What if Australia’s Budget tax changes were modelled as code?

Part 2: Beyond CGT — what if Australia’s Budget tax reforms were modelled as code?

In Part 1 of this series, we looked at how the recent CGT reforms highlight the challenges of testing and explaining complex tax policy.

But CGT is only one example.

Every Australian Budget introduces reforms that are difficult to test, communicate and implement. Tax changes often involve multiple thresholds, exemptions, offsets and interactions across existing rules.

Yet governments still tend to rely on a familiar mix of legislation, spreadsheets, briefing papers and worked examples.

What if policy could be tested earlier and more directly?

Rules as Code and policy modelling tools such as OpenFisca point to a different approach.

Instead of waiting for legislation and system delivery, governments could model Budget reforms as executable rules throughout the policy lifecycle — from initial design and public consultation to Parliamentary reviews and policy rollout.

Policy modelling is already happening around the world

This is already happening around the world, using Rules as Code and OpenFisca. You can see how it’s being used right now from the links below:

View OpenFisca showcase (which includes LexImpact for policy modelling)

View PolicyEngine (US) simulations

View PolicyEngine (UK) simulations

PolicyEngine in the US also modelled the primary candidate’s policies during the 2024 US election, showing the power of Rules as Code and OpenFisca for policy lifecycle.

Salsa Digital has built the only policy modelling in Australia (that we know of!), a small prototype for modelling alcohol excise changes.

The benefits of Rules as Code and OpenFisca

Rules as Code and OpenFisca simulations can deliver the following benefits:

1. Better testing during policy design
2. Stronger scrutiny and clearer public understanding
3. Finding unintended consequences before implementation
4. Policy that’s implementation-ready

Better testing during policy design

Budget measures are often developed under tight timelines. That makes it difficult to fully test how reforms behave before they're announced.

Policy modelling using OpenFisca simulations can help teams compare:

• Current rules versus proposed rules
• Impacts across income brackets and household types
• Expected revenue outcomes
• Edge cases near thresholds or exemptions

That creates a chance to identify problems earlier.

For example:

• Does a threshold create an unintended cliff edge?
• Are two reforms interacting in unexpected ways?
• Is a concession helping groups outside the intended target?
• Do projected costings still hold under different scenarios?

Some of this work already happens. But it can be manual, fragmented or spread across multiple tools.

Digital twins for policy modelling make testing easier to repeat, review and refine.

Stronger scrutiny and clearer public understanding

Complex Budget reforms are difficult to explain through static documents alone.

Governments typically publish fact sheets and selected examples. Parliamentary review relies on explanatory material, hearings and simplified cost models. But modern tax policy rarely fits neatly into a handful of examples.

Different households, businesses and taxpayers can experience the same reform very differently. Policy modelling could support a broader range of users:

• Parliamentarians could interrogate reforms directly.
• Journalists and business groups could test policy claims.
• Citizens could explore a practical question that sits behind almost every Budget announcement: What does this mean for me?

Instead of relying only on worked examples, governments could provide transparent models that allow people to compare old and new rules across different scenarios. That wouldn’t eliminate disagreement, but it could make policy logic easier to inspect, explain and challenge.

Finding unintended consequences before implementation

Complex reforms often create outcomes that policymakers didn’t expect.

Tax systems are full of interactions between:

• Deductions
• Offsets
• Welfare settings
• Business structures
• Eligibility rules

Sometimes problems only become visible after implementation. By then, fixes can be politically difficult, operationally expensive or confusing for citizens.

Policy simulations create an opportunity to test for these issues earlier.

Governments could explore:

• Unusual edge cases
• Inequitable outcomes
• Unexpected interactions between reforms
• Groups affected in unintended ways

This matters for any major Budget measure, particularly when public trust is important. OpenFisca has been used globally for just this: to simulate policy changes and pivot policy changes before implementation.

Policy that’s already implementation-ready

One of the most practical benefits of policy modelling is often overlooked: Once legislation passes, agencies still need to translate legal rules into working systems.

That process can introduce delays, duplicated interpretation and delivery risk. But if policy logic has already been coded during design and review, governments already have a structured, digital representation of the rules.

These models can support:

• Implementation planning
• Digital service design
• Calculators and guidance tools
• Future policy analysis
• Later reforms

Instead of starting from scratch, agencies inherit reusable policy assets. Rules as Code can improve the connection between policy design and digital delivery.

Importantly, one rules engine can be integrated with multiple systems, from websites and chatbots to internal systems.

A broader opportunity for Budget reform

Governments around the world are already experimenting with translating policy into code during implementation. The real question is whether they can gain more value from that process earlier — during design, scrutiny and reform.

Rules as Code is not about replacing political judgement or legal drafting. It’s about giving governments better tools to test, explain and deliver increasingly complex policy.

As Budget reforms become more interconnected, those capabilities matter more.

Salsa Digital’s take

Complex Budget reforms need more than fact sheets, worked examples and late-stage implementation. Rules as Code enables governments to model, test and explain policy before it becomes law. It’s being used with great success in several different jurisdictions around the world.

At Salsa Digital, we work with governments to explore practical applications of Rules as Code, policy modelling and executable legislation to support better policy design, delivery and public understanding.

Find out more about Salsa’s Rules as Code services