5271.0.55.002 - Information Paper: Cultural and Creative Activity Satellite Accounts, Australia, 2013  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 09/12/2013  First Issue
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OUTLINE OF ABS PROPOSALS

CONTEXT

Satellite accounts for cultural and creative activity are a relatively recent initiative on the international stage. International standards have not yet been established for these types of accounts and a variety of approaches have been taken in their absence. The specific proposals in the ABS’ Discussion Paper: Cultural and Creative Activity Satellite Accounts (cat. no. 5271.0.55.001) were developed after consulting:

  • government and academic stakeholders in Australia for whom the satellite accounts must be meaningful;
  • cultural statistics frameworks published by the United Nations Educational, Scientific and Cultural Organization (UNESCO)1 and the European Commission2;
  • cultural and creative satellite accounts and similar works published by government agencies of other nations (e.g. Canada3, Finland4, the United Kingdom5 and Spain6); and
  • the academic literature underpinning much of the international work in this field.


CULTURAL AND CREATIVE DOMAINS

Figure 1 below shows the domains (groups of activities) which the discussion paper proposed to treat as ‘cultural’ or ‘creative’ for the purposes of the satellite accounts. This figure is based on the concentric circles model used by Throsby7. At the centre are the domains considered to produce the highest degree of cultural and creative content in their output relative to the output’s commercial value.

Figure 1: Cultural and creative domains

Figure 1: shows cultural and creative domains


COMPONENTS OF CULTURAL AND CREATIVE ACTIVITY

For all of the domains, the satellite accounts would measure cultural and creative activity in four components, as shown in figure 2.

Figure 2: Proposed boundary for cultural and creative activity satellite accounts

Figure 2: shows the four components of cultural and creative activity

Component 1 has been the focus of satellite accounts for other nations. Some of these accounts have aspired to include components 2 and 3 but were not able because of data or methodological difficulties. Components 3 and 4 are included in the ABS’ Non-Profit Institutions Satellite Account (cat. no. 5256.0) and are an extension beyond the national accounts production boundary to provide a more complete picture of the value of this activity to society.


CULTURAL AND CREATIVE INDUSTRY SUPPLY CHAINS (COMPONENT 1)

The industry supply chains component would encompass the activity of industries which generate cultural and creative ideas, use those ideas to produce or manufacture cultural and creative goods and services, or distribute cultural and creative goods and services to final consumers. Other industries with a significant direct supporting role would also be measured (e.g. education and training that develops performance artists).

Figure 3: Concept of an industry supply chain for cultural and creative domains

Figure 3: shows the concept of an industry supply chain for cultural and creative domains

Appendix 1 identifies the industry classes proposed to be in-scope of the industry supply chains. Activity in these industries would be estimated using a top-down approach from the aggregates published in the ABS’ input output tables8. Industry categories within the input-output tables that are not granular enough would be split to smaller industry levels primarily using data on the value of Australian production by product. This data is contained in product details tables published as part of the input-output product suite9. The product details tables have 1,284 product categories which can be mapped to the industry classes in which they are produced.

Some of the in-scope industry classes perform significant amounts of activity that are not considered to be cultural or creative in nature and do not directly support cultural or creative activities. To prevent the satellite accounts from being overstated, these industry classes would be excluded from the coverage of the accounts unless their out-of-scope activities can be removed through an apportioning process. The various methods of apportioning this activity would need to be trialled before use.


CULTURAL AND CREATIVE OCCUPATIONS IN OTHER INDUSTRIES (COMPONENT 2)

Cultural and creative activity is also carried out by people employed in industries outside the supply chains. An example is someone employed in the insurance industry to develop advertising content – the work activity they perform is cultural and creative in nature, even if the industry is not. A variety of academic studies such as Higgs and Cunningham10, and the UNESCO11 and European Commission12 frameworks, conceptualise this as an employment ‘trident’ as shown in figure 4.

Figure 4: Cultural and creative employment ‘trident’

Figure 4: shows the cultural and creative employment 'trident'

It is the activity undertaken by embedded workers (including multiple job holders) that would be captured in the second component of the satellite accounts. The activity of specialist and support workers would be captured in the satellite accounts through the industry supply chains component.

The occupations identified in the discussion paper as cultural or creative are listed in appendix 2. Activity performed in these occupations outside of the cultural and creative industry supply chains would be valued as a share of the Compensation of Employees (COE) aggregates in the ABS’ input-output tables. COE is the total remuneration payable by enterprises to employees, in cash or in kind, comprised of wages and salaries, and employers’ social contributions (the latter includes contributions towards retirement benefits such as superannuation).

The COE shares would be calculated starting with employment data from input-output tables, Labour Force, Australia, Detailed, Quarterly (6291.0.55.003), and the Census workforce occupation structure. This data would be combined with average earnings data from the ABS’ Survey of Employee Earnings and Hours (SEEH)13 to estimate employee remuneration in main jobs by occupation and industry. Employee remuneration in secondary jobs would be estimated using data from the ABS’ 2007 Survey of Employment Arrangements, Retirement and Superannuation14, adjusted over time for wage inflation using the ABS’ Wage Price Index, Australia (cat. no. 6345.0).


VOLUNTEER SERVICES TO CULTURAL AND CREATIVE INSTITUTIONS (COMPONENT 3)

Volunteers are people who willingly give unpaid help to an organisation or group. This type of activity is prevalent in cultural and creative domains where people, for example, give their time unpaid as art gallery guides, as members of museum management boards, or to collect donations from the public.

The discussion paper proposed that volunteer services in the satellite accounts would be measured using the ‘replacement cost’ method, whereby each hour of a volunteer’s time is valued at what it would cost to replace with paid labour. This method is also used by the ABS’ Non-Profit Institutions Satellite Account15, based on the United Nations’ Handbook on Non-profit Institutions in the System of National Accounts16.

Data on the number of hours volunteered with ‘arts/heritage’ organisations would be sourced from the ABS’ General Social Survey17, adjusted in-between survey years for changes in the Australian population. The number of hours volunteered would then be multiplied by replacement wage rate assumptions based on SEEH data. The replacement wage rate assumptions would vary with the work activities the volunteers performed and the occupation categories to which these activities match.


NON-MARKET OUTPUT OF MARKET PRODUCERS (COMPONENT 4)

Non-market output is a term used in the national accounts to describe goods and services supplied for free or at prices that are not economically significant. This output is excluded from the national accounts for institutions that offer the majority of their production at economically significant prices (these institutions are known as ‘market producers’). Non-market output of market producers is, however, included in the ABS’ Non-Profit Institutions Satellite Account based on the United Nations’ Handbook. The Handbook argues that if an adjustment is not made to value any non-market output produced by market units which are non-profit institutions, then the value of the output of these units is understated, as such units can produce significant amounts of output which are supported by charitable contributions and other transfers that is not evident in sales revenue.

The fourth component of the satellite accounts would measure the value of this production by market non-profit institutions in the cultural and creative industries. Other types of production by these institutions are captured within the industry supply chains component of the satellite accounts.

The estimate of this component would be compiled using Business Activity Statement data collected by the Australian Taxation Office and would be calculated consistently with the ABS’ Non Profit Institutions Satellite Account. It would be valued as the difference between output calculated by cost summation (the standard national accounts valuation method for non-market units), and output calculated by sales (the standard national accounts method for market units)18. This is represented in figure 5 below.

Figure 5: Valuation of market and non-market output

Figure 5: shows the valuation of market and non-market output



DATA OUTPUTS AND FREQUENCY

The key data outputs in the satellite accounts would be the monetary measures of gross domestic product, gross value added, output, volunteer services and non-market output. These would be complemented with physical measures of employment and active trading entities (businesses and non-profit institutions) in the cultural and creative industries19. A supply-use table describing linkages between cultural and creative industries and the rest of the economy would also be constructed.

These data outputs could currently be developed for Australia using the existing data collections of the ABS. State and territory splits of the Australian estimates could also potentially be developed using a breakdown of the ABS’ source data or other indicators, however, this would need to be assessed further once Australian accounts are developed.

The range of information included in the satellite accounts could potentially be expanded if investment funds were available in the future. Details about the incomes, expenses, assets and liabilities of entities in the cultural and creative industries might be compiled using Business Income Tax data, or through the ABS’ Economic Activity Survey20 by boosting the sample size and/or adding questions to the survey form if needed. Data collected in the ABS’ Research and Development (R&D)21 surveys could also be used to compile R&D expenditure estimates for the aggregations of industry classes in the cultural and creative industry supply chains.

Since some stakeholders are primarily interested in ‘cultural’ activity, while others focus on ‘creative’, the discussion paper proposed that satellite accounts be constructed individually for the two segments, as well as producing an aggregate account covering both that takes into account the overlap between the two. Each of the three accounts would contain details by domain or industry to the extent possible.

The stakeholders consulted during the feasibility study suggested they require satellite accounts a minimum of every three years, for the most recent financial year that can be produced using available data.


INVESTMENT PRIORITIES

The feasibility study concluded the satellite accounts can be constructed for Australia to a reasonable level of quality using currently available data. The discussion paper therefore proposed the top investment priorities should be to:
  • Develop the first ‘experimental’ satellite accounts for Australia and the information technology infrastructure needed to produce them efficiently.
  • Develop state and territory splits of the Australian aggregates if this is feasible.
  • Establish ongoing production of the satellite accounts, provided the required input data continues to be available.

The priorities after the accounts are ‘up and running’ would be to expand the range of data outputs and improve or maintain the quality of the input data:
  • The coverage of the industry supply chains component could be improved by trialling methods to apportion activity in industry classes which contain significant out-of-scope activity.
  • Details of the R&D expenditure of cultural and creative industries could be compiled from ABS R&D surveys.
  • Details of the income, expenses, assets and liabilities for cultural and creative industries might be produced from Business Income Tax data, or by boosting the samples on the ABS’ Economic Activity Surveys and/or adding questions to the survey form if required.
  • The multiple jobholding data used by the accounts might be updated with Personal Income Tax and Pay As You Go data, or by adding questions to the ABS’ Characteristics of Employment Labour Force Supplement Survey.

The priority order is based on the ABS’ assessment of the benefits each action would generate relative to the costs to stakeholders of investing in this work.



1 United Nations Educational Scientific and Cultural Organization (UNESCO) (2009), 2009 UNESCO Framework for Cultural Statistics, <http://www.uis.unesco.org/culture/Documents/framework-cultural-statistics-culture-2009-en.pdf>.
2 European Commission (2012), ESSnet-Culture: European Statistical System Network on Culture – Final Report, <http://ec.europa.eu/culture/our-policy-development/documents/ess-net-report-oct2012.pdf>.
3 Statistics Canada (2004), Economic Contribution of Culture in Canada, <http://www.statcan.gc.ca/pub/81-595-m/81-595-m2004023-eng.pdf>.
4 Ministry of Education (2009), Culture Satellite Account: Final report of pilot project, <http://www.minedu.fi/export/sites/default/OPM/Julkaisut/2009/liitteet/opm13.pdf?lang=fi>.
5 Department for Culture, Media and Sport (2011), Creative Industries Economic Estimates: Full Statistical Release, <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/77959/Creative-Industries-Economic-Estimates-Report-2011-update.pdf>.
6 Ministry of Culture (2011), Satellite Account on Culture in Spain: Advance of 2000-2009 results, <http://www.mcu.es/estadisticas/docs/CSCE/advance_results_csce-2011.pdf>.
7 D. Throsby (2001), The Economics of Cultural Policy, Cambridge University Press, p26.
8 Australian National Accounts: Input-Output Tables (cat. no. 5209.0.55.001).
9 Australian National Accounts: Input-Output Tables (Product Details) (cat. no. 5215.0.55.001).
10 P. Higgs and S. Cunningham (2008), ‘Creative Industries Mapping: Where have we come from and where are we going?’, Creative Industries Journal, vol.1, no.1, p7-30, <http://portal2.ntua.edu.tw/~dc/files/F04_3.pdf>.
11 UNESCO (2009), p40.
12 European Commission (2012), p148.
13 Published in Employee Earnings and Hours, Australia (cat. no. 6306.0).
14 Published in Employment Arrangements, Retirement and Superannuation, Australia (cat. no. 6361.0).
15 Australian National Accounts: Non-Profit Institutions Satellite Account (cat. no. 5256.0), p35-36.
16 United Nations (2003), Handbook on Non-Profit Institutions in the System of National Accounts, <http://unstats.un.org/unsd/publication/seriesf/seriesf_91e.pdf>.
17 Published in General Social Survey: Summary Results, Australia (cat. no. 4159.0) and Voluntary Work, Australia (cat. no. 4441.0).
18 Australian National Accounts: Non-Profit Institutions Satellite Account (cat. no. 5256.0), p35.
19 Entity counts would be produced from the ABS’ Business Register using a consistent method to Counts of Australian Businesses, including Entries and Exits (cat. no. 8165.0).
20 Published in Australian Industry (cat. no. 8155.0).
21 Published in Research and Experimental Development, All Sector Summary, Australia (cat. no. 8112.0); Research and Experimental Development, Businesses, Australia (cat. no. 8104.0); Research and Experimental Development, Higher Education Organisations, Australia (cat. no. 8111.0); and Research and Experimental Development, Government and Private Non-Profit Organisations, Australia (8109.0).