In October 2017, the Western Australian Department of Treasury commissioned Deloitte Access Economics to undertake a Review of Revenue Forecasting.
The review examined Treasury’s forecasts of iron ore royalties, payroll tax, transfer duty and land tax, as well as considered forecast performance, methods and approaches, tools and data sources, capabilities, resources, processes and governance.
The report compares the Department of Treasury’s forecast performance, methods and governance with a range of other forecasters, including, where relevant, other State Treasuries, the Commonwealth Treasury, the Commonwealth Department of Industry, and private sector organisations.
It is noted that forecasting revenue in Western Australia is more challenging than at the national level or in larger States because of Western Australia’s more volatile revenue base, which has increased following our very strong expansion in the State’s resource sector.
The Review has nonetheless suggested a number of changes to forecasting methods and processes, ranging from broader industry consultation to inform Treasury’s forecasts, conducting regular external reviews of Treasury’s forecasting performance and models, and incorporating additional information in models for specific taxes.
To view the report, which was undertaken between October 2017 and February 2018, and the Department of Treasury’s response to it, visit http://www.treasury.wa.gov.au