What is the TAWA model?
Tax and Welfare Analysis (TAWA) is the Treasury’s microsimulation model of the New Zealand personal tax and transfer system. It applies potential policy changes to individuals in its input data, and then scales up and aggregates the results so that they are representative of the New Zealand population. It is used extensively within Treasury and in external work related to tax and welfare policy analysis.
The TAWA methodology report provides a detailed overview of the TAWA model. The following figure shows an overview of the TAWA modelling process:
Overview of tax and welfare (TAWA) modelling process
How has it been used?
TAWA has made significant contributions to child poverty reports (New Zealand Treasury, 2023), targets, and research (Stephens, 2022), and has provided advice on welfare reform, including changes to Working for Families and child support pass-on. It has also been used to understand the distribution of wealth (Symes, 2022) and expenditure (Wang, 2022), model the distributional impacts of the emissions trading scheme (Davis, Hart, and Stubbing, 2024), model Social Unemployment Insurance, investigate income adequacy of NZ Super for housing costs, and analyse fiscal incidence in New Zealand (Wright and Nguyen, 2024).
Who can use this model?
TAWA is available to trusted Stats NZ researchers via the Integrated Data Infrastructure (IDI). Please contact the Treasury if you are interested in using the model in your work.