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5220.0 - Australian National Accounts: State Accounts, 2004-05  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 09/11/2005   
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NOTES


ABOUT THIS PUBLICATION

This publication contains state and territory estimates of gross domestic product (referred to as gross state product (GSP)) and its components, in current price and chain volume terms, for the years 1996-97 to 2004-05. Historical data starting in 1989-90 are available electronically through the subscription service, Ausstats, or as individual spreadsheets on the ABS web site <www.abs.gov.au> (see Appendix 1 for a full list of available tables).



REVISIONS IN THIS ISSUE

The estimates in this issue incorporate new and revised estimates from the annual supply and use tables for 1994-95 to 2003-04 and updated data from other sources which normally become available by this time each year. To ensure continuity of time series, revisions to the supply use tables have been applied over the full length of the state accounts dataset. All states are affected by these revisions, which are more significant than normal because of the supply and use tables revisions. Please refer to the feature article presented in the annual Australian System of National Accounts, 2004-05 (cat. no. 5204.0) which provides details on the Australian level changes. This can be accessed on the National Accounts theme page available on the ABS web site <www.abs.gov.au>.



CHANGES IN THIS ISSUE

Changes have been made to some line items in the agricultural income table (table 43) to reflect the valuation concepts used in the supply and use tables.


Splits of machinery and equipment and non-dwelling construction have been introduced at the state level for the first time. Machinery and equipment has been split into 'new' and 'net purchases of second hand assets'. Non-dwellling construction has been split into 'new building', 'new engineering construction' and 'net purchases of second hand assets'. These new splits have been introduced in tables 5 to 22.



DATA VALUES AND ROUNDING

All values, unless otherwise indicated, are shown in Australian dollars rounded to the nearest million.


Where figures have been rounded, discrepancies may occur between the sums of the component items and totals.



NEXT ISSUE

The 2005-06 issue of this publication is expected to be released in November 2006.



INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Robert Reilly on Canberra (02) 6252 5892.



ANALYSIS OF RESULTS


GROWTH IN EXPERIMENTAL GSP VOLUME MEASURES

The volume measure of gross state product (GSP) in 2004-05 increased in all states. Tasmania and Queensland experienced the strongest growth (up 4.0%) followed by the Northern Territory (up 3.6%). New South Wales showed the weakest growth rate in 2004-05 of 1.1%. New South Wales was the only state to have a growth rate below the Australian GDP growth rate of 2.3%.

GSP, Chain volume measures - 2004-05

Annual growth
Average annual compound growth rates (1994-95 to 2004-05)
%
%

New South Wales
1.1
3.2
Victoria
2.3
3.8
Queensland
4.0
4.8
South Australia
2.6
3.1
Western Australia
2.7
4.1
Tasmania
4.0
2.1
Northern Territory
3.6
2.8
Australian Capital Territory
3.0
2.7
Australia
2.3
3.7


All states were positive contributors to Australia's GDP growth in 2004-05. The highest contributions to GDP growth were from Queensland (0.7 percentage points) and Victoria (0.6 percentage points).


The volume estimates of GSP included in this publication are derived indirectly. The method involves deriving a price deflator from the best possible current price and chain volume estimates of expenditure that encompass as much as possible of GSP. This deflator is then applied to current price income estimates of GSP. The volume estimates are labelled as 'experimental' for reasons set out in the Explanatory Notes (paragraphs 30 to 34). Users should therefore exercise caution when using these estimates for economic analysis.


Given these measurement issues, the ABS is currently developing estimates of GSP using the production approach. The ABS believes that better quality volume estimates of GSP can be produced using this approach. Experimental estimates using the new approach are expected to be released during 2006.



GSP PER CAPITA

For some analytical purposes it is important to allow for the impact of population growth on movements in GSP. The annual growth in GSP per capita was lower than GSP growth for all states.


Most states showed growth rates in GSP per capita that were stronger than the Australian growth rate of 1.2%. Tasmania (up 3.2%), the Australian Capital Territory (up 2.7%) and the Northern Territory (up 2.5%) showed the strongest growth while New South Wales had the weakest growth in GSP per capita of 0.4%.

GSP per capita, Chain volume measures - 2003-04 to 2004-05
Graph: GSP per capita, Chain volume measures—2003–04 to 2004–05




REAL GROSS STATE INCOME

Volume estimates of GSP measure the volume of goods and services produced in each state. If the terms of trade for a state change significantly (i.e. the prices for a state's exports and imports change at different rates) then GSP will not accurately reflect the change in real purchasing power of the income generated within a state. For this reason, real gross state income (RGSI) includes an adjustment for the terms of trade. (For details on the calculation method see the Explanatory Notes, paragraphs 35 to 37).


The following graph shows annual percentage changes in RGSI per capita in 2004-05. All states, except the Australian Capital Territory, experienced a growth in RGSI per capita stronger than GSP per capita in 2004-05 following the national trend of very favourable movements in the terms of trade. In the past year the improvement in the terms of trade have been lead by strong rises in prices for mineral resources. Consequently, the impact of the terms of trade adjustment can be seen to have more significantly affected Western Australia, Queensland and the Northern Territory. These are all states in which mining is an important contributor. An article outlining the nature and impact of the terms of trade was released in March 2005. It can be found on the National Accounts theme page which is accessed via the ABS web site <http://www.abs.gov.au>.

RGSI per capita, Chain volume measures - 2003-04 to 2004-05
Graph: RGSI per capita, Chain volume measures—2003–04 to 2004–05




STATE FINAL DEMAND (SFD)

Volume growth in state final demand was positive in all states in 2004-05 with the strongest growth in Tasmania (up 6.7%), Queensland (6.0%) and Western Australia (up 5.9%). Growth in these states was driven by strong growth in both total final consumption expenditure and total gross fixed capital formation.


The remaining states experienced growth in state final demand below that of national domestic final demand growth of 4.4%. South Australia was the weakest with 3.2% growth.

State final demand, Chain volume measures(a) - 2004-05

Levels
2003-04
2004-05
SFD growth
Contribution to DFD
$m
$m
%
% pts

New South Wales
284 606
294 102
3.3
1.1
Victoria
212 737
221 654
4.2
1.0
Queensland
156 771
166 218
6.0
1.1
South Australia
60 368
62 325
3.2
0.2
Western Australia
84 911
89 878
5.9
0.6
Tasmania
17 091
18 237
6.7
0.1
Northern Territory
11 531
12 016
4.2
0.1
Australian Capital Territory
27 322
28 215
3.3
0.1
Australia
855 338
892 645
4.4
. .

. . not applicable
(a) Reference year for chain volume measures is 2003-04.


All states were positive contributors to Australia's domestic final demand growth in 2004-05. New South Wales and Queensland each contributed 1.1 percentage points while Victoria contributed 1.0 percentage point. These three states accounted for around 75% of the growth in total domestic final demand.



GOVERNMENT FINAL CONSUMPTION EXPENDITURE

Government final consumption expenditure rose in all states in 2004-05. Tasmania showed the strongest growth in chain volume terms of 5.9%, driven by both strong national and state and local expenditure. The lowest growth was recorded in South Australia (up 3.1%), followed by New South Wales and Queensland both growing 3.4%. The major contributors to Australia's growth in government final consumption expenditure of 3.7% were New South Wales (1.0 percentage point), Victoria ( 0.9 percentage points) and Queensland (0.6 percentage points).



HOUSEHOLD FINAL CONSUMPTION EXPENDITURE

Household final consumption expenditure volume growth was strongest in Western Australia (up 6.1%), Tasmania (up 5.8%) and Queensland (up 5.5%). Weaker growth was experienced in the Australian Capital Territory (up 2.4%), New South Wales (up 3.0%) and South Australia (up 3.2%). The major contributors to Australia's growth in household final consumption expenditure of 4.3% were Victoria (1.2 percentage points) and New South Wales and Queensland (each 1.0 percentage point).



PRIVATE GROSS FIXED CAPITAL FORMATION

In 2004-05, Tasmania had the strongest growth in private gross fixed capital formation, up 12.9%. Queensland also experienced strong growth of 7.0%. In both states, strong private investment in machinery and equipment was the main contributor to growth. The other states all had weaker growth than the Australian growth of 4.6% - New South Wales (4.1%), Victoria (4.0%), Western Australia (3.9%), the Australian Capital Territory (2.6%), South Australia (2.3%) and the Northern Territory (no growth). The major contributors to Australia's growth were Queensland (1.4 percentage points), NSW (1.3 percentage points) and Victoria (1.0 percentage point).



PUBLIC GROSS FIXED CAPITAL FORMATION

The pattern of volume growth for public gross fixed capital formation varied considerably across the states in 2004-05. While all states grew except for Victoria (down 5.4%), the Northern Territory (up 30.3%) and Western Australia (up 24.2%) showed particularly strong growth, while in Tasmania weak growth of only 0.2% was recorded. The major contributors to Australia's growth in public gross fixed capital formation of 7.7% were Queensland (3.7 percentage points), Western Australia (2.5 percentage points) and New South Wales (1.6 percentage points) while Victoria detracted 1.2 percentage points.



INDUSTRY COMPOSITION OF TOTAL FACTOR INCOME

Factor incomes grew in all states with the Northern Territory showing the strongest growth (11.1%), followed by Queensland (10.3%) and Western Australia (10.0%). The other states showed growth rates of between 4% and 8%. Australian factor incomes grew by 6.9%.


There was strong overall growth in compensation of employees, which grew by 7.0% in Australia between 2003-04 and 2004-05. Queensland (up 9.4%) and Tasmania and the Northern Territory (each up 9.1%) showed the strongest growth while the Australian Capital Territory (up 5.5%) and South Australia (up 5.8%) showed weaker growth.


All states experienced growth in gross operating surplus (GOS) and gross mixed income (GMI) in 2004-05. GOS and GMI growth was strongest in the Northern Territory and Western Australia, up 12.6% and 12.4% respectively. Growth was weaker in South Australia (up 3.4%), Victoria (up 4.2%) and New South Wales (up 4.8%), with these three states being below the national growth rate of 6.9% for GOS and GMI.


The table below shows industry contributions to total factor income for 2004-05. In line with long term trends, there has been a shift from goods to service industries over the period 1990-91 to 2004-05.

Industry Contribution to Total Factor Income(a) - 2004-05

NSW
Vic
Qld
SA
WA
Tas
NT
ACT
Aust
%
%
%
%
%
%
%
%
%

Agriculture, forestry and fishing
2
3
4
6
5
7
3
-
3
Mining
2
1
8
2
21
2
20
-
5
Manufacturing
12
15
11
16
9
16
8
2
12
Electricity, gas & water supply
2
3
2
3
3
5
2
2
2
Construction
7
6
8
6
7
5
8
7
7
Wholesale trade
5
6
5
4
4
3
2
2
5
Retail trade
6
6
8
6
6
8
5
5
7
Accommodation, cafes and restaurants
3
2
3
2
2
3
3
2
2
Transport and storage
4
4
5
5
5
4
4
2
4
Communication services
3
4
3
3
3
3
3
3
3
Finance & insurance
10
9
5
6
4
6
3
4
7
Property & business services
15
14
10
10
11
6
8
13
13
Government administration and defence
3
2
4
3
2
5
7
26
4
Education
4
5
4
5
3
5
4
6
4
Health and community services
6
7
6
8
6
9
6
6
6
Cultural and recreational services
2
2
1
1
1
1
2
3
1
Personal and other services
2
2
2
2
2
2
2
3
2
Ownership of dwellings
9
8
8
9
6
7
9
9
8
General government(b)
2
2
2
2
2
3
3
4
2
Total
100
100
100
100
100
100
100
100
100

- nil or rounded to zero (including null cells)
(a) Industries may not add to total due to rounding differences.
(b) State details for general government gross operating surplus by industry are not available.


At the Australian level, the main industries contributing to 2004-05 total factor income growth were mining, manufacturing, construction and property and business services.


From a state perspective, there are differing industry impacts in total factor income growth. In 2004-05, the mining industry was a major contributor to growth in the Northern Territory, Western Australia and Queensland. Victoria, Queensland and Tasmania had strong growth in manufacturing total factor income while the Australian Capital Territory had strong growth in government administration and defence.



GROSS HOUSEHOLD DISPOSABLE INCOME PER CAPITA

The previous analysis of GSP per capita concentrates on the level of economic production and its growth. It does not provide a measure of incomes received by residents of a particular state, because a proportion of income generated in the production process may be transferred to other states or overseas (and conversely income may be received from other states or overseas). A measure that takes these flows into account is gross household disposable income per capita which is shown below.

Gross household disposable income per capita - 2004-05

$

New South Wales
28 629
Victoria
28 501
Queensland
24 455
South Australia
25 513
Western Australia
27 016
Tasmania
22 967
Northern Territory
26 728
Australian Capital Territory
43 084
Australia
27 468


Gross household disposable income per capita in 2004-05 was highest in the Australian Capital Territory and lowest in Tasmania. Differences between the states reflect differences in the impact of a range of factors including the average level of compensation of employees received per employee, the proportion of the population in employment, the age distribution of the population, and differences in the level of dwelling rent (including that imputed to owner occupiers). For example, a significant reason for the high level of gross household disposable income per capita in the Australian Capital Territory compared with other states is that the labour force participation rate is much higher there than in the rest of Australia.

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