// program: budget.do
// project: fiscal balance and economic growth
// author: mathias sinning (mathias.sinning@anu.edu.au)
// date: 5may2016
clear
set obs 20
* year
g year=2000 in 1 
replace year=2001 in 2
replace year=2002 in 3
replace year=2003 in 4
replace year=2004 in 5
replace year=2005 in 6
replace year=2006 in 7
replace year=2007 in 8
replace year=2008 in 9
replace year=2009 in 10
replace year=2010 in 11
replace year=2011 in 12
replace year=2012 in 13
replace year=2013 in 14
replace year=2014 in 15
replace year=2015 in 16
replace year=2016 in 17
replace year=2017 in 18
replace year=2018 in 19
replace year=2019 in 20
* fiscal balance (Source: Final Budget Outcomes; Budget 2016-17)
g fb=5.9 in 1
replace fb=-3.7 in 2
replace fb=6.0 in 3
replace fb=5.6 in 4
replace fb=10.8 in 5
replace fb=14.8 in 6
replace fb=15.4 in 7
replace fb=21.0 in 8
replace fb=-29.7 in 9
replace fb=-52.9 in 10
replace fb=-51.5 in 11
replace fb=-44.5 in 12
replace fb=-23.5 in 13
replace fb=-43.7 in 14
replace fb=-39.9 in 15
replace fb=-39.4 in 16
replace fb=-37.1 in 17
replace fb=-18.7 in 18
replace fb=-9.8 in 19
replace fb=-2.1 in 20
* Revenue (Source: Final Budget Outcomes; Budget 2016-17)
g revenue=161.5 in 1
replace revenue=162.4 in 2
replace revenue=175.0 in 3
replace revenue=187.6 in 4
replace revenue=206.2 in 5
replace revenue=221.9 in 6
replace revenue=237.0 in 7
replace revenue=303.7 in 8
replace revenue=298.9 in 9
replace revenue=292.8 in 10
replace revenue=309.9 in 11
replace revenue=338.1 in 12
replace revenue=360.2 in 13
replace revenue=373.9 in 14
replace revenue=380.7 in 15
replace revenue=396.4 in 16
replace revenue=416.9 in 17
replace revenue=449.5 in 18
replace revenue=484.4 in 19
replace revenue=515.1 in 20
* GDP (Source: ABS: 5206.0 Australian National Accounts: National Income, Expenditure and Product; Budget 2016-17)
g GDP=1053599 in 1 
replace GDP=1073927 in 2
replace GDP=1115345 in 3
replace GDP=1149595 in 4
replace GDP=1197296 in 5
replace GDP=1235689 in 6
replace GDP=1272548 in 7
replace GDP=1320366 in 8
replace GDP=1369308 in 9
replace GDP=1394225 in 10
replace GDP=1422363 in 11
replace GDP=1456209 in 12
replace GDP=1509109 in 13
replace GDP=1545932 in 14
replace GDP=1584578 in 15
replace GDP=1620073 in 16
replace GDP=GDP[_n-1]*1.025 in 17
replace GDP=GDP[_n-1]*1.025 in 18
replace GDP=GDP[_n-1]*1.03 in 19
replace GDP=GDP[_n-1]*1.03 in 20
replace GDP=GDP/1000  // in $billions
* GDP growth (Source: ABS: 5206.0 Australian National Accounts: National Income, Expenditure and Product; Budget 2016-17)
g GDP_growth=1.9 in 1
replace GDP_growth=3.9 in 2
replace GDP_growth=3.1 in 3
replace GDP_growth=4.1 in 4
replace GDP_growth=3.2 in 5
replace GDP_growth=3.0 in 6
replace GDP_growth=3.8 in 7
replace GDP_growth=3.7 in 8
replace GDP_growth=1.8 in 9
replace GDP_growth=2.0 in 10
replace GDP_growth=2.4 in 11
replace GDP_growth=3.6 in 12
replace GDP_growth=2.4 in 13
replace GDP_growth=2.5 in 14
replace GDP_growth=2.2 in 15
replace GDP_growth=2.5 in 16
replace GDP_growth=2.5 in 17
replace GDP_growth=3 in 18
replace GDP_growth=3 in 19
replace GDP_growth=3 in 20
* Revenue and (forecasted) GDP, 2000-01 to 2019-20
reg revenue GDP if year<=2015
predict yhat
scatter revenue GDP if year<=2015 || lfit revenue GDP if year<=2015, ytitle("Revenue (billion dollars)") ///
	xtitle("GDP (billion dollars)") title("Revenue and GDP, 2000-2015") legend(off)
graph save Graph "figure1.gph", replace
graph export "figure1.pdf", replace	
line revenue year if year<=2015 || line yhat year if year<=2015, title("Actual and predicted revenue") ///
	ytitle("Revenue (billion dollars)") xtitle("Year") legend(label(1 "Revenue")) ///
	xlabel(2000 "2000-01" 2005 "2005-06" 2010 "2010-11" 2015 "2015-16")
graph save Graph "figure2.gph", replace
graph export "figure2.pdf", replace
* alternative scenario: 2.5% GDP growth
g GDP2=1053599 in 1 // 5206.0 Australian National Accounts: National Income, Expenditure and Product
replace GDP2=1073927 in 2
replace GDP2=1115345 in 3
replace GDP2=1149595 in 4
replace GDP2=1197296 in 5
replace GDP2=1235689 in 6
replace GDP2=1272548 in 7
replace GDP2=1320366 in 8
replace GDP2=1369308 in 9
replace GDP2=1394225 in 10
replace GDP2=1422363 in 11
replace GDP2=1456209 in 12
replace GDP2=1509109 in 13
replace GDP2=1545932 in 14
replace GDP2=1584578 in 15
replace GDP2=1620073 in 16
replace GDP2=GDP2[_n-1]*1.025 in 17
replace GDP2=GDP2[_n-1]*1.025 in 18
replace GDP2=GDP2[_n-1]*1.025 in 19
replace GDP2=GDP2[_n-1]*1.025 in 20
replace GDP2=GDP2/1000  // in $billions
g revenue2=revenue if year<2017
reg revenue2 GDP2
predict yhat2
replace revenue2=yhat2 if revenue2==.
drop yhat2
* alternative scenario: 2.0% GDP growth
g GDP3=1053599 in 1 // 5206.0 Australian National Accounts: National Income, Expenditure and Product
replace GDP3=1073927 in 2
replace GDP3=1115345 in 3
replace GDP3=1149595 in 4
replace GDP3=1197296 in 5
replace GDP3=1235689 in 6
replace GDP3=1272548 in 7
replace GDP3=1320366 in 8
replace GDP3=1369308 in 9
replace GDP3=1394225 in 10
replace GDP3=1422363 in 11
replace GDP3=1456209 in 12
replace GDP3=1509109 in 13
replace GDP3=1545932 in 14
replace GDP3=1584578 in 15
replace GDP3=1620073 in 16
replace GDP3=GDP3[_n-1]*1.02 in 17
replace GDP3=GDP3[_n-1]*1.02 in 18
replace GDP3=GDP3[_n-1]*1.02 in 19
replace GDP3=GDP3[_n-1]*1.02 in 20
replace GDP3=GDP3/1000  // in $billions
g revenue3=revenue if year<2017
reg revenue3 GDP3
predict yhat3
replace revenue3=yhat3 if revenue3==.
drop yhat3
* alternative scenario: 1.5% GDP growth
g GDP4=1053599 in 1 // 5206.0 Australian National Accounts: National Income, Expenditure and Product
replace GDP4=1073927 in 2
replace GDP4=1115345 in 3
replace GDP4=1149595 in 4
replace GDP4=1197296 in 5
replace GDP4=1235689 in 6
replace GDP4=1272548 in 7
replace GDP4=1320366 in 8
replace GDP4=1369308 in 9
replace GDP4=1394225 in 10
replace GDP4=1422363 in 11
replace GDP4=1456209 in 12
replace GDP4=1509109 in 13
replace GDP4=1545932 in 14
replace GDP4=1584578 in 15
replace GDP4=1620073 in 16
replace GDP4=GDP4[_n-1]*1.015 in 17
replace GDP4=GDP4[_n-1]*1.015 in 18
replace GDP4=GDP4[_n-1]*1.015 in 19
replace GDP4=GDP4[_n-1]*1.015 in 20
replace GDP4=GDP4/1000  // in $billions
g revenue4=revenue if year<2017
reg revenue4 GDP4
predict yhat4
replace revenue4=yhat4 if revenue4==.
drop yhat4
* Effects on revenue
replace yhat=revenue if year<2017
label var revenue "Budget 2015-16"
label var yhat "Scenario 1: Budget 2015-16 growth assumptions"
label var revenue2 "Scenario 2: 2.5% growth"
label var revenue3 "Scenario 3: 2.0% growth"
label var revenue4 "Scenario 4: 1.5% growth"
line revenue year || line yhat year || line revenue2 year || line revenue3 year || ///
	line revenue4 year, legend(cols(1)) ytitle("Revenue (billion dollars)") ///
	xtitle("Year") title("The impact of alternative growth scenarios on revenue") ///
	xlabel(2000 "2000-01" 2005 "2005-06" 2010 "2010-11" 2015 "2015-16" 2019 "2019-20")
graph save Graph "figure3.gph", replace
graph export "figure3.pdf", replace	
list revenue revenue2 revenue3 revenue4 if year>2013
* Implications for fiscal balance
g fb1=fb-(revenue-yhat)
g fb2=fb-(revenue-revenue2)
g fb3=fb-(revenue-revenue3)
g fb4=fb-(revenue-revenue4)
list fb fb1 fb2 fb3 fb4 if year>2013
erase "figure1.gph"
erase "figure2.gph"
erase "figure3.gph"
label var year "Year" 
label var fb "Fiscal balance (billion dollars), source: Final Budget Outcomes; Budget 2015-16" 
label var revenue "Revenue (billion dollars), source: Final Budget Outcomes; Budget 2015-16" 
label var GDP "GDP (billion dollars), source: ABS: 5206.0 Australian National Accounts: National Income, Expenditure and Product" 
label var GDP_growth "GDP growth, source: ABS: 5206.0 Australian National Accounts: National Income, Expenditure and Product" 
label var yhat "Scenario 1: Predicted revenue based on Budget 2015-16 growth rate assumptions" 
label var GDP2 "GDP, Scenario 2: Predicted revenue, 2.5% GDP growth"
label var GDP3 "GDP, Scenario 3: Predicted revenue, 2.0% GDP growth"
label var GDP4 "GDP, Scenario 4: Predicted revenue, 1.5% GDP growth"
label var revenue2 "Revenue, Scenario 2: Predicted revenue, 2.5% GDP growth"
label var revenue3 "Revenue, Scenario 3: Predicted revenue, 2.0% GDP growth"
label var revenue4 "Revenue, Scenario 4: Predicted revenue, 1.5% GDP growth"
label var fb1 "Fiscal balance, Scenario 1"
label var fb2 "Fiscal balance, Scenario 2: 2.5% GDP growth"
label var fb3 "Fiscal balance, Scenario 3: 2.0% GDP growth"
label var fb4 "Fiscal balance, Scenario 4: 1.5% GDP growth"
export excel budget.xlsx, replace firstrow(variables)
exit