Model explorer

Every relationship, coefficient, lag and assumption the engine runs on. If you disagree with a result, this is where you find the specific parameter you disagree with.

132

Variables

342

Relationships

Models

Assumptions

Policy levers

Assumptions

User-adjustable parameters. Each has a default, a range, and a statement of what changing it means. Move any of them in the workspace and the whole scenario re-runs.

Mortgage rate pass-through

Share of a cash rate change that reaches the average outstanding mortgage rate. Less than 100% because part of the book is fixed and repricing lags.

High

Default 85%Range 50–110Model monetary.transmissionHistorical relationship

Deposit rate pass-through

Share of a cash rate change that reaches savers. Banks typically widen deposit margins when rates rise, which is why this is below mortgage pass-through.

High

Default 72%Range 30–100Model monetary.transmissionHistorical relationship

Borrowing capacity into prices

How much of a change in what buyers can borrow shows up in house prices. Below one because sellers withdraw rather than accept lower prices, so turnover absorbs part of the shock.

Medium

Default 62%Range 20–100Model housing.pricesHistorical relationship

Housing supply elasticity

Percent increase in dwelling approvals for each percent increase in prices. Australia sits around one; parts of the United States exceed three.

Medium

Default 1.15elasticityRange 0.2–3Model housing.supplyHistorical relationship

Policy reaction strength

How strongly the RBA responds to the inflation and unemployment a policy produces. Set to zero to hold the cash rate fixed for the whole horizon and see the policy's effect in isolation.

Medium

Default 1× standard ruleRange 0–2Model monetary.reactionExpert judgement

Grant capitalisation into prices

Share of a first home buyer grant that ends up in the purchase price rather than the buyer's pocket. Estimates range from 30% to over 100%.

Medium

Default 50%Range 0–120Model housing.demandsideHistorical relationship

Variable-rate share of mortgages

Share of the mortgage book on variable rates. Used by the household microsimulation to work out how quickly a rate change reaches each cohort.

High

Default 72%Range 40–100Model household.mortgageMeasured

Housing stress threshold

Share of gross income above which a household is counted as being in housing stress. The 30% convention is widely used and widely criticised.

Medium

Default 30% of incomeRange 20–50Model social.housingstressAssumption

Labour absorption horizon

How long the economy takes to create jobs for additional workers. The single most consequential assumption in any migration scenario.

Medium

Default 4yearsRange 1–10Model labour.absorptionExpert judgement

Landlord cost pass-through to rents

Whether landlords can pass higher interest costs into rents. In a tight market largely yes; in a loose one no. Contested, and it changes who bears a rate rise.

Low

Default 55%Range 0–120Model housing.rentalExpert judgement

Registered models

Each model states its method, when it was calibrated, and what it cannot do.

Monetary transmission`monetary.transmission`v1.0.0

Carries the cash rate into lending and deposit rates. Pass-through to the outstanding mortgage book has a long tail because fixed-rate loans reprice only when they expire.

High

Method: Distributed-lag pass-through

Calibrated over: 2000–2025

Inputs: cashRate

Outputs: mortgageRateVariable, mortgageRateNew, businessLendingRate, depositRate, bondYield10y

RBA Statistical Tables F1, F5, F6 · RBA research on monetary policy transmission

Limitations

· Assumes bank funding spreads are stable. In a funding-market disruption pass-through can exceed 100% or stall entirely.
· The fixed-rate tail is calibrated to a book composition that shifts over the cycle.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
RBA cash rate → Average outstanding mortgage rate	0.850	pp per pp	0–18 months, peaking around month 2	High	Lenders pass most of a cash-rate move through to variable mortgages within a couple of months. The long tail is fixed-rate loans rolling onto the new level as they expire, which is why the average rate paid across the whole book keeps drifting up for more than a year.
RBA cash rate → New lending rate	0.950	pp per pp	0–4 months, peaking around month 1	High	Advertised rates on new loans reprice almost immediately and almost fully — there is no fixed-rate book to average in.
RBA cash rate → Business lending rate	0.900	pp per pp	0–6 months, peaking around month 2	High	Business lending is mostly variable and benchmarked to bank funding costs, so pass-through is high and fast.
RBA cash rate → Deposit rate	0.720	pp per pp	0–9 months, peaking around month 3	High	Deposit rates follow the cash rate but incompletely — banks widen deposit margins when rates rise. This is the main channel through which higher rates make some households better off.
RBA cash rate → 10-year bond yield	0.350	pp per pp	0–3 months, peaking around month 1	Medium	Long yields move with the policy rate but far less than one-for-one, because they price the average expected rate over a decade rather than today's setting.

Unconventional policy`monetary.unconventional`v0.4.0

Balance-sheet operations acting on the long end of the yield curve.

Low

Method: Stock-effect reduced form

Calibrated over: 2020–2022

Inputs: qeStance

Outputs: bondYield10y

Limitations

· One short episode of Australian experience. Estimates in the international literature vary by a factor of three.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Central bank balance sheet → 10-year bond yield	-0.00350	pp per unit	1–9 months, peaking around month 3	Low	Roughly 35 basis points off the ten-year yield per $100bn of purchases. Estimates in the literature vary by a factor of three; this sits near the middle.

Exchange rate`monetary.external`v0.5.0

Links domestic interest rates to the trade-weighted exchange rate.

Low

Method: Interest differential reduced form

Calibrated over: 2000–2025

Inputs: cashRate, bondYield10y

Outputs: exchangeRate

Limitations

· Exchange rates are dominated by offshore developments and commodity prices, neither of which this model sees.
· Direction is more reliable than magnitude. Treat the level as indicative only.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
RBA cash rate → Exchange rate (TWI)	2.200	% per pp	0–6 months, peaking around month 2	Low	Higher domestic rates attract capital and lift the dollar. The direction is reliable; the magnitude is not — exchange rates are dominated by offshore developments the model does not see.
10-year bond yield → Exchange rate (TWI)	0.900	% per pp	0–6 months, peaking around month 2	Low	Long-rate differentials matter for the currency alongside the policy rate.

Asset price response`monetary.assets`v0.4.0

Equity market response to policy rates.

Low

Method: Discount-rate reduced form

Calibrated over: 2000–2025

Inputs: cashRate

Outputs: equityMarket

Limitations

· Markets price expected policy, so realised responses to announced decisions are small and noisy.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
RBA cash rate → Equity market	-3.200	% per pp	0–6 months, peaking around month 2	Low	Higher discount rates lower the present value of future earnings. Equity responses to policy are noisy and often already priced in before the decision.

Policy reaction function`monetary.reaction`v1.0.0

Closes the loop: the central bank responds to the inflation and unemployment its own settings produce. Disable it to hold the policy rate fixed across the horizon.

Medium

Method: Taylor-type feedback rule

Calibrated over: 1993–2025

Inputs: inflation, unemployment

Outputs: cashRate

Limitations

· A mechanical rule cannot represent judgement, forward guidance, or the Board's response to things outside the model.
· Coefficients are smaller than a textbook Taylor rule because the baseline path already embeds expected policy.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Inflation → RBA cash rate	0.550	pp per pp	6–42 months, peaking around month 18	Medium	The RBA responds to the inflation its own decisions produce. This is what makes a rate rise partly self-unwinding after about two years — and it is why the model shows a rate reversal without anyone deciding on one. Set the reaction strength to zero to hold the policy rate fixed for the whole horizon.
Unemployment rate → RBA cash rate	-0.350	pp per pp	6–42 months, peaking around month 18	Medium	The other half of the RBA's dual mandate. A policy that weakens the labour market eventually buys itself a rate cut.

Borrowing capacity`credit.serviceability`v1.0.0

Computes how much a given income can borrow under APRA's serviceability rules. Deterministic arithmetic, not an estimate.

High

Method: Annuity arithmetic with serviceability buffer

Calibrated over: current lending standards

Inputs: mortgageRateNew, macroprudentialBuffer, wageLevel, incomeTaxRate

Outputs: borrowingCapacity

Limitations

· Uses a single representative borrower. Actual capacity varies enormously with expenses, dependants and existing commitments.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
New lending rate → Borrowing capacity	-8.500	% per pp	0–3 months, peaking around month 1	High	Annuity arithmetic. At a 3-point serviceability buffer, a one-point rise in the assessed rate cuts the loan a given income can service by roughly 8–9%.
Serviceability buffer → Borrowing capacity	-6.000	% per pp	1–9 months, peaking around month 3	High	The buffer is added to the actual rate before serviceability is tested, so it bites the same way a rate rise does — just without affecting anyone's actual repayments.
Wage level → Borrowing capacity	0.950	% per %	0–12 months, peaking around month 3	High	Capacity scales almost one-for-one with income, less a small allowance for living expenses that do not scale.
Average income tax rate → Borrowing capacity	-1.100	% per pp	0–9 months, peaking around month 3	Medium	Lenders assess net income, so a higher average tax rate reduces borrowing capacity directly.

Credit availability`credit.supply`v0.3.0

Non-price credit rationing — lender risk appetite independent of the interest rate.

Low

Method: Reduced-form index

Calibrated over: 2008–2025

Inputs: cashRate, macroprudentialBuffer, businessConfidence

Outputs: creditSupply

Limitations

· A constructed index with no directly observable counterpart.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
RBA cash rate → Credit availability	-3.000	pts per pp	0–18 months, peaking around month 6	Low	Lenders tighten standards as rates rise and arrears expectations build. A soft channel, included because credit rationing shows up in downturns.
Serviceability buffer → Credit availability	-5.000	pts per pp	0–12 months, peaking around month 3	Medium	Macroprudential tightening is, by design, a restriction on credit availability rather than its price.
Business confidence → Credit availability	0.300	pts per pts	0–12 months, peaking around month 3	Low	Lender risk appetite moves with the broader business cycle.

Housing credit`credit.housing`v0.8.0

The housing debt stock responding to prices and borrowing capacity as the loan book turns over.

Medium

Method: Stock adjustment

Calibrated over: 2000–2025

Inputs: housePrices, borrowingCapacity

Outputs: housingCredit

Limitations

· Turnover is assumed stable; in practice it collapses in downturns, slowing the stock adjustment.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
House prices → Housing credit outstanding	0.550	% per %	3–36 months, peaking around month 12	High	Higher prices mean larger loans, which is why house prices and household debt rise together.
Borrowing capacity → Housing credit outstanding	0.250	% per %	3–36 months, peaking around month 12	Medium	Larger permitted loan sizes translate into a larger credit stock as the book turns over.

Mortgage repayments`household.mortgage`v1.0.0

Converts the average outstanding rate into the average monthly principal-and-interest repayment. Non-linear in the rate — this is deliberately not the linear engine.

High

Method: Annuity arithmetic

Calibrated over: current loan book

Inputs: mortgageRateVariable, housingCredit

Outputs: mortgagePayment, householdInterestBurden

Limitations

· Uses an average balance and average remaining term. The distribution matters more than the average for stress outcomes, which is what the microsimulation is for.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Average outstanding mortgage rate → Average mortgage repayment	9.700	% per pp	0–3 months, peaking around month 1	High	Annuity arithmetic on the average outstanding loan of about $620,000 with 25 years remaining: a one-point rise in the rate paid raises the monthly principal-and-interest repayment by roughly 9.7%.
Housing credit outstanding → Average mortgage repayment	0.550	% per %	0–24 months, peaking around month 6	Medium	Bigger loans mean bigger repayments, though average balances move slowly because most of the book is existing loans.
Average mortgage repayment → Interest payments to income	0.065	pp per %	0–3 months, peaking around month 1	High	Converts the repayment change into the standard interest-to-income stress ratio, counting only the interest component.
Housing credit outstanding → Interest payments to income	0.090	pp per %	0–12 months, peaking around month 3	High	A larger debt stock services at a higher share of income at any given interest rate.
Household disposable income → Interest payments to income	-0.098	pp per %	0–6 months, peaking around month 2	High	The denominator of the ratio. Income growth reduces the servicing burden without anything changing on the debt side.

Interest income`household.savings`v1.0.0

Interest earned on household deposits — the channel through which rate rises benefit savers.

High

Method: Balance-sheet arithmetic

Calibrated over: current deposit stock

Inputs: depositRate

Outputs: depositIncome

Limitations

· Deposits are highly concentrated by age and wealth; the aggregate hides that entirely.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Deposit rate → Interest income of savers	22.000	% per pp	0–9 months, peaking around month 3	High	Households hold roughly $1.5 trillion in deposits. A one-point rise in the deposit rate is about $15bn a year of extra interest income, concentrated among older households.

Household income`household.income`v1.0.0

Assembles household disposable income from wages, employment, transfers, taxes and interest income.

High

Method: Accounting shares

Calibrated over: 2025–26 national accounts structure

Inputs: wageLevel, employment, incomeTaxRate, jobSeekerPayment, pensionPayment, depositIncome

Outputs: householdDisposableIncome

Limitations

· Aggregate shares. Incidence across households comes from the microsimulation, not from here.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Interest income of savers → Household disposable income	0.040	% per %	0–6 months, peaking around month 2	High	Interest income is about 4% of household disposable income in aggregate — but far more than that for retirees and far less for young mortgage holders.
Wage level → Household disposable income	0.620	% per %	0–6 months, peaking around month 2	High	Wages and salaries are a little under two-thirds of household disposable income after tax.
Employment → Household disposable income	0.550	% per %	0–6 months, peaking around month 2	High	More people in work means more wage income, roughly in proportion to the wage share.
Average income tax rate → Household disposable income	-1.280	% per pp	0–6 months, peaking around month 2	High	A one-point rise in the effective average income tax rate takes about $20bn a year from households, which is 1.28% of disposable income.
Household disposable income → Real disposable income	1.000	% per %	immediate	High	Definitional. Real disposable income is nominal household income deflated by consumer prices.
Consumer price level → Real disposable income	-1.000	% per %	immediate	High	The other half of the same definition — and the reason nominal income growth tells you nothing on its own.

Discretionary income`household.discretionary`v1.0.0

Income remaining after housing costs and essentials. Coefficients are set so a uniform rise in incomes and all costs leaves it unchanged — the accounting closes rather than being asserted.

High

Method: Accounting identity

Calibrated over: 2025–26 expenditure structure

Inputs: householdDisposableIncome, priceLevel, mortgagePayment, rents

Outputs: discretionaryIncome

Limitations

· The essential/discretionary split is a convention, not an observation.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Household disposable income → Discretionary income	2.500	% per %	immediate	High	Discretionary income is about 40% of disposable income, so income changes are amplified two-and-a-half times in what is left after the bills.
Consumer price level → Discretionary income	-1.100	% per %	immediate	High	Non-housing consumption is about 1.1 times discretionary income, so general price rises erode it faster than they erode total income.
Average mortgage repayment → Discretionary income	-0.243	% per %	immediate	High	Owner-occupier mortgage repayments are roughly $150bn a year against $618bn of discretionary income, so a 10% repayment rise removes about 2.4% of discretionary spending power.
Rents → Discretionary income	-0.080	% per %	0–3 months, peaking around month 1	Medium	Tops up the rent weight already inside the consumer price level, because rent is a larger share of renters' budgets than of the CPI basket.
Energy bill relief → Discretionary income	0.00002	% per unit	0–3 months, peaking around month 1	High	A rebate paid to 11.15 million households. A $300 rebate is about $3.3bn, or half a percent of discretionary income.
Out-of-pocket childcare cost → Discretionary income	-0.019	% per %	0–3 months, peaking around month 1	Medium	Out-of-pocket childcare is about $12bn a year, concentrated in a small number of households with young children.
Out-of-pocket health costs → Discretionary income	-0.026	% per %	0–6 months, peaking around month 2	Medium	Household out-of-pocket health spending is around $16bn a year.

Consumption`household.consumption`v1.0.0

Consumption responding to discretionary income, interest rates, wealth and sentiment.

High

Method: Error-correction reduced form

Calibrated over: 1995–2025

Inputs: discretionaryIncome, cashRate, consumerConfidence

Outputs: householdConsumption

Limitations

· A single aggregate propensity to consume. In reality it differs sharply between liquidity-constrained and unconstrained households.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Discretionary income → Consumer spending	0.270	% per %	1–15 months, peaking around month 4	High	Households spend most of a change in discretionary income, but not all of it, and not immediately. Scaled from discretionary income to total consumption, this is a marginal propensity to consume of about 0.7.
RBA cash rate → Consumer spending	-0.220	% per pp	3–24 months, peaking around month 9	Medium	Beyond the cashflow hit to mortgage holders, higher rates make saving more attractive and credit-financed purchases dearer for everyone.
Consumer confidence → Consumer spending	0.00180	% per pts	1–9 months, peaking around month 3	Low	Sentiment adds an amplifier on top of the cashflow channels — mostly affecting the timing of large purchases rather than the total.

Wealth effects`household.wealth`v0.7.0

Housing and equity wealth feeding consumption and the household balance sheet.

Medium

Method: Elasticity

Calibrated over: 2000–2025

Inputs: housePrices, equityMarket, housingCredit

Outputs: householdNetWorth, householdConsumption

Limitations

· Wealth effects are hard to separate from the credit conditions that move wealth in the first place.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
House prices → Consumer spending	0.055	% per %	3–36 months, peaking around month 12	Medium	The housing wealth effect. Rising home values make owners feel richer and unlock equity for spending; the effect is real but modest and slow.
Equity market → Consumer spending	0.012	% per %	3–24 months, peaking around month 9	Low	Directly-held equities are a small share of household wealth and are concentrated in high-income households with low spending propensities.
House prices → Household net worth	0.600	% per %	0–3 months, peaking around month 1	High	Housing is the largest asset on the household balance sheet — around $11 trillion of an $17 trillion net position.
Equity market → Household net worth	0.100	% per %	0–3 months, peaking around month 1	High	Directly-held equities and the equity component of superannuation.
Housing credit outstanding → Household net worth	-0.135	% per %	0–3 months, peaking around month 1	High	Debt is the liability side of the balance sheet.

Saving behaviour`household.saving`v0.7.0

The saving ratio responding to income, precaution and the return on saving.

Medium

Method: Reduced form

Calibrated over: 1995–2025

Inputs: discretionaryIncome, unemployment, depositRate, consumerConfidence

Outputs: savingRatio

Limitations

· Aggregate saving is dominated by high-income households and is a poor guide to typical buffers.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Discretionary income → Household saving ratio	0.160	pp per %	0–12 months, peaking around month 3	Medium	Households save a slice of income gains rather than spending all of it, so the saving ratio rises when discretionary income does.
Unemployment rate → Household saving ratio	0.420	pp per pp	0–18 months, peaking around month 6	Medium	Precautionary saving. When job security deteriorates, households build buffers — which is why downturns are self-reinforcing on the demand side.
Deposit rate → Household saving ratio	0.220	pp per pp	0–18 months, peaking around month 6	Medium	A higher return on saving increases the reward for deferring consumption.
Consumer confidence → Household saving ratio	-0.025	pp per pts	0–12 months, peaking around month 3	Low	Confident households run down buffers; anxious ones rebuild them.

Consumer sentiment`household.sentiment`v0.5.0

Sentiment as a function of labour market, inflation, rates and asset prices.

Low

Method: Reduced form

Calibrated over: 2000–2025

Inputs: unemployment, inflation, mortgageRateVariable, realWageGrowth

Outputs: consumerConfidence

Limitations

· Sentiment responds to news and politics, neither of which is modelled.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Unemployment rate → Consumer confidence	-8.000	pts per pp	0–9 months, peaking around month 3	Medium	Job-loss fear is the single strongest driver of consumer sentiment, and it moves before anyone is actually made redundant.
Real wage growth → Consumer confidence	3.500	pts per pp	0–12 months, peaking around month 3	Medium	People notice whether their pay is keeping up with prices.
Inflation → Consumer confidence	-4.000	pts per pp	0–9 months, peaking around month 2	Medium	Inflation depresses sentiment beyond its arithmetic effect on real income — the salience of visible price rises does its own damage.
Average outstanding mortgage rate → Consumer confidence	-5.000	pts per pp	0–9 months, peaking around month 3	Medium	Mortgage rate rises hit sentiment across the whole community, not only among the third of households who hold a mortgage.
House prices → Consumer confidence	0.250	pts per %	3–24 months, peaking around month 9	Low	Rising home values support owner sentiment. The same rise does the opposite for prospective buyers, so the aggregate coefficient is small.

Expenditure accounts`macro.expenditure`v1.0.0

GDP assembled from consumption, investment, public demand and net exports.

High

Method: Accounting shares

Calibrated over: 2025–26 national accounts

Inputs: householdConsumption, businessInvestment, publicDemand, exports, imports

Outputs: gdpReal

Limitations

· Expenditure shares only. There is no production-side or income-side cross-check.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Consumer spending → Real GDP	0.520	% per %	immediate	High	Household consumption is about 52% of GDP. This is an accounting share, not an estimate.
Business investment → Real GDP	0.135	% per %	immediate	High	Private business investment is about 13.5% of GDP.
Public demand → Real GDP	0.225	% per %	0–3 months, peaking around month 1	High	Government consumption and investment together are a little over a fifth of GDP.
Exports → Real GDP	0.245	% per %	immediate	High	Exports are about a quarter of GDP.
Imports → Real GDP	-0.238	% per %	immediate	High	Imports subtract from domestic output. This is the leak that limits the fiscal multiplier in an open economy.
Dwelling completions → Real GDP	0.048	% per %	0–12 months, peaking around month 3	Medium	Dwelling construction is around 5% of GDP — small in the accounts, but volatile enough to drive a cycle.
Public demand → Imports	0.00000	% per %	immediate	Low	Placeholder for the direct import content of public demand, currently carried through the consumption and investment channels instead.

Output gap and capacity`macro.capacity`v0.6.0

Demand opens an output gap in the short run; capacity catches up over several years through an explicit offsetting relationship rather than a hidden decay term.

Low

Method: Two-horizon reduced form

Calibrated over: 1995–2025

Inputs: gdpReal

Outputs: outputGap

Limitations

· Potential output is unobservable and is revised heavily even after the fact.
· The rate at which capacity catches up is a judgement, not an estimate.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Real GDP → Output gap	1.000	pp per %	immediate	Medium	In the short run, extra demand shows up as the economy running hotter relative to its capacity.
Real GDP → Output gap	-0.500	pp per %	12–84 months, peaking around month 36	Low	Capacity catches up. Over several years investment and the capital stock adjust to sustained demand, so about half of the initial gap closes without anything else happening. This offsetting edge is written explicitly rather than hidden in a decay parameter.

Per-capita output`macro.percapita`v1.0.0

Separates output growth from population growth — the arithmetic behind the migration debate.

High

Method: Identity

Calibrated over: n/a

Inputs: gdpReal, population

Outputs: gdpPerCapita

Limitations

· An identity. It carries the uncertainty of its two inputs and adds none of its own.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Real GDP → Real GDP per capita	1.000	% per %	immediate	High	Numerator of output per person.
Population → Real GDP per capita	-1.000	% per %	immediate	High	Denominator of output per person. This edge is why a policy can raise GDP and lower GDP per capita at the same time — which is exactly the migration debate.

Supply side`macro.supply`v0.5.0

Population contributing to output through labour input.

Medium

Method: Reduced form

Calibrated over: 1990–2025

Inputs: population

Outputs: gdpReal

Limitations

· No explicit production function, so capital deepening and composition effects are not separated.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Population → Real GDP	0.350	% per %	3–36 months, peaking around month 12	Medium	More people means more labour input and more output, over and above the demand they generate as consumers.

Productivity`macro.productivity`v0.2.0

Investment, R&D and skills feeding output per hour.

Experimental

Method: Reduced form

Calibrated over: 1990–2025

Inputs: businessInvestment, rdCredit, trainingSpend

Outputs: productivityGrowth

Limitations

· Productivity is the least well understood variable in macroeconomics. Nothing in this block should be relied on for policy design.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Skills and training investment → Productivity growth	0.00150	pp per %	24–120 months, peaking around month 60	Experimental	Skills investment should raise productivity eventually. The evidence linking specific programme spending to measured productivity is weak, and the lag is very long.
Business investment → Productivity growth	0.012	pp per %	12–96 months, peaking around month 36	Low	Capital deepening raises output per hour, slowly.
R&D tax incentive → Productivity growth	0.00120	pp per %	24–120 months, peaking around month 60	Experimental	R&D support may raise innovation and therefore productivity. Attribution from programme spend to measured productivity is very weak.
Skilled share of migration → Productivity growth	0.00400	pp per pp	24–120 months, peaking around month 60	Experimental	A more skill-weighted intake should raise output per hour over long horizons. The effect is small, very slow, and the identification in the literature is weak — this is a defensible prior, not a measurement.

Labour supply`labour.supply`v1.0.0

The labour force from population, migration composition and participation.

High

Method: Demographic accounting

Calibrated over: 2020–2026

Inputs: population, netMigration, participation

Outputs: labourSupply

Limitations

· Assumes migrant participation rates stay at recent averages.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Population → Labour supply	0.950	% per %	3–36 months, peaking around month 12	High	Population growth feeds the labour force, slightly less than one-for-one because arrivals include dependants and children.
Net overseas migration → Labour supply	0.00500	% per %	3–18 months, peaking around month 9	Low	The participation premium on migration, and nothing else: arrivals participate at higher rates than the resident population, especially in the skilled and student streams. The arrivals themselves reach the labour force through population, which is an integrator fed by this same lever, so anything larger here double-counts them. The size is set from that premium alone — a migration change that lifts population by about 1% lifts the labour force by roughly 1.05%, so the premium is a few hundredths of a percent, not a few percent. This edge previously carried 0.1, which multiplied against a proportional lever move (260k to 400k is +54%) added 5.4% to the labour force on top of the 0.8% population already supplied, and took modelled unemployment from 4.2% to 9.1%.
Participation rate → Labour supply	1.490	% per pp	0–3 months, peaking around month 1	High	A one-point rise in the participation rate is about 1.5% more people in the labour force.

Labour demand`labour.demand`v1.0.0

Employment, hours, vacancies and underemployment responding to the output gap.

High

Method: Okun-type reduced form

Calibrated over: 1990–2025

Inputs: outputGap

Outputs: employment, hoursWorked, jobVacancies, underemployment

Limitations

· The Okun relationship is stable on average and unstable in any particular episode.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Output gap → Employment	0.420	% per pp	3–24 months, peaking around month 9	High	Firms hire when demand runs above capacity and shed labour when it does not. Combined with the labour-force identity this reproduces an Okun coefficient of about 0.4.
Output gap → Underemployment rate	-0.450	pp per pp	1–18 months, peaking around month 6	Medium	Hours are the first margin employers adjust — underemployment moves earlier and further than unemployment.
Unemployment rate → Underemployment rate	0.850	pp per pp	0–9 months, peaking around month 3	Medium	The two move together; underemployment is the broader measure of labour-market slack.
Output gap → Hours worked	0.220	% per pp	0–12 months, peaking around month 3	Medium	Employers cut and restore hours before they cut and restore headcount.
Output gap → Job vacancies	4.500	% per pp	0–12 months, peaking around month 3	Medium	Vacancies are the fastest-moving labour demand indicator and are highly cyclical.

Unemployment identity`labour.identity`v1.0.0

Unemployment as the gap between labour supply and employment.

High

Method: Identity

Calibrated over: n/a

Inputs: labourSupply, employment

Outputs: unemployment

Limitations

· An identity.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Labour supply → Unemployment rate	0.958	pp per %	immediate	High	Definitional: unemployment is the labour force less employment, divided by the labour force. More people looking, no more jobs, means a higher unemployment rate.
Employment → Unemployment rate	-0.958	pp per %	immediate	High	The other half of the same identity.

Labour absorption`labour.absorption`v0.5.0

How quickly the economy creates jobs for additional workers. The single most consequential uncertainty in any migration scenario.

Medium

Method: Long-lag reduced form

Calibrated over: 2005–2025

Inputs: labourSupply

Outputs: employment

Limitations

· Absorption depends on the composition of arrivals and on the state of the cycle when they arrive. A single coefficient cannot capture that.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Labour supply → Employment	0.750	% per %	6–72 months, peaking around month 24	Medium	The economy absorbs additional workers over several years as firms expand and new businesses form. The absorption is slow and incomplete within the model horizon, which is where the short-run unemployment effect of migration comes from.

Participation`labour.participation`v0.6.0

Participation responding to labour market conditions, childcare costs and retirement incentives.

Medium

Method: Reduced form

Calibrated over: 2000–2025

Inputs: unemployment, childcareCost, pensionPayment

Outputs: participation

Limitations

· Structural participation trends are far larger than the cyclical response modelled here.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Unemployment rate → Participation rate	-0.180	pp per pp	3–36 months, peaking around month 12	Medium	The discouraged-worker effect: when jobs are scarce, some people stop looking, which flatters the unemployment rate.
Out-of-pocket childcare cost → Participation rate	-0.010	pp per %	6–60 months, peaking around month 24	Medium	Out-of-pocket childcare acts as an effective marginal tax on second earners. Reducing it is one of the few reliable ways to raise participation.
Age pension → Participation rate	-0.00800	pp per %	12–84 months, peaking around month 36	Low	More generous retirement income slightly reduces mature-age workforce attachment.
Skills and training investment → Participation rate	0.00400	pp per %	12–84 months, peaking around month 36	Low	Training programmes lift attachment for people at the margin of the labour force. Evaluation evidence for such programmes is mixed.

Wage determination`labour.wages`v1.0.0

Wage growth from labour market slack, expectations, minimum wage decisions and productivity.

High

Method: Expectations-augmented Phillips curve

Calibrated over: 1998–2025

Inputs: unemployment, inflationExpectations, minimumWagePolicy, productivityGrowth

Outputs: wageGrowth, wageLevel, realWageGrowth

Limitations

· The wage Phillips curve flattened materially after 2012 and the reasons are not settled. Estimates from different sample periods differ substantially.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Unemployment rate → Wage growth	-0.340	pp per pp	3–30 months, peaking around month 12	High	The wage Phillips curve. Slack in the labour market reduces wage growth — flatter in Australia than the textbook version, but clearly present.
Inflation expectations → Wage growth	0.450	pp per pp	3–30 months, peaking around month 12	Medium	Wage bargaining is partly about restoring expected purchasing power, so expectations feed into settlements.
Minimum wage → Wage growthyoy	0.200	pp per %	1–15 months, peaking around month 6	Medium	Minimum and award rates directly set pay for roughly a fifth of employees, and flow through to rates just above the award. Written as a year-ended change because a one-off increase lifts the wage level permanently but wage growth only for a year.
Productivity growth → Wage growth	0.350	pp per pp	6–60 months, peaking around month 24	Medium	Over long horizons real wages track productivity. Over policy-relevant horizons the link is loose.
Net overseas migration → Wage growth	-0.00800	pp per %	6–60 months, peaking around month 24	Low	Whether migration suppresses wages is genuinely contested. Australian studies mostly find small effects concentrated in specific occupations rather than an economy-wide drag; this coefficient reflects that, and its wide uncertainty band reflects the disagreement.
Job vacancies → Wage growth	0.020	pp per %	1–18 months, peaking around month 6	Medium	Competition for scarce workers shows up in wage offers before it shows up in the unemployment rate.
Wage growth → Wage level	1.000	% per pp	immediate	High	Accumulation. A percentage point of extra wage growth sustained for a year raises the wage level by one percent — and keeps raising it if the growth rate stays higher.
Wage growth → Real wage growth	1.000	pp per pp	immediate	High	Definitional.
Inflation → Real wage growth	-1.000	pp per pp	immediate	High	Definitional. Real wage growth is nominal wage growth less inflation.
Minimum wage → Unemployment rate	0.012	pp per %	6–48 months, peaking around month 18	Low	Whether minimum wage rises cost jobs is one of the most contested questions in economics. Australian evidence suggests small effects at the increases historically awarded. The coefficient is small and its uncertainty band is deliberately very wide.
Skilled share of migration → Wage growth	0.00200	pp per pp	12–84 months, peaking around month 36	Low	Composition: a skill-weighted intake competes less with lower-paid resident workers and complements them more. Small, slow, and contested.

Employment taxes`labour.taxes`v0.4.0

Payroll tax incidence split between wages and employment.

Low

Method: Incidence reduced form

Calibrated over: 2000–2025

Inputs: payrollTaxRate

Outputs: wageGrowth, unemployment

Limitations

· Thresholds vary by state and are not modelled, so the effective rate is a national approximation.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Payroll tax rate → Unemployment rate	0.050	pp per pp	6–36 months, peaking around month 18	Low	Payroll tax raises the cost of employing someone. Most of the incidence falls on wages rather than jobs, which is why the employment effect is modest.
Payroll tax rate → Wage growth	-0.120	pp per pp	6–36 months, peaking around month 18	Low	The larger part of payroll tax incidence shows up as slower wage growth rather than fewer jobs.

Sectoral employment`labour.sector`v0.5.0

Construction employment feeding aggregate employment.

Medium

Method: Share accounting

Calibrated over: 2015–2025

Inputs: constructionEmployment

Outputs: employment

Limitations

· Only construction is separately modelled; every other sector is inside the aggregate.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Construction employment → Employment	0.050	% per %	0–3 months, peaking around month 1	Medium	Construction is around 9% of employment. The coefficient is deliberately below that share because the output-gap channel already carries most of the sector's cyclical effect.

Price Phillips curve`prices.phillips`v1.0.0

Core inflation from the output gap, wage costs and expectations.

Medium

Method: Expectations-augmented Phillips curve

Calibrated over: 1998–2025

Inputs: outputGap, wageGrowth, inflationExpectations

Outputs: coreInflation

Limitations

· The slope is flat and imprecisely estimated. Inflation forecasting errors in 2021–23 were large across every model of this type, including this one's ancestors.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Output gap → Core inflation	0.220	pp per pp	6–42 months, peaking around month 18	Medium	The price Phillips curve. Demand running above capacity pushes prices up — flatter than it once was, and with a long lag.

Inflation expectations`prices.expectations`v0.6.0

Expectations adapting to realised inflation, damped by the credibility of the inflation target.

Medium

Method: Adaptive expectations with anchoring

Calibrated over: 1996–2025

Inputs: inflation

Outputs: inflationExpectations

Limitations

· Anchoring is assumed to hold. If it broke, this coefficient would be badly wrong in the direction that matters most.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Inflation expectations → Core inflation	0.500	pp per pp	0–18 months, peaking around month 6	Medium	Expected inflation becomes actual inflation through price-setting and wage bargaining. This is why central banks care about anchoring so much.
Inflation → Inflation expectations	0.300	pp per pp	3–36 months, peaking around month 12	Medium	Expectations adapt to experience, but only partially — the anchoring provided by an inflation target is what keeps this coefficient well below one.

Consumer price level`prices.level`v1.0.0

The price level built from accumulated core inflation plus the CPI-weighted relative price shocks that sit outside the trimmed mean. Headline inflation is then defined as its year-ended change.

High

Method: Weighted aggregation of core and relative price shocks

Calibrated over: 2025–26 CPI weights

Inputs: coreInflation, energyPrices, fuelPrice, rents, constructionCosts

Outputs: priceLevel, inflation

Limitations

· CPI weights are updated annually and are held fixed across the horizon here.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Core inflation → Core price level	1.000	% per pp	immediate	High	Accumulation of the core inflation rate into a price level.
Core price level → Consumer price level	1.000	% per %	immediate	High	Core prices are the backbone of the consumer price level; the edges below add the relative price shocks that sit outside the trimmed mean.
Retail energy prices → Consumer price level	0.045	% per %	0–9 months, peaking around month 2	High	Electricity and gas are about 4.5% of the CPI basket.
Fuel prices → Consumer price level	0.033	% per %	0–3 months, peaking around month 1	High	Automotive fuel is about 3.3% of the basket and passes through almost immediately.
Rents → Consumer price level	0.067	% per %	0–12 months, peaking around month 3	High	Rents are about 6.7% of the CPI. Advertised rents reach the measured index slowly because the index tracks the whole tenancy stock, not just new leases.
Construction costs → Consumer price level	0.080	% per %	3–30 months, peaking around month 12	High	New dwelling purchase costs are around 8% of the CPI basket.
Out-of-pocket childcare cost → Consumer price level	0.010	% per %	0–6 months, peaking around month 2	High	Childcare is about 1% of the CPI basket, measured net of subsidy.
Out-of-pocket health costs → Consumer price level	0.012	% per %	0–6 months, peaking around month 2	High	Out-of-pocket health costs are a little over 1% of the basket.
Consumer price level → Inflationyoy	1.000	pp per %	immediate	High	Headline inflation is defined as the year-ended change in the consumer price level. Constructing it this way is what makes a one-off price shock raise inflation for exactly twelve months and then drop out.

Cost pass-through`prices.costs`v0.8.0

Wages and productivity into prices through unit labour costs.

Medium

Method: Unit labour cost reduced form

Calibrated over: 1998–2025

Inputs: wageGrowth, productivityGrowth

Outputs: coreInflation

Limitations

· Margin behaviour is not modelled, so pass-through is assumed stable across the cycle.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Wage growth → Core inflation	0.280	pp per pp	3–30 months, peaking around month 12	Medium	Labour is the largest single business cost. Wage growth above productivity growth feeds unit labour costs and then prices.
Productivity growth → Core inflation	-0.200	pp per pp	6–60 months, peaking around month 24	Low	Productivity growth offsets wage growth in unit labour costs.

Imported inflation`prices.external`v0.7.0

Exchange rate movements into consumer prices.

Medium

Method: Exchange rate pass-through

Calibrated over: 2000–2025

Inputs: exchangeRate

Outputs: coreInflation

Limitations

· Pass-through is asymmetric and state-dependent in the data; here it is neither.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Exchange rate (TWI) → Core inflationyoy	-0.050	pp per %	3–21 months, peaking around month 9	Medium	A stronger dollar makes imports cheaper. A 10% appreciation takes roughly half a point off inflation over the following year, then drops out — which is why this reads the year-ended change rather than the level.

Indirect taxes`prices.taxes`v1.0.0

GST and tariffs into the price level.

High

Method: Statutory incidence

Calibrated over: current tax base

Inputs: gstRate, tariffRate

Outputs: priceLevel

Limitations

· Assumes full statutory pass-through, which the 2000 GST introduction broadly supports.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
GST rate → Consumer price level	0.550	% per pp	0–3 months, peaking around month 1	High	GST applies to roughly 55% of household consumption, so a one-point rise lifts the price level by about 0.55% — once, not repeatedly.
Average tariff rate → Consumer price level	0.180	% per pp	1–18 months, peaking around month 6	Medium	Tariffs raise the price of imported goods and of domestic substitutes that no longer face the same competition.

Carbon pricing`energy.carbon`v0.6.0

A carbon price into energy, fuel and construction costs, and into emissions.

Medium

Method: Cost pass-through with abatement response

Calibrated over: 2012–2014 and international schemes

Inputs: carbonPrice

Outputs: energyPrices, fuelPrice, emissions, renewableShare

Limitations

· Australia's own carbon pricing episode was short and its effects are still debated.
· Compensation and free permit allocation are not modelled; the revenue is shown gross.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Carbon price → Retail energy prices	0.400	% per unit	1–18 months, peaking around month 6	Medium	A carbon price raises the cost of fossil generation and therefore wholesale electricity. Around $50 a tonne is roughly a 20% rise in retail energy prices before any abatement response.
Carbon price → Fuel prices	0.126	% per unit	1–9 months, peaking around month 3	Medium	Petrol emits about 2.4kg of CO₂ per litre, so a $50 per tonne carbon price is about 12 cents a litre.

Energy bill relief`energy.subsidy`v1.0.0

Rebates applied to household energy bills.

High

Method: Direct arithmetic

Calibrated over: current bill structure

Inputs: energySubsidy

Outputs: energyPrices, electricityBill

Limitations

· Rebates reduce measured prices without changing the underlying cost of supply, so they lower inflation temporarily and reverse when withdrawn.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Energy bill relief → Retail energy prices	-0.052	% per unit	0–3 months, peaking around month 1	High	A rebate applied to the bill reduces the measured price paid. Against an average bill of about $1,920, each dollar of rebate is 0.05% off the price. Note this lowers measured inflation without changing the underlying cost of supply.
Retail energy prices → Household electricity bill	1.000	% per %	0–3 months, peaking around month 1	High	Definitional.

Fuel prices`energy.fuel`v1.0.0

Excise, crude and the exchange rate into the pump price.

High

Method: Cost accounting

Calibrated over: current price structure

Inputs: fuelExcise, exchangeRate, carbonPrice

Outputs: fuelPrice

Limitations

· Global crude prices are exogenous and held at baseline.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Fuel excise → Fuel prices	0.520	% per unit	0–1 months, peaking around month 0	High	Excise is a fixed amount per litre and passes through essentially in full and immediately. One cent on a $1.92 pump price is about 0.5%.
Exchange rate (TWI) → Fuel prices	-0.450	% per %	0–6 months, peaking around month 2	Medium	Crude oil is priced in US dollars, so a stronger Australian dollar lowers the pump price.

Generation mix`energy.supply`v0.3.0

Renewable capacity build and its effect on wholesale prices.

Low

Method: Capacity reduced form

Calibrated over: 2015–2025

Inputs: renewableSubsidy, carbonPrice

Outputs: renewableShare, energyPrices

Limitations

· No transmission, firming or reliability constraints, which are the binding issues in practice.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Renewable energy support → Retail energy prices	-0.015	% per %	12–84 months, peaking around month 36	Low	More zero-marginal-cost generation lowers wholesale prices, but only once it is built and firmed — hence the very long lag.
Renewable energy support → Renewable generation share	0.060	pp per %	12–96 months, peaking around month 36	Low	Subsidy raises the build rate of renewable capacity, with a long lead time from commitment to generation.
Carbon price → Renewable generation share	0.050	pp per unit	12–96 months, peaking around month 36	Medium	A carbon price improves the relative economics of renewable generation.

Emissions`energy.abatement`v0.4.0

Emissions responding to activity, carbon pricing and the generation mix.

Medium

Method: Elasticity

Calibrated over: 2005–2025

Inputs: gdpReal, carbonPrice, renewableShare

Outputs: emissions

Limitations

· Sectoral detail is absent; land use and agriculture are not separated.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Carbon price → Greenhouse gas emissions	-0.300	% per unit	6–72 months, peaking around month 24	Medium	Pricing carbon induces abatement — fuel switching, efficiency and demand response. The response builds over years as capital is replaced.
Real GDP → Greenhouse gas emissions	0.550	% per %	0–24 months, peaking around month 6	Medium	More activity means more emissions, less than one-for-one because the economy keeps decarbonising.
Renewable generation share → Greenhouse gas emissions	-0.550	% per pp	0–24 months, peaking around month 6	Medium	Electricity is around a third of emissions, so each point of renewable share displaces a corresponding share of fossil generation.

House prices`housing.prices`v1.0.0

Prices from borrowing capacity, population, the dwelling stock, incomes and investor demand. Credit capacity is the dominant short-run channel.

Medium

Method: Inverted demand with credit constraint

Calibrated over: 1995–2025

Inputs: borrowingCapacity, population, dwellingStock, householdDisposableIncome, investorDemand

Outputs: housePrices

Limitations

· National medians hide enormous variation between and within cities.
· Momentum and expectations are only weakly represented, so turning points are smoother in the model than in reality.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Borrowing capacity → House prices	0.620	% per %	3–30 months, peaking around month 9	Medium	Housing is an auction market financed by credit. When buyers can borrow less they bid less — but not proportionally less, because sellers withdraw rather than accept lower prices and turnover falls instead.
Population → House prices	0.850	% per %	3–48 months, peaking around month 18	Medium	More people competing for a slow-moving stock of dwellings raises prices.
Dwelling stock → House prices	-1.600	% per %	6–60 months, peaking around month 24	Medium	More dwellings per person lowers prices. The coefficient is large relative to the stock, but the stock moves so slowly that this channel takes a decade to matter.
Household disposable income → House prices	0.450	% per %	6–48 months, peaking around month 18	Medium	Prices are ultimately bounded by what households can pay out of income.
Unemployment rate → House prices	-1.800	% per pp	3–36 months, peaking around month 12	Medium	A weakening labour market reduces both the ability and the willingness to commit to a mortgage.
Investor demand → House prices	0.110	% per %	1–18 months, peaking around month 6	Medium	Investors are roughly a third of new lending. Their withdrawal or return moves the marginal bid.
Rents → House prices	0.220	% per %	6–48 months, peaking around month 18	Medium	Higher rents raise the yield on residential property, which supports what investors will pay for it.
Credit availability → House prices	0.120	% per pts	1–18 months, peaking around month 6	Low	Credit rationing constrains prices independently of the interest rate.
Consumer confidence → House prices	0.050	% per pts	0–12 months, peaking around month 3	Low	Housing markets have a momentum component that sentiment picks up.

Rents`housing.rental`v1.0.0

Rents from vacancy, incomes, landlord costs and student demand.

Medium

Method: Vacancy-driven reduced form

Calibrated over: 2005–2025

Inputs: rentalVacancy, householdDisposableIncome, mortgageRateVariable, studentPopulation

Outputs: rents

Limitations

· The vacancy–rent relationship is strongly non-linear near zero vacancy; a linear coefficient understates the tightest markets.
· Advertised rents lead measured rents by six to twelve months.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Rental regulation → Investor demand	-0.250	% per pts	6–60 months, peaking around month 24	Experimental	Binding rent controls reduce the return to supplying rental housing. This is the mechanism by which rent caps are argued to reduce rental supply over time — the empirical record is mixed and highly design-dependent.
Rental vacancy rate → Rents	-3.800	% per pp	1–18 months, peaking around month 6	High	Rents are extremely sensitive to vacancy when the market is tight. Below about 2% vacancy, small changes in availability produce large changes in what landlords can ask.
Household disposable income → Rents	0.380	% per %	3–36 months, peaking around month 12	Medium	Rents are bid against renter incomes; when incomes rise, so does what the market will bear.
Average outstanding mortgage rate → Rents	0.550	% per pp	3–36 months, peaking around month 12	Low	Whether landlords pass higher interest costs into rents is contested. In a tight market they largely can; in a loose one they cannot. Included with low confidence because the direction matters for who bears a rate rise.
International students → Rents	0.060	% per %	1–18 months, peaking around month 6	Medium	International students concentrate in inner-city rental submarkets, so their effect on national average rents understates their local effect substantially.
Rental regulation → Rents	-0.040	% per pts	0–18 months, peaking around month 6	Experimental	Rent caps reduce measured rents on regulated tenancies in the short run. The supply response modelled through investor demand works the other way over time, and the net long-run effect in this model can be positive.

Stock–flow balance`housing.balance`v1.0.0

Vacancy as the balance between dwelling stock and household formation.

Medium

Method: Stock–flow accounting

Calibrated over: 2005–2025

Inputs: dwellingStock, housingDemand, investorDemand

Outputs: rentalVacancy

Limitations

· Assumes a stable split between owner-occupied and rental stock.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Dwelling stock → Rental vacancy rate	1.250	pp per %	0–12 months, peaking around month 3	Medium	The stock–flow balance. More dwellings relative to households raises vacancy, which is the mechanism by which supply eventually reaches rents.
Underlying housing demand → Rental vacancy rate	-1.250	pp per %	0–12 months, peaking around month 3	Medium	The other side of the balance. More households chasing the same stock lowers vacancy.
Investor demand → Rental vacancy rate	0.012	pp per %	6–36 months, peaking around month 18	Low	Investor purchases convert owner-occupied dwellings into rental supply, which loosens the rental market even though it tightens the buyer market.

Housing demand`housing.demand`v1.0.0

Underlying dwelling demand from population and household size.

Medium

Method: Household formation

Calibrated over: 2011–2026

Inputs: population, studentPopulation, housePrices

Outputs: housingDemand

Limitations

· Household size responds to affordability with long and poorly measured lags.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Population → Underlying housing demand	1.000	% per %	0–9 months, peaking around month 3	High	Household formation follows population, adjusted for average household size.
International students → Underlying housing demand	0.050	% per %	0–9 months, peaking around month 3	Medium	Students form smaller households than average, so they add proportionally more dwelling demand per person.
House prices → Underlying housing demand	-0.080	% per %	6–48 months, peaking around month 18	Low	Expensive housing suppresses household formation — adult children stay home longer and share houses persist. A real but slow adjustment margin.

Housing supply`housing.supply`v1.0.0

Approvals responding to prices, costs, finance and planning capacity.

High

Method: Feasibility-driven approvals

Calibrated over: 2000–2025

Inputs: housePrices, constructionCosts, businessLendingRate, planningApprovalSpeed, zoningDensity

Outputs: dwellingApprovals

Limitations

· Australian supply elasticity is low and varies enormously by jurisdiction; a national coefficient hides that.
· Land availability and infrastructure servicing are not modelled.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
House prices → Dwelling approvals	1.150	% per %	3–30 months, peaking around month 12	High	The price signal is what actually triggers building. Australian supply elasticity is low by international standards — around one, when the US Sunbelt is several times that.
Construction costs → Dwelling approvals	-0.950	% per %	3–30 months, peaking around month 12	High	Projects proceed when the completed value exceeds the cost of building. Cost inflation stalls projects even when approvals are available.
Business lending rate → Dwelling approvals	-3.800	% per pp	3–30 months, peaking around month 12	Medium	Development is financed. Higher construction finance costs kill marginal projects, which is why rate rises reduce housing supply at the same time as they reduce demand.

Planning system`housing.planning`v0.3.0

Assessment speed and zoning capacity into approvals, including the congestion feedback.

Low

Method: Throughput reduced form

Calibrated over: 2015–2025

Inputs: planningApprovalSpeed, zoningDensity, dwellingApprovals

Outputs: approvalTime, dwellingApprovals

Limitations

· Planning is a state and local function with no consistent national dataset. This block is the weakest in the housing model.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Planning approval speed → Dwelling approvals	0.280	% per %	3–36 months, peaking around month 12	Low	Faster assessment brings forward projects and reduces holding costs. It cannot create feasibility where none exists, which is why the coefficient is well under one.
Zoning capacity → Dwelling approvals	0.320	% per %	6–60 months, peaking around month 24	Low	Upzoning raises the number of dwellings a site can yield. Realisation depends on land assembly and feasibility, and takes years.
Approval processing time → Dwelling approvals	-0.300	% per %	3–30 months, peaking around month 12	Low	Longer assessment times raise holding costs and risk, deterring marginal projects.
Planning approval speed → Approval processing time	-0.850	% per %	3–36 months, peaking around month 12	Low	Definitional inverse, less than one-for-one because complexity absorbs part of any throughput gain.
Dwelling approvals → Approval processing time	0.250	% per %	3–30 months, peaking around month 12	Low	More applications congest the same assessment staff, which slows everything down — a self-limiting mechanism in any approvals reform.

Construction pipeline`housing.pipeline`v1.0.0

Approvals converting into completions over the construction pipeline.

High

Method: Distributed lag

Calibrated over: 2010–2025

Inputs: dwellingApprovals, constructionEmployment

Outputs: dwellingCompletions

Limitations

· Apartment and detached pipelines have very different lags and are not separated.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Dwelling approvals → Dwelling completions	0.920	% per %	9–42 months, peaking around month 21	High	Approvals become completions after a long and variable construction pipeline — 18 months to three years for apartments. Some approvals lapse, which is why the coefficient is below one.
Construction employment → Dwelling completions	0.200	% per %	3–24 months, peaking around month 12	Medium	Delivery is constrained by trades capacity, not just by approvals.

Dwelling stock`housing.stock`v1.0.0

Completions accumulating into the dwelling stock, and the cumulative shortfall against demand.

High

Method: Stock accumulation

Calibrated over: n/a

Inputs: dwellingCompletions, housingDemand

Outputs: dwellingStock, housingDeficit

Limitations

· Demolitions and conversions are held constant.
· The 'shortfall' concept depends entirely on the assumed household formation rate and should be read as a scenario, not a fact.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Dwelling completions → Dwelling stock	0.015	% per %	immediate	High	Accumulation. About 168,000 completions a year against a stock of 11.4 million dwellings — which is why even a large increase in building changes the stock by fractions of a percent a year.
Underlying housing demand → Housing shortfall	2.000	unit per %	immediate	Low	Accumulation of the gap between dwellings needed and dwellings delivered.
Dwelling completions → Housing shortfall	-1.680	unit per %	immediate	Low	The other side of the accumulation.

Investor behaviour`housing.investors`v0.4.0

Investor demand responding to tax settings, financing costs, yields and expected gains.

Low

Method: After-tax return reduced form

Calibrated over: 2000–2025

Inputs: cgtDiscount, negativeGearingRestriction, mortgageRateVariable, rents

Outputs: investorDemand

Limitations

· The 1985–87 negative gearing episode is the only Australian natural experiment and its interpretation is genuinely disputed.
· Investor expectations of capital gain dominate the decision and are not observable.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
CGT discount → Investor demand	0.550	% per pp	3–30 months, peaking around month 12	Low	The capital gains tax discount improves the after-tax return on a negatively geared investment. Halving it would meaningfully reduce investor appetite, but by how much is genuinely uncertain.
Negative gearing restriction → Investor demand	-0.220	% per pts	3–30 months, peaking around month 12	Low	Quarantining rental losses removes the tax shelter that makes a cash-flow-negative purchase viable. The 1985–87 experiment is the only Australian natural experiment and it is heavily disputed in both directions.
Average outstanding mortgage rate → Investor demand	-7.500	% per pp	1–18 months, peaking around month 6	Medium	Investors are more rate-sensitive than owner-occupiers because the purchase is a financial decision with an alternative.
House prices → Investor demand	0.350	% per %	3–30 months, peaking around month 12	Low	Expected capital gains attract investors, which supports prices further — a reinforcing loop that is one reason housing cycles overshoot.
Rents → Investor demand	0.300	% per %	3–30 months, peaking around month 12	Medium	Higher yields attract capital into rental property.

Property taxes`housing.taxes`v0.4.0

Stamp duty and land tax into prices, turnover and investor returns.

Low

Method: Capitalisation reduced form

Calibrated over: 2010–2025

Inputs: stampDuty, landTax

Outputs: housePrices, investorDemand

Limitations

· State-level settings differ enormously; these are national approximations.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Stamp duty → House prices	-0.090	% per %	3–30 months, peaking around month 12	Low	Transaction taxes are partly capitalised into prices and mainly reduce turnover and mobility.
Land tax → Investor demand	-0.150	% per %	6–42 months, peaking around month 18	Low	Recurrent land taxation reduces the after-tax return to holding property.

Demand-side assistance`housing.demandside`v0.6.0

First home buyer grants and foreign buyer restrictions.

Medium

Method: Capitalisation reduced form

Calibrated over: 2000–2025

Inputs: firstHomeBuyerGrant, foreignBuyerRestriction

Outputs: housePrices

Limitations

· Capitalisation estimates range from 30% to over 100% depending on the study and the market segment.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
First home buyer grant → House prices	0.00006	% per unit	1–18 months, peaking around month 6	Medium	Demand-side grants are substantially capitalised into prices where supply cannot respond. The default here is roughly half the grant showing up in the price paid — so a $10,000 grant leaves the buyer about $5,000 ahead, not $10,000. This is the central critique of first home buyer assistance, and the assumption is adjustable because the estimates range from 30% to over 100%.
Foreign buyer restrictions → House prices	-0.025	% per pts	3–30 months, peaking around month 12	Low	Foreign buyers are a small share of established-dwelling transactions nationally, though concentrated in particular submarkets, so the national price effect of restricting them is modest.

Public housing`housing.public`v0.6.0

Public and community housing investment into supply and rental pressure.

Medium

Method: Direct supply arithmetic

Calibrated over: 2020–2026

Inputs: publicHousingInvestment

Outputs: dwellingApprovals, rents, homelessnessRisk

Limitations

· Delivery lags for social housing programmes have historically exceeded planning assumptions substantially.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Public housing investment → Rents	-0.180	% per unit	24–96 months, peaking around month 48	Medium	Public and community housing adds to the rental stock and removes households from the private queue. The lag is long because these dwellings take years to deliver.
Public housing investment → Dwelling approvals	1.600	% per unit	6–42 months, peaking around month 18	Medium	Roughly 2,800 dwellings per billion dollars at current construction costs, against a base of about 178,000 approvals a year.

Construction costs`housing.costs`v0.8.0

Building costs from wages, materials, capacity and competing public works.

Medium

Method: Cost accounting with capacity constraint

Calibrated over: 2015–2025

Inputs: wageLevel, dwellingApprovals, infrastructureSpend, exchangeRate

Outputs: constructionCosts

Limitations

· Capacity constraints are highly non-linear near full utilisation.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Dwelling approvals → Construction costs	0.220	% per %	3–30 months, peaking around month 12	Medium	The construction sector is capacity-constrained. Trying to build more bids up the price of trades and materials, which offsets part of the intended supply increase.
Wage level → Construction costs	0.420	% per %	3–30 months, peaking around month 12	Medium	Labour is roughly 40% of residential construction cost.
Infrastructure investment → Construction costs	0.060	% per %	6–42 months, peaking around month 18	Low	Large public projects compete with housing for the same trades and equipment. A frequently overlooked reason infrastructure and housing programmes undercut each other.
Exchange rate (TWI) → Construction costs	-0.120	% per %	3–24 months, peaking around month 9	Medium	A meaningful share of building materials is imported.
Carbon price → Construction costs	0.020	% per unit	6–60 months, peaking around month 24	Low	Cement, steel and glass are emissions-intensive, so a carbon price raises the cost of building.

Construction employment`housing.employment`v0.8.0

Construction employment following the building pipeline.

High

Method: Activity reduced form

Calibrated over: 2010–2025

Inputs: dwellingCompletions, dwellingApprovals, infrastructureSpend

Outputs: constructionEmployment

Limitations

· Skilled trades shortages are not modelled as a hard constraint.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Dwelling completions → Construction employment	0.520	% per %	0–12 months, peaking around month 3	High	Residential building is about half of construction employment.
Dwelling approvals → Construction employment	0.300	% per %	3–18 months, peaking around month 9	Medium	Firms hire ahead of the pipeline they can see, so employment responds to approvals before completions arrive.
Infrastructure investment → Construction employment	0.180	% per %	6–36 months, peaking around month 18	Medium	Engineering construction draws on the same workforce as residential building.

Affordability`housing.affordability`v1.0.0

Price-to-income ratio.

High

Method: Identity

Calibrated over: n/a

Inputs: housePrices, wageLevel

Outputs: housingAffordability

Limitations

· A crude measure that ignores interest rates, which is why borrowing capacity is modelled separately.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
House prices → Price to income ratio	1.000	% per %	immediate	High	Numerator of the price-to-income ratio.
Wage level → Price to income ratio	-1.000	% per %	immediate	High	Denominator of the price-to-income ratio.

First home buyer access`housing.entry`v0.4.0

Whether entry to ownership is reachable, combining deposit, capacity and price.

Low

Method: Composite index

Calibrated over: 2015–2025

Inputs: borrowingCapacity, housePrices, firstHomeBuyerGrant, wageLevel

Outputs: firstHomeBuyerAccess

Limitations

· A constructed index with no observable counterpart. Directional only.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Borrowing capacity → First home buyer access	0.220	pts per %	0–9 months, peaking around month 3	Low	How much a first buyer can borrow is half the entry problem.
House prices → First home buyer access	-0.280	pts per %	0–18 months, peaking around month 6	Low	The other half is the deposit, which scales with the price and is the binding constraint for most first buyers.
First home buyer grant → First home buyer access	0.00035	pts per unit	0–9 months, peaking around month 3	Low	A grant helps with the deposit hurdle directly — which is why it helps the first cohort to receive it more than later cohorts, who face the capitalised price.
Stamp duty → First home buyer access	-0.020	pts per %	0–9 months, peaking around month 3	Low	Transfer duty must be paid in cash on top of the deposit.
Wage level → First home buyer access	0.150	pts per %	0–18 months, peaking around month 6	Low	Higher incomes make saving a deposit faster.

Business investment`business.investment`v0.8.0

Investment from the cost of capital, tax settings, demand and confidence.

Medium

Method: Neoclassical accelerator

Calibrated over: 1995–2025

Inputs: businessLendingRate, companyTaxRate, gdpReal, businessConfidence

Outputs: businessInvestment

Limitations

· Mining investment follows commodity prices, which are exogenous here, and it dominates the aggregate.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Business lending rate → Business investment	-2.600	% per pp	3–36 months, peaking around month 12	Medium	The cost of capital determines which projects clear their hurdle rate.
Company tax rate → Business investment	-0.850	% per pp	6–60 months, peaking around month 24	Medium	Company tax reduces the after-tax return on investment. Australia's dividend imputation system dampens this channel for domestically-owned capital, which is why the coefficient is modest.
Business confidence → Business investment	0.280	% per pts	1–18 months, peaking around month 6	Low	Expectations of future demand drive investment commitments as much as the cost of capital does.
Real GDP → Business investment	1.350	% per %	3–30 months, peaking around month 12	Medium	The accelerator: firms invest when they are running out of capacity. This amplifies cycles in both directions.
Exchange rate (TWI) → Business investment	-0.100	% per %	6–48 months, peaking around month 18	Low	A stronger dollar squeezes trade-exposed margins, though it also cheapens imported capital equipment. The net sign is not certain.

Business incentives`business.incentives`v0.2.0

R&D and grant programmes into investment.

Low

Method: Reduced form

Calibrated over: 2010–2025

Inputs: rdCredit

Outputs: businessInvestment

Limitations

· Additionality — how much of the subsidised activity would have happened anyway — is poorly identified.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
R&D tax incentive → Business investment	0.045	% per %	6–60 months, peaking around month 24	Low	R&D incentives shift some spending into eligible categories; how much is genuinely additional is heavily debated.

Business confidence`business.sentiment`v0.4.0

Confidence from trading conditions, policy settings and sales.

Low

Method: Reduced form

Calibrated over: 2000–2025

Inputs: outputGap, cashRate, retailTurnover

Outputs: businessConfidence

Limitations

· Survey balances are noisy and revised.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Output gap → Business confidence	3.200	pts per pp	0–9 months, peaking around month 3	Low	Confidence tracks trading conditions.
RBA cash rate → Business confidence	-2.500	pts per pp	0–9 months, peaking around month 3	Low	Tighter policy signals weaker demand ahead.
Retail turnover → Business confidence	0.450	pts per %	0–9 months, peaking around month 3	Low	Actual sales are the most immediate evidence firms have about conditions.

Retail`business.retail`v0.9.0

Retail turnover as the volatile end of consumption.

High

Method: Share elasticity

Calibrated over: 2005–2025

Inputs: householdConsumption

Outputs: retailTurnover

Limitations

· The goods/services mix has shifted structurally, which changes this elasticity over time.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Consumer spending → Retail turnover	1.350	% per %	0–3 months, peaking around month 1	High	Retail is the discretionary end of consumption, so it moves further than total spending in both directions.

Business distress`business.distress`v0.3.0

Insolvencies from financing costs, revenue and fixed cost burden.

Low

Method: Reduced form

Calibrated over: 2015–2025

Inputs: businessLendingRate, retailTurnover, payrollTaxRate

Outputs: businessInsolvencies

Limitations

· Insolvency counts are heavily affected by administrative and enforcement changes, notably ATO recovery activity.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Business lending rate → Business insolvencies	6.500	% per pp	6–42 months, peaking around month 18	Low	Debt-servicing pressure pushes marginal firms over. Construction and hospitality are the most exposed.
Retail turnover → Business insolvencies	-2.200	% per %	3–30 months, peaking around month 12	Low	Weak revenue is the proximate cause of most business failures.
Payroll tax rate → Business insolvencies	2.000	% per pp	6–42 months, peaking around month 18	Low	A fixed cost on employment weighs hardest on low-margin, labour-intensive firms.

Trade`trade.flows`v0.7.0

Exports and imports from the exchange rate, domestic demand, tariffs and student flows.

Medium

Method: Elasticity

Calibrated over: 2000–2025

Inputs: exchangeRate, householdConsumption, tariffRate, studentPopulation

Outputs: exports, imports

Limitations

· Commodity prices and global demand are exogenous and dominate Australian export values.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Exchange rate (TWI) → Exports	-0.420	% per %	6–48 months, peaking around month 18	Medium	A stronger dollar makes Australian goods and services dearer abroad. Resource exports are less price-sensitive than services, which is why the coefficient is well below one.
International students → Exports	0.068	% per %	3–30 months, peaking around month 12	High	Education is roughly 7% of total exports. Cutting student numbers to relieve rental pressure is therefore also a cut to export income — one of the sharpest trade-offs in the model.
Average tariff rate → Exports	-0.250	% per pp	6–60 months, peaking around month 24	Low	Proxy for retaliation and for the higher input costs faced by exporters. Highly dependent on which trading partners respond.
Consumer spending → Imports	0.620	% per %	0–12 months, peaking around month 3	High	A substantial share of consumer goods is imported, so domestic demand leaks abroad.
Business investment → Imports	0.300	% per %	0–12 months, peaking around month 3	High	Capital equipment is heavily imported.
Exchange rate (TWI) → Imports	0.300	% per %	3–30 months, peaking around month 12	Medium	A stronger dollar makes imports cheaper and therefore more attractive.
Average tariff rate → Imports	-1.200	% per pp	3–30 months, peaking around month 12	Medium	The direct purpose of a tariff.

Public demand`fiscal.demand`v1.0.0

Converting spending programmes into demand for goods and services, net of transfers and imports.

High

Method: Accounting shares

Calibrated over: 2025–26 budget structure

Inputs: govSpending, infrastructureSpend, healthSpend, educationSpend, defenceSpend

Outputs: publicDemand

Limitations

· Programme-level import content is approximated at the category level.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Government spending → Public demand	0.700	% per %	0–3 months, peaking around month 1	High	Only part of government payments buys goods and services directly — the rest is transfers, which reach demand through household spending instead.
Infrastructure investment → Public demand	0.180	% per %	3–24 months, peaking around month 9	High	Public investment is demand for construction output, with a lag for procurement and delivery.
Health expenditure → Public demand	0.210	% per %	0–9 months, peaking around month 3	High	Health spending is largely wages for health workers, so it reaches demand quickly and almost entirely domestically.
Education expenditure → Public demand	0.095	% per %	0–9 months, peaking around month 3	High	Similarly labour-intensive and domestic.
Defence expenditure → Public demand	0.050	% per %	3–36 months, peaking around month 12	Medium	Defence has a high import content and long procurement lead times, so its domestic demand impact per dollar is well below other spending.
Public housing investment → Public demand	0.154	% per unit	6–42 months, peaking around month 18	Medium	Each billion dollars is about 0.15% of public demand, arriving as construction activity.

Revenue`fiscal.receipts`v1.0.0

Income, company and GST receipts from rates and bases, including bracket creep.

High

Method: Tax base arithmetic with elasticities

Calibrated over: 2025–26 budget

Inputs: incomeTaxRate, companyTaxRate, gstRate, wageLevel, householdConsumption

Outputs: incomeTaxReceipts, companyTaxReceipts, gstReceipts

Limitations

· Behavioural responses to tax changes are approximated by a single offset per head, not modelled.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Average income tax rate → Income tax receipts	5.500	% per pp	0–12 months, peaking around month 3	High	A one-point rise in the effective average rate raises about $20bn against a $335bn base, net of a small behavioural offset.
Wage level → Income tax receipts	1.450	% per %	0–18 months, peaking around month 6	High	Bracket creep. Because thresholds are not indexed, income tax receipts rise faster than wages — an automatic tax increase that requires no decision.
Employment → Income tax receipts	1.150	% per %	0–12 months, peaking around month 3	High	More taxpayers, and marginal workers entering at positive average rates.
Company tax rate → Company tax receipts	2.900	% per pp	6–36 months, peaking around month 18	High	Mechanical yield of about $4.6bn per point against a $138bn base, less a behavioural offset for profit shifting and reduced investment.
Real GDP → Company tax receipts	1.850	% per %	3–30 months, peaking around month 12	Medium	Company tax is the most cyclical major revenue head because profits are the residual after costs.
GST rate → GST receipts	9.500	% per pp	0–9 months, peaking around month 3	High	Close to mechanical: a one-point rise on a ten-point rate is about 10% more revenue, less a small consumption response.
Consumer spending → GST receipts	1.000	% per %	0–6 months, peaking around month 2	High	GST receipts track taxable consumption almost exactly.

Payments`fiscal.payments`v1.0.0

Commonwealth payments assembled from programme levers.

High

Method: Programme accounting

Calibrated over: 2025–26 budget

Inputs: govSpending, healthSpend, educationSpend, defenceSpend, pensionPayment, jobSeekerPayment

Outputs: govPayments

Limitations

· Commonwealth only. State budgets are not consolidated.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Government spending → Government payments	1.000	% per %	0–3 months, peaking around month 1	High	Definitional.
Health expenditure → Government payments	0.181	% per %	0–3 months, peaking around month 1	High	Health is about 18% of Commonwealth payments.
Education expenditure → Government payments	0.081	% per %	0–3 months, peaking around month 1	High	Education is about 8% of Commonwealth payments.
Defence expenditure → Government payments	0.076	% per %	0–3 months, peaking around month 1	High	Defence is about 7.6% of Commonwealth payments.
Infrastructure investment → Government payments	0.155	% per %	0–9 months, peaking around month 3	Medium	Public investment across all levels of government, scaled to the Commonwealth payments base.
JobSeeker payment → Government payments	0.019	% per %	0–3 months, peaking around month 1	High	JobSeeker is a small share of the payments envelope.
Age pension → Government payments	0.077	% per %	0–3 months, peaking around month 1	High	The age pension is about 7.7% of Commonwealth payments and rising with the age structure.
Commonwealth Rent Assistance → Government payments	0.00700	% per %	0–3 months, peaking around month 1	High	Rent assistance is small in budget terms — one reason it is often proposed as a low-cost lever.
Public housing investment → Government payments	0.131	% per unit	0–9 months, peaking around month 3	High	Each billion dollars is 0.13% of the payments envelope.
Childcare subsidy rate → Government payments	0.030	% per pp	0–9 months, peaking around month 3	High	Each point of subsidy rate is roughly $230m a year.
Renewable energy support → Government payments	0.00500	% per %	0–12 months, peaking around month 3	Medium	Renewable support scaled into the payments envelope.
Energy bill relief → Government payments	0.00000	% per unit	0–3 months, peaking around month 1	High	A rebate to 11.15 million households: each dollar per household is about $11m, or 0.0015% of payments.

Automatic stabilisers`fiscal.stabilisers`v1.0.0

Income support responding automatically to unemployment.

High

Method: Caseload arithmetic

Calibrated over: 2025–26 payment rates

Inputs: unemployment

Outputs: govPayments

Limitations

· Assumes stable take-up rates and eligibility.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Unemployment rate → Government payments	0.420	% per pp	1–18 months, peaking around month 6	High	The automatic stabilisers. Each point of unemployment is roughly 155,000 more people on income support, costing about $3bn a year without any decision being taken.

Budget balance`fiscal.balance`v1.0.0

Receipts less payments.

High

Method: Identity

Calibrated over: n/a

Inputs: incomeTaxReceipts, companyTaxReceipts, gstReceipts, govPayments

Outputs: budgetBalance

Limitations

· Excludes state budgets and off-balance-sheet investments.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Income tax receipts → Budget balance	3.350	unit per %	immediate	High	Each percent of income tax receipts is $3.35bn.
Company tax receipts → Budget balance	1.380	unit per %	immediate	High	Each percent of company tax receipts is $1.38bn.
GST receipts → Budget balance	0.960	unit per %	immediate	High	Each percent of GST receipts is $0.96bn.
Government payments → Budget balance	-7.620	unit per %	immediate	High	Each percent of payments is $7.62bn out the door.
Carbon price → Budget balance	0.300	unit per unit	3–30 months, peaking around month 12	Low	Revenue from a carbon price on covered emissions, before any compensation package.
Fuel excise → Budget balance	0.320	unit per unit	0–9 months, peaking around month 3	High	Fuel excise raises about $16bn at 50.8 cents a litre, so roughly $320m per cent.
Superannuation earnings tax → Budget balance	0.850	unit per pp	3–30 months, peaking around month 12	Medium	Superannuation earnings tax raises about $12.5bn at 15%, so about $850m per point before behavioural response.
Superannuation earnings tax → Equity market	-0.350	% per pp	6–60 months, peaking around month 24	Low	Higher taxation of superannuation earnings marginally reduces the after-tax return to holding domestic assets.

Debt dynamics`fiscal.debt`v1.0.0

Deficits accumulating into net debt.

High

Method: Stock accumulation

Calibrated over: n/a

Inputs: budgetBalance

Outputs: netDebt

Limitations

· Valuation effects and non-cash items are ignored.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Budget balance → Net debt	-0.177	% per unit	immediate	High	Accumulation. Every billion dollars of deficit adds a billion to net debt, which is 0.18% of the $566bn stock.

Debt financing`fiscal.financing`v0.4.0

The cost of servicing debt, and the mild effect of debt levels on yields.

Low

Method: Reduced form

Calibrated over: 2000–2025

Inputs: netDebt, bondYield10y

Outputs: govPayments, bondYield10y

Limitations

· Australian yields are dominated by global rates; the domestic debt-level effect is small and hard to identify.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Net debt → 10-year bond yield	0.00400	pp per %	6–48 months, peaking around month 18	Low	More government debt on issue puts mild upward pressure on yields. For an economy with Australia's debt level the effect is small, and it is swamped by global factors.
10-year bond yield → Government payments	0.900	% per pp	6–60 months, peaking around month 24	Medium	Debt servicing. A point on yields is roughly $5.7bn a year once the debt stock rolls over — the mechanism by which deficits become self-reinforcing.

Income support`social.transfers`v1.0.0

Transfer payments into household income.

High

Method: Programme accounting

Calibrated over: 2025–26 payment rates

Inputs: jobSeekerPayment, pensionPayment, rentAssistance

Outputs: householdDisposableIncome

Limitations

· Aggregate shares. The distributional effect is the whole point and comes from the microsimulation.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
JobSeeker payment → Household disposable income	0.00950	% per %	0–6 months, peaking around month 2	High	JobSeeker outlays are under 1% of aggregate household income — but they are close to 100% of income for the households receiving them, which is why the cohort view matters more than this number.
Age pension → Household disposable income	0.038	% per %	0–6 months, peaking around month 2	High	The age pension is roughly $59bn a year, just under 4% of household disposable income.
Commonwealth Rent Assistance → Household disposable income	0.00350	% per %	0–6 months, peaking around month 2	High	Commonwealth Rent Assistance is small in aggregate and highly targeted at low-income renters.

Financial stress`social.stress`v0.5.0

A 0–100 construct from debt servicing, housing costs, real income, savings buffer and employment risk.

Low

Method: Composite proxy index

Calibrated over: 2015–2025 survey anchors

Inputs: mortgagePayment, rents, realDisposableIncome, unemployment, priceLevel

Outputs: financialStress

Limitations

· A construct, not a measurement. It is anchored to survey incidence at the baseline but its movements are modelled, not observed.
· No clinical or mental-health interpretation is intended or supported.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Average mortgage repayment → Financial stress index	0.550	pts per %	0–6 months, peaking around month 2	Low	Debt servicing is the largest single contributor to measured financial stress among mortgagor households.
Rents → Financial stress index	0.420	pts per %	0–9 months, peaking around month 3	Low	Rent is a larger share of income for renters than mortgage payments are for owners, and there is no offsetting asset.
Real disposable income → Financial stress index	-1.500	pts per %	0–9 months, peaking around month 3	Low	Real income is what determines whether the bills can be paid.
Unemployment rate → Financial stress index	3.200	pts per pp	3–24 months, peaking around month 9	Low	Job loss is the most severe financial shock a household experiences, and fear of it raises stress across people who keep their jobs.
Consumer price level → Financial stress index	0.850	pts per %	0–9 months, peaking around month 3	Low	Cost-of-living pressure, particularly on essentials that cannot be substituted away from.
Household saving ratio → Financial stress index	-0.350	pts per pp	0–18 months, peaking around month 6	Low	A savings buffer is what separates a setback from a crisis.
Interest income of savers → Financial stress index	-0.060	pts per %	0–9 months, peaking around month 3	Low	Interest income relieves pressure for savers — the offsetting side of a rate rise that aggregate stress measures usually hide.

Housing stress`social.housingstress`v0.6.0

The share of households above the 30%-of-income housing cost threshold, computed by integrating a lognormal distribution rather than scaling a mean.

Low

Method: Threshold crossing over a dispersed distribution

Calibrated over: 2019–2025

Inputs: mortgagePayment, rents, wageLevel, unemployment

Outputs: mortgageStressShare, rentalStressShare

Limitations

· The 30% rule is a convention that treats a high-income household spending 31% the same as a low-income one. Results are sensitive to the threshold and to the assumed dispersion.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Average mortgage repayment → Mortgage stress	0.620	pp per %	0–6 months, peaking around month 2	Low	Households sitting just under the 30%-of-income threshold cross it when repayments rise. The share crossing depends on how tightly households are bunched around the threshold.
Wage level → Mortgage stress	-0.550	pp per %	0–12 months, peaking around month 3	Low	Income growth moves households back below the threshold.
Unemployment rate → Mortgage stress	0.900	pp per pp	3–30 months, peaking around month 12	Low	Losing an income is the fastest route into housing stress.
Rents → Rental stress	0.750	pp per %	0–9 months, peaking around month 3	Low	Renters are more tightly bunched around the stress threshold than mortgagors, so a given percentage rise pushes more of them over it.
Wage level → Rental stress	-0.650	pp per %	0–12 months, peaking around month 3	Low	Renter incomes are lower and grow more slowly than average, so this offset is weaker than it looks.
Commonwealth Rent Assistance → Rental stress	-0.020	pp per %	0–9 months, peaking around month 3	Low	Rent assistance directly reduces the housing cost ratio for recipients — though in a tight market part of it is captured by landlords.
Unemployment rate → Rental stress	1.100	pp per pp	3–30 months, peaking around month 12	Low	Renters have thinner buffers than owners, so job loss translates into housing stress faster.

Poverty`social.poverty`v0.5.0

Poverty and child poverty responding to incomes, transfers, employment and rents.

Low

Method: Relative threshold reduced form

Calibrated over: 2019–2025

Inputs: realDisposableIncome, unemployment, jobSeekerPayment, pensionPayment, rents

Outputs: povertyRate, childPovertyRate

Limitations

· A relative poverty line moves with the median, so a policy that lifts everyone can leave the rate unchanged.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Real disposable income → Poverty rate	-0.300	pp per %	3–36 months, peaking around month 12	Low	Relative poverty responds to income growth at the bottom of the distribution, not the average — so this coefficient is smaller than a naive reading suggests.
Unemployment rate → Poverty rate	0.550	pp per pp	3–30 months, peaking around month 12	Low	Income support rates sit below the poverty line, so unemployment moves households across it almost mechanically.
JobSeeker payment → Poverty rate	-0.030	pp per %	0–18 months, peaking around month 6	Low	Raising the payment moves recipients toward and across the poverty line. One of the most direct poverty levers available.
Age pension → Poverty rate	-0.045	pp per %	0–18 months, peaking around month 6	Low	The age pension is the main income of a large group clustered near the poverty line.
Rents → Poverty rate	0.100	pp per %	3–30 months, peaking around month 12	Low	After-housing-cost poverty is far more sensitive to rents than before-housing-cost measures suggest.
Minimum wage → Poverty rate	-0.035	pp per %	3–36 months, peaking around month 12	Low	Minimum wage rises reduce in-work poverty, though many minimum-wage earners are in higher-income households.
Poverty rate → Child poverty rate	1.280	pp per pp	0–9 months, peaking around month 3	Low	Children are over-represented below the poverty line, so child poverty moves further than the general rate.
Out-of-pocket childcare cost → Child poverty rate	0.020	pp per %	6–42 months, peaking around month 18	Low	Childcare costs reduce both disposable income and the viability of a second income.
Commonwealth Rent Assistance → Child poverty rate	-0.030	pp per %	0–18 months, peaking around month 6	Low	Families with children are heavily represented among rent assistance recipients.

Inequality`social.inequality`v0.4.0

The Gini coefficient responding to tax settings, asset prices and employment.

Low

Method: Reduced form

Calibrated over: 2005–2025

Inputs: incomeTaxRate, housePrices, unemployment, minimumWagePolicy

Outputs: gini

Limitations

· Income and wealth inequality move differently and are conflated here.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Average income tax rate → Income inequality (Gini)	-0.00160	unit per pp	3–30 months, peaking around month 12	Low	Australia's income tax is progressive, so raising the average rate compresses the after-tax distribution.
House prices → Income inequality (Gini)	0.00090	unit per %	6–60 months, peaking around month 24	Low	Housing wealth is unequally held, so price growth widens the wealth gap and, through imputed rent and investment income, the income gap.
Unemployment rate → Income inequality (Gini)	0.00350	unit per pp	3–36 months, peaking around month 12	Low	Job losses fall disproportionately on lower-income workers.
Minimum wage → Income inequality (Gini)	-0.00110	unit per %	6–60 months, peaking around month 24	Low	Raising the wage floor compresses the bottom of the distribution.
JobSeeker payment → Income inequality (Gini)	-0.00100	unit per %	0–18 months, peaking around month 6	Low	Transfers to the lowest-income households are the most direct inequality lever.
CGT discount → Income inequality (Gini)	0.00035	unit per pp	12–84 months, peaking around month 36	Low	Capital gains accrue overwhelmingly to higher-income households.

Housing insecurity`social.housing`v0.3.0

Risk of housing loss from rents, vacancy, employment and social housing supply.

Low

Method: Composite proxy

Calibrated over: 2019–2025

Inputs: rents, rentalVacancy, unemployment, publicHousingInvestment

Outputs: homelessnessRisk

Limitations

· A risk proxy, not a count of people experiencing homelessness. Homelessness has causes far outside the economic variables modelled here.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Rents → Homelessness risk	1.400	% per %	3–36 months, peaking around month 12	Low	Rent rises are the most common precipitating factor in housing loss for low-income renters.
Rental vacancy rate → Homelessness risk	-6.000	% per pp	3–36 months, peaking around month 12	Low	When there is nothing to move to, a tenancy ending becomes a crisis rather than an inconvenience.
Unemployment rate → Homelessness risk	4.500	% per pp	3–36 months, peaking around month 12	Low	Income loss combined with a tight rental market is the standard pathway into housing insecurity.
Public housing investment → Homelessness risk	-1.200	% per unit	24–96 months, peaking around month 48	Low	Social housing directly houses the people most at risk — but only once built.
Commonwealth Rent Assistance → Homelessness risk	-0.250	% per %	0–18 months, peaking around month 6	Low	Cash assistance relieves the immediate affordability pressure faster than any supply response can.

Social cohesion`social.cohesion`v0.2.0

A speculative index linking inequality, unemployment, housing and congestion to community stability.

Experimental

Method: Composite proxy

Calibrated over: cross-country associations

Inputs: gini, unemployment, housingSecurity, infrastructurePressure

Outputs: socialCohesion

Limitations

· The weakest block in the model. Associations are documented; causality is not. Use for direction of travel only, if at all.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Income inequality (Gini) → Social cohesion	-22.000	pts per unit	12–84 months, peaking around month 36	Experimental	The association between inequality and social trust is documented across countries but the causal direction is not established. The most speculative relationship in the model.
Unemployment rate → Social cohesion	-1.400	pts per pp	6–60 months, peaking around month 24	Experimental	Sustained joblessness erodes social participation and community attachment.
Housing security → Social cohesion	0.220	pts per pts	12–84 months, peaking around month 36	Experimental	Stable housing is what allows people to build local ties.
Infrastructure pressure → Social cohesion	-0.100	pts per pts	12–84 months, peaking around month 36	Experimental	Congestion and service strain reduce discretionary time and community participation.

Infrastructure pressure`social.infrastructure`v0.3.0

Congestion and service strain from population against capacity.

Low

Method: Composite proxy

Calibrated over: 2015–2025

Inputs: population, infrastructureSpend, dwellingStock

Outputs: infrastructurePressure

Limitations

· No spatial detail. Congestion is intensely local and a national index cannot represent it.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Population → Infrastructure pressure	3.000	pts per %	6–60 months, peaking around month 24	Low	Congestion and service queues rise with population unless capacity keeps pace. A constructed proxy, not a measurement.
Infrastructure investment → Infrastructure pressure	-0.350	pts per %	12–84 months, peaking around month 36	Low	Capacity investment relieves pressure, but only after it is delivered, which takes years.
Dwelling stock → Infrastructure pressure	-0.800	pts per %	12–84 months, peaking around month 36	Low	More housing relieves crowding and reduces the commuting distances that generate congestion.

Healthcare access`health.access`v0.4.0

Access from funding, out-of-pocket costs, waiting times and population.

Low

Method: Composite proxy

Calibrated over: 2018–2025

Inputs: healthSpend, healthOutOfPocket, electiveWaitTime, population

Outputs: healthAccess

Limitations

· Workforce availability, not funding, is the binding constraint in much of the system, and it is not modelled.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Health expenditure → Healthcare access	0.220	pts per %	6–60 months, peaking around month 24	Low	More funding buys more services, though the relationship between dollars and access is mediated by workforce availability, which money cannot buy quickly.
Out-of-pocket health costs → Healthcare access	-0.090	pts per %	3–30 months, peaking around month 12	Low	Cost is a documented barrier to seeking care, particularly for lower-income households.
Elective surgery wait → Healthcare access	-0.050	pts per %	3–30 months, peaking around month 12	Low	Waiting is a form of rationing.
Population → Healthcare access	-0.100	pts per %	6–60 months, peaking around month 24	Low	More people using a fixed service capacity means less access each, until capacity catches up.

Health costs`health.costs`v0.5.0

Out-of-pocket costs from rebate settings and general price growth.

Medium

Method: Reduced form

Calibrated over: 2015–2025

Inputs: healthSpend, priceLevel

Outputs: healthOutOfPocket

Limitations

· Provider fee-setting behaviour is approximated by a single elasticity.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Health expenditure → Out-of-pocket health costs	-0.550	% per %	6–42 months, peaking around month 18	Medium	Higher rebates and bulk-billing incentives shift cost from households to the Commonwealth.
Consumer price level → Out-of-pocket health costs	0.600	% per %	3–30 months, peaking around month 12	Medium	Fees rise with general costs, faster than indexed rebates.

Health capacity`health.capacity`v0.3.0

Waiting times from funding and demographic demand.

Low

Method: Reduced form

Calibrated over: 2015–2025

Inputs: healthSpend, population

Outputs: electiveWaitTime

Limitations

· Hospitals are state-run; Commonwealth funding is only part of the picture.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Health expenditure → Elective surgery wait	-0.750	% per %	6–60 months, peaking around month 24	Low	Funding buys theatre time and staff, with a substantial lag for recruitment.
Population → Elective surgery wait	1.100	% per %	6–60 months, peaking around month 24	Low	Demand grows with the population and, more than proportionally, with its age structure.

Childcare`education.childcare`v0.7.0

Subsidy rates into out-of-pocket cost, with a partial fee response.

Medium

Method: Net fee arithmetic with provider response

Calibrated over: 2018–2026

Inputs: childcareSubsidy, wageLevel

Outputs: childcareCost

Limitations

· The fee response to subsidy increases is contested and depends on local market concentration.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Childcare subsidy rate → Out-of-pocket childcare cost	-2.630	% per pp	0–9 months, peaking around month 3	High	Arithmetic of the net fee: at a 62% subsidy rate, each additional point cuts the out-of-pocket cost by about 2.6%. Provider fee responses are modelled separately and offset part of this.
Wage level → Out-of-pocket childcare cost	0.700	% per %	3–30 months, peaking around month 12	Medium	Childcare is a labour-intensive service, so its cost tracks wages closely. Part of any subsidy increase is absorbed by fee rises.

Education access`education.access`v0.3.0

Resourcing and affordability of schools, tertiary and vocational education.

Low

Method: Composite proxy

Calibrated over: 2018–2025

Inputs: educationSpend, population

Outputs: educationAccess

Limitations

· Spending is a weak proxy for access and a weaker one for outcomes. Outcomes are not modelled at all.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Education expenditure → Education access	0.280	pts per %	12–84 months, peaking around month 36	Low	Funding affects resourcing and affordability. The link from spending to outcomes is weaker still and is not modelled.
Population → Education access	-0.120	pts per %	6–60 months, peaking around month 24	Low	Enrolment growth against fixed capacity.

Migration`demographic.migration`v1.0.0

Planning levels into net overseas migration, with a feedback from labour market conditions.

High

Method: Programme accounting with endogenous response

Calibrated over: 2010–2026

Inputs: netMigrationPolicy, studentVisaPolicy, unemployment

Outputs: netMigration, studentPopulation

Limitations

· Temporary migration is demand-driven and only loosely controlled by policy — planning levels bind on the permanent programme far more tightly than on net migration.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Net overseas migration → Net overseas migration	1.000	% per %	0–6 months, peaking around month 2	High	The planning level translates into actual net migration with a short administrative lag. Temporary flows respond faster than permanent ones.
International students → Net overseas migration	0.550	% per %	0–9 months, peaking around month 3	High	Students are a large share of net overseas migration, though less than their gross arrivals suggest because most eventually depart.
Unemployment rate → Net overseas migration	-2.500	% per pp	6–42 months, peaking around month 18	Low	Migration is partly self-regulating: a weak labour market reduces arrivals and increases departures, particularly among temporary visa holders.
International students → International students	1.000	% per %	0–9 months, peaking around month 3	High	Definitional, with a lag for enrolment cycles.

Population`demographic.population`v1.0.0

Population as the accumulation of natural increase and net migration.

High

Method: Cohort accumulation

Calibrated over: n/a

Inputs: netMigration

Outputs: population

Limitations

· No age structure is carried forward, so ageing effects on participation and health demand are approximated.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Net overseas migration → Population	0.00933	% per %	immediate	High	Accumulation. Net migration of about 260,000 against a population of 27.85 million means a 1% change in migration adds under 0.01% to population each year — population responds to migration slowly, but permanently.

Housing security`wellbeing.housing`v0.4.0

Confidence of remaining in current housing.

Low

Method: Composite proxy

Calibrated over: 2019–2025

Inputs: rents, rentalVacancy, mortgageStressShare

Outputs: housingSecurity

Limitations

· A construct. Tenure law differs by state and is only crudely represented.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Rents → Housing security	-0.320	pts per %	0–12 months, peaking around month 3	Low	Affordability is the foundation of feeling secure in a home.
Rental vacancy rate → Housing security	1.800	pts per pp	0–18 months, peaking around month 6	Low	Having somewhere else to go is what makes a tenancy feel secure.
Mortgage stress → Housing security	-0.550	pts per pp	0–12 months, peaking around month 3	Low	Owners under repayment pressure face their own form of housing insecurity.
Rental regulation → Housing security	0.120	pts per pts	0–18 months, peaking around month 6	Experimental	Tenure protections raise security for sitting tenants. Whether that survives the supply response is the contested part.

Employment security`wellbeing.employment`v0.4.0

Perceived job security from labour market conditions.

Low

Method: Composite proxy

Calibrated over: 2019–2025

Inputs: unemployment, underemployment, jobVacancies

Outputs: employmentSecurity

Limitations

· A construct anchored to survey measures of job security.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Unemployment rate → Employment security	-4.200	pts per pp	0–12 months, peaking around month 3	Low	The unemployment rate is the clearest public signal of how easy it would be to find another job.
Underemployment rate → Employment security	-1.600	pts per pp	0–12 months, peaking around month 3	Low	Insufficient hours is insecurity even while employed.
Job vacancies → Employment security	0.090	pts per %	0–9 months, peaking around month 3	Low	Visible alternatives are what make a job feel replaceable rather than precarious.

Future confidence`wellbeing.future`v0.4.0

Expectations about future living standards.

Low

Method: Composite proxy

Calibrated over: 2019–2025

Inputs: realWageGrowth, employmentSecurity, housingSecurity, firstHomeBuyerAccess

Outputs: futureConfidence

Limitations

· A construct. Highly sensitive to factors outside the economy.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Real wage growth → Future confidence	3.000	pts per pp	0–18 months, peaking around month 6	Low	Whether living standards are improving is the main input into whether people expect them to keep improving.
Employment security → Future confidence	0.350	pts per pts	0–12 months, peaking around month 3	Low	Confidence about the future requires confidence about next month's income.
Housing security → Future confidence	0.280	pts per pts	0–18 months, peaking around month 6	Low	Housing is the largest single component of most households' plans.
First home buyer access → Future confidence	0.150	pts per pts	0–24 months, peaking around month 6	Low	For younger households, whether ownership looks reachable is a large part of how the future feels.

Household Economic Flexibility`wellbeing.flexibility`v0.5.0

Deliberately material: discretionary income, savings capacity, debt burden, housing security, employment mobility and the ability to relocate. Named to avoid the political freight of the word 'freedom'.

Low

Method: Composite of measurable capacities

Calibrated over: 2019–2025

Inputs: discretionaryIncome, savingRatio, householdInterestBurden, housingSecurity, rentalVacancy

Outputs: economicFlexibility

Limitations

· Measures material capacity only. It makes no claim about autonomy, opportunity or freedom in any broader sense.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Discretionary income → Household Economic Flexibility	0.420	pts per %	0–9 months, peaking around month 3	Low	Money left after the necessities is the most direct measure of room to move.
Household saving ratio → Household Economic Flexibility	0.900	pts per pp	0–12 months, peaking around month 3	Low	The ability to save is the ability to absorb a shock or change course.
Interest payments to income → Household Economic Flexibility	-1.800	pts per pp	0–9 months, peaking around month 3	Low	Committed debt servicing is income that cannot be redirected.
Housing security → Household Economic Flexibility	0.250	pts per pts	0–18 months, peaking around month 6	Low	Insecure housing consumes attention and forecloses options.
Employment security → Household Economic Flexibility	0.200	pts per pts	0–18 months, peaking around month 6	Low	Being able to leave a job is a large part of economic autonomy.
Rental vacancy rate → Household Economic Flexibility	1.100	pts per pp	0–18 months, peaking around month 6	Low	The ability to relocate — for work, family or cost — depends on there being somewhere to move to.

Prosperity Index`prosperity.index`v1.0.0

Nine components of broad-based material living standards, combined with editable weights. Per capita rather than aggregate, real rather than nominal, distribution-aware, and carrying a drag for public debt. The index is optimised against when the user asks for that, which is why every part of its construction is exposed.

Low

Method: Explicit weighted composite, zero-lag aggregation

Calibrated over: 2019-2025

Inputs: realDisposableIncome, gdpPerCapita, unemployment, housingAffordability, householdNetWorth, gini, productivityGrowth, netDebt

Outputs: prosperityIndex

Limitations

· The weights are a value judgement, not a finding. Change them and the ranking of policies changes with them.
· The component baselines are stated positions on a 0-100 scale, not measurements. They set the level of the index and have no effect on any movement the engine reports.
· Linear and additive. It cannot represent thresholds, and it credits a large gain to a few the same as a small gain to many at the same total - which is why breadth is reported separately beside it.
· It carries no price component of its own. Prices enter through real household income, which is already deflated by them; a separate purchasing-power term would count disinflation twice.
· It is a measure of material living standards only. It says nothing about health, relationships, purpose, environment or security, and it is not a measure of happiness.
· Optimising against it optimises against this specific definition of prosperity. A policy that raises the index is not thereby a good policy.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Real disposable income → Prosperity Index	0.800	pts per %	immediate	High	Real household income carries the largest weight: it is what households actually have to spend, and it is the best-measured input in the index. Prices reach the index through this term and no other.
Real GDP per capita → Prosperity Index	0.500	pts per %	immediate	Medium	Output per person rather than output. Population growth that raises GDP without raising GDP per capita is not prosperity, and an index built on headline GDP would score it as though it were.
Unemployment rate → Prosperity Index	-1.000	pts per pp	immediate	High	Access to paid work. Losing a job is the sharpest single determinant of a household's material position, which is why 1.5 percentage points of unemployment is treated as a large move.
Price to income ratio → Prosperity Index	-0.120	pts per %	immediate	Medium	Dwelling prices against income, from the position of people who do not already own. The wealth side of the same price move is carried by the net worth term, so a correction is never scored as a pure gain.
Household net worth → Prosperity Index	0.200	pts per %	immediate	Medium	The other side of every asset-price movement. Without this term a housing correction would enter the index as an unambiguous improvement, which is how a composite flatters a policy by looking away from who paid for it.
Income inequality (Gini) → Prosperity Index	-100.000	pts per unit	immediate	Low	Whether the gains were shared. This is what separates prosperity from the average having gone up. The coefficient is large only because Gini moves on a 0-1 scale.
Productivity growth → Prosperity Index	1.600	pts per pp	immediate	Low	Whether future prosperity is being built or consumed. The least well-identified input in the index.
Net debt → Prosperity Index	-0.030	pts per %	immediate	High	Living standards funded by borrowing are borrowed from later. A deliberate drag rather than a veto, and it cannot distinguish debt-financed investment from debt-financed consumption.

Modelled Wellbeing Index`wellbeing.index`v0.5.0

Nine dimensions combined with editable weights. The weights are a value judgement, which is why they are exposed rather than embedded.

Low

Method: Explicit weighted composite

Calibrated over: 2019–2025

Inputs: financialStress, realDisposableIncome, employmentSecurity, housingSecurity, economicFlexibility, futureConfidence, healthAccess

Outputs: wellbeingIndex

Limitations

· This is not a measure of happiness and must not be presented as one.
· It captures material and security dimensions only. Relationships, purpose, health status and community are absent.
· The default weights are defensible, not correct. Change them and the ranking of policies can change.

Relationship	Coefficient	Units	Lag	Confidence	Explanation
Financial stress index → Modelled Wellbeing Index	-0.200	pts per pts	0–12 months, peaking around month 3	Low	Financial security carries the largest default weight because it has the strongest and best-documented association with self-reported life satisfaction.
Real disposable income → Modelled Wellbeing Index	0.192	pts per %	0–12 months, peaking around month 3	Low	Real material living standards, with diminishing returns that this linear form does not capture.
Employment security → Modelled Wellbeing Index	0.140	pts per pts	0–12 months, peaking around month 3	Low	Employment security.
Housing security → Modelled Wellbeing Index	0.130	pts per pts	0–12 months, peaking around month 3	Low	Housing security.
Household Economic Flexibility → Modelled Wellbeing Index	0.110	pts per pts	0–12 months, peaking around month 3	Low	Room to move — discretionary spending, savings capacity and mobility.
Future confidence → Modelled Wellbeing Index	0.060	pts per pts	0–12 months, peaking around month 3	Low	Expectations about the future.
Healthcare access → Modelled Wellbeing Index	0.100	pts per pts	0–24 months, peaking around month 6	Low	Access to healthcare.
Infrastructure pressure → Modelled Wellbeing Index	-0.050	pts per pts	0–24 months, peaking around month 6	Low	Time lost to congestion and queues.
Social cohesion → Modelled Wellbeing Index	0.050	pts per pts	0–36 months, peaking around month 12	Experimental	Community stability. The smallest default weight, because it is the least reliable input.

Model explorer

Assumptions

Mortgage rate pass-through

Deposit rate pass-through

Borrowing capacity into prices

Housing supply elasticity

Policy reaction strength

Grant capitalisation into prices

Variable-rate share of mortgages

Housing stress threshold

Labour absorption horizon

Landlord cost pass-through to rents

Registered models

Monetary transmissionmonetary.transmissionv1.0.0

Limitations

Unconventional policymonetary.unconventionalv0.4.0

Limitations

Exchange ratemonetary.externalv0.5.0

Limitations

Asset price responsemonetary.assetsv0.4.0

Limitations

Policy reaction functionmonetary.reactionv1.0.0

Limitations

Borrowing capacitycredit.serviceabilityv1.0.0

Limitations

Credit availabilitycredit.supplyv0.3.0

Limitations

Housing creditcredit.housingv0.8.0

Limitations

Mortgage repaymentshousehold.mortgagev1.0.0

Limitations

Interest incomehousehold.savingsv1.0.0

Limitations

Household incomehousehold.incomev1.0.0

Limitations

Discretionary incomehousehold.discretionaryv1.0.0

Limitations

Consumptionhousehold.consumptionv1.0.0

Limitations

Wealth effectshousehold.wealthv0.7.0

Limitations

Saving behaviourhousehold.savingv0.7.0

Limitations

Consumer sentimenthousehold.sentimentv0.5.0

Limitations

Expenditure accountsmacro.expenditurev1.0.0

Limitations

Output gap and capacitymacro.capacityv0.6.0

Limitations

Per-capita outputmacro.percapitav1.0.0

Limitations

Supply sidemacro.supplyv0.5.0

Limitations

Productivitymacro.productivityv0.2.0

Limitations

Labour supplylabour.supplyv1.0.0

Limitations

Labour demandlabour.demandv1.0.0

Limitations

Unemployment identitylabour.identityv1.0.0

Limitations

Labour absorptionlabour.absorptionv0.5.0

Limitations

Participationlabour.participationv0.6.0

Limitations

Wage determinationlabour.wagesv1.0.0

Limitations

Employment taxeslabour.taxesv0.4.0

Limitations

Sectoral employmentlabour.sectorv0.5.0

Limitations

Price Phillips curveprices.phillipsv1.0.0

Limitations

Inflation expectationsprices.expectationsv0.6.0

Limitations

Consumer price levelprices.levelv1.0.0

Limitations

Cost pass-throughprices.costsv0.8.0

Limitations

Imported inflationprices.externalv0.7.0

Monetary transmission`monetary.transmission`v1.0.0

Unconventional policy`monetary.unconventional`v0.4.0

Exchange rate`monetary.external`v0.5.0

Asset price response`monetary.assets`v0.4.0

Policy reaction function`monetary.reaction`v1.0.0

Borrowing capacity`credit.serviceability`v1.0.0

Credit availability`credit.supply`v0.3.0

Housing credit`credit.housing`v0.8.0

Mortgage repayments`household.mortgage`v1.0.0

Interest income`household.savings`v1.0.0

Household income`household.income`v1.0.0

Discretionary income`household.discretionary`v1.0.0

Consumption`household.consumption`v1.0.0

Wealth effects`household.wealth`v0.7.0

Saving behaviour`household.saving`v0.7.0

Consumer sentiment`household.sentiment`v0.5.0

Expenditure accounts`macro.expenditure`v1.0.0

Output gap and capacity`macro.capacity`v0.6.0

Per-capita output`macro.percapita`v1.0.0

Supply side`macro.supply`v0.5.0

Productivity`macro.productivity`v0.2.0

Labour supply`labour.supply`v1.0.0

Labour demand`labour.demand`v1.0.0

Unemployment identity`labour.identity`v1.0.0

Labour absorption`labour.absorption`v0.5.0

Participation`labour.participation`v0.6.0

Wage determination`labour.wages`v1.0.0

Employment taxes`labour.taxes`v0.4.0

Sectoral employment`labour.sector`v0.5.0

Price Phillips curve`prices.phillips`v1.0.0

Inflation expectations`prices.expectations`v0.6.0

Consumer price level`prices.level`v1.0.0

Cost pass-through`prices.costs`v0.8.0

Imported inflation`prices.external`v0.7.0

Indirect taxes`prices.taxes`v1.0.0

Carbon pricing`energy.carbon`v0.6.0

Energy bill relief`energy.subsidy`v1.0.0

Fuel prices`energy.fuel`v1.0.0

Generation mix`energy.supply`v0.3.0

Emissions`energy.abatement`v0.4.0

House prices`housing.prices`v1.0.0

Rents`housing.rental`v1.0.0

Stock–flow balance`housing.balance`v1.0.0

Housing demand`housing.demand`v1.0.0

Housing supply`housing.supply`v1.0.0

Planning system`housing.planning`v0.3.0

Construction pipeline`housing.pipeline`v1.0.0

Dwelling stock`housing.stock`v1.0.0

Investor behaviour`housing.investors`v0.4.0

Property taxes`housing.taxes`v0.4.0

Demand-side assistance`housing.demandside`v0.6.0

Public housing`housing.public`v0.6.0

Construction costs`housing.costs`v0.8.0

Construction employment`housing.employment`v0.8.0

Affordability`housing.affordability`v1.0.0

First home buyer access`housing.entry`v0.4.0

Business investment`business.investment`v0.8.0

Business incentives`business.incentives`v0.2.0

Business confidence`business.sentiment`v0.4.0

Retail`business.retail`v0.9.0

Business distress`business.distress`v0.3.0

Trade`trade.flows`v0.7.0

Public demand`fiscal.demand`v1.0.0

Revenue`fiscal.receipts`v1.0.0

Payments`fiscal.payments`v1.0.0

Automatic stabilisers`fiscal.stabilisers`v1.0.0

Budget balance`fiscal.balance`v1.0.0

Debt dynamics`fiscal.debt`v1.0.0

Debt financing`fiscal.financing`v0.4.0