Policy decisions are active decisions the government have made and parameter variations are things that happen. For example, Treasury might forecast a massive increase in future commodity prices. It seems that is exactly what they have done – they have manufactured a massive increase in the budget by imagining future prices to be high.
So look at the projections for 2012-13. A net $310 million comes out due to policy change and a massive $2.4 billion goes in due to parameter variations. Now look at 2013-14. $5.3 billion comes out due to policy (the RSPT) and $4.7 billion goes in (MRRT) on the assumption of high prices. The government and Treasury have assumed their surplus.
We see the effect of substituting the MRRT for the RSPT without the parameter variation estimates by looking at Table B1 on page 24.
The $7.5 billion that comes out of the Treasury over two years is the substitution. The RSPT was forecast to raise $12 billion over those same two years. Before the parameter variation changes the MRRT is expected to raise $4.5 billion over two years. (That’s assuming it works as Treasury expect). The difference between the $10.5 billion that the government promised two weeks ago and the $4.5 billion we now derive from the Economic Statement is an assumption about future commodity prices.