 year-old males).
Information on the age distribution of these customers was derived from
Tables 23, 25, 26 and 27, June 1996, DSS Customers : A Statistical
Overview, Department of Social Security, 1996.
Sickness Allowance outlays were distributed across
age groups according to the age distribution of Sickness Allowance
Customers. Information on the age distribution of these customers was
derived from Table 16, June 1996, DSS Customers : A Statistical Overview,
Department of Social Security, 1996.
Partner Allowance outlays were distributed across age
groups according to the age distribution of Partner Allowance Customers.
Information on the age distribution of these customers was derived from
Table 29, June 1996, DSS Customers : A Statistical Overview, Department of
Social Security, 1996.
Per capita Commonwealth government expenditures in
each of these categories were then combined to derive per capita
expenditures on assistance to the unemployed and sick by demographic group
in 2000-01. This latter information was then combined with population
projections to derive projections of Commonwealth government expenditures
on assistance to the unemployed and sick for the period 2001-02 to
2020-21.
State and Local government expenditures
Total State and Local government outlays on social
security and welfare in 1995-96 were derived from ABS, Government Finance
Statistics, 5512.0, 1995-96, Table 29 less Commonwealth grants to the
states for social security and welfare for current and capital outlays,
Tables 15 and 16, Government Finance Statistics, 5512.0, 1995-96.
The base figure for State and Local government
expenditure on social security and welfare was then distributed across
demographic groups according to the distribution of Commonwealth
expenditures on assistance to families and other welfare programmes
described above, to derive per capita State and Local government
expenditure on social security and welfare. These were combined with the
relevant population projections to derive projections of State and Local
government expenditures on social security and welfare for the period
1996-97 to 2020-21.
Labour market and employment
Projections of labour market and employment
expenditures were prepared for the Commonwealth government and State and
Local government sectors and we do not include any private labour market
and employment expenditures.
Commonwealth government expenditures
Total Commonwealth outlays on labour market and
employment in 1995-96 were derived from unpublished data from ABS,
Government Finance Statistics, 5512.0, 1996-97 for categories, 3331
Vocational Training and 3339 Other Labour and Employment Affairs.
Commonwealth outlays on labour market and employment affairs for the
Vocational and Industry Training, Assistance to Jobseekers and Industry,
and Employment Services sectors in 1995-96, as shown in the Commonwealth
Budget Paper No. 1, 1996-97, were adjusted pro-rata to add to the ABS
figure.
We then applied growth rates contained in the forward
estimates for the period 1995-96 to 2000-01 for Vocational and Industry
Training, Assistance to Jobseekers and Industry, and Employment Services
(from 1 July 1997, the latter outlays were recorded instead as social
security and welfare outlays following the creation of the Commonwealth
Service Delivery Agency) from Commonwealth Budget Paper No. 1, 1996-97 and
1997-98 to derive expenditures on these categories for the period 1996-97
to 2000-01.
We derived per capita expenditures by demographic
group for vocational and industry training expenditures and labour market
assistance to jobseekers and industry according to the distribution of
programme expenditures within each of these categories and the age
distribution of participants within those programmes.
In the vocational and industry training category,
expenditures comprise outlays on the traineeship and apprenticeship
schemes. Data on expenditures were derived from the Department of
Employment, Education, Training and Youth Affairs, Annual Report, 1995-96.
Data on the age distribution of participants in these programmes was
derived from unpublished administrative data from the Department.
A similar approach was used to derive per capita
expenditures by demographic group for the category of labour market
assistance to jobseekers and industry. Expenditure in the following
programmes in 1995-96 was derived from the Department of Employment,
Education, Training and Youth Affairs, Annual Report,1995-96: Jobskills,
New Work Opportunities, Jobstart, Landcare and Environment Action
Programme (LEAP), Jobtrain, Special Intervention Programme (SIP), Jobclubs,
Skillshare, Mobility Assistance Scheme and the New Enterprise Incentive
Scheme (NEIS). Similarly, data on the age distribution of participants in
these programmes was derived from unpublished administrative data from the
Department.
This information enabled us to derive per capita
Commonwealth government labour market and employment expenditures by
demographic group for 2000-01. This was combined with population
projections to derive projections of Commonwealth government expenditures
on labour market and employment for the period 2001-02 to 2020-21.
State and Local government expenditures
Total State and Local government outlays on labour
market and employment in 1995-96 were derived from unpublished data from
ABS, Government Finance Statistics, 5512.0, 1995-96, for the category 3339
Other labour and employment affairs. (It was assumed there were no
Commonwealth grants to the States for labour market and employment and
that grants in the broader Other Economic Affairs category were allocated
to the residual category 3390, Other Economic Affairs nec).
The base figure for State and Local government expenditure on labour
market and employment was then distributed across demographic groups
according to the age distribution of participants in the Jobstart
programme. It was assumed the age distribution of State and Local
government expenditures in this area more closely resembled the age
distribution of expenditures in the Jobstart programme. From this
information we derived per capita State and Local government expenditure
on labour market and employment by demographic group. These were combined
with the relevant population projections to derive projections of State
and Local government expenditures on labour market and employment for the
period 1996-97 to 2020-21.BACK
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