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1301.0 - Year Book Australia, 2006  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 20/01/2006   
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Contents >> Chapter 29 - National accounts >> National balance sheet

NATIONAL BALANCE SHEET

The national balance sheet provides estimates of the value of Australia's produced, non-produced and financial assets, its liabilities to the rest of the world, and the net worth (defined as the difference between total assets and liabilities, including the value of equity in Australian enterprises owned by non-residents) of the total economy. The major national and sectoral balance sheet tables are published in Australian System of National Accounts (5204.0). Balance sheets are provided for each of the four domestic sectors: non-financial corporations, financial corporations, general government and households (including unincorporated enterprises and non-profit institutions serving households).

The non-produced assets included in the balance sheet cover experimental estimates of the value of some of Australia's natural resources: subsoil assets, timber available for log production and land. The monetary estimates of natural resources contained in the balance sheet are underpinned by physical estimates of particular natural resources. Further, since valuation of natural resources is a difficult and contentious undertaking, the monetary estimates of these natural resources should be considered in conjunction with the physical estimates.

The natural resource estimates are used to monitor the availability and exploitation of these resources and to assist in the formulation of environmental policies. More generally, data on the level, composition and change in assets and liabilities shown in the balance sheet indicate the extent of economic resources available to and claims on a nation and each of its institutional sectors.

Sectoral balance sheets provide information necessary for analysing a number of topics; for example, the estimation of household liquidity; and the computation of widely used ratios, such as assets to liabilities, net worth to total liabilities, non-financial to financial assets, and debt to income. In a period of concern about the level of saving in Australia, national and sector balance sheets provide additional information on the relationships between consumption, saving and wealth accumulation.

REAL/VOLUME BALANCE SHEETS

An article introducing experimental real/volume balance sheets for Australia was published in the March quarter 2001 issue of Australian National Accounts: National Income, Expenditure and Product (5206.0). Subsequently, estimates have been published annually in Australian System of National Accounts (5204.0). The real/volume balance sheet is designed to remove the effect of price changes, in much the same way as for other real and volume estimates, and allow for comparisons of changes in the value of Australia's assets and liabilities over time, free of the direct effects of inflation.

Volume estimates for the major categories of fixed asset stocks described as 'produced assets' - such as dwellings, non-dwelling construction, and machinery and equipment - have been available for many years in the Australian national accounts. However, volume estimates for stocks of non-produced, non-financial assets (land and other natural resources, etc.) and real estimates of financial assets, liabilities and net worth (wealth) have only recently become available. The calculation of volume and real estimates for some of these components is subject to some practical and conceptual difficulties, and therefore the term 'experimental' has been attached to these initial estimates.

The values of non-financial assets, such as dwellings, equipment and standing timber, can be decomposed into prices and volumes. Volume indexes, which measure the volume change of an aggregate between one period and another, can thus be derived by holding prices the same in the two periods. The ABS calculates an annual volume index of an aggregate by dividing its value in one year with its value in the previous year, using the prices of the earlier of the two years - termed the base year - to derive the values for both years. Chain volume indexes are then derived by multiplying successive annual volume indexes from a reference year to the current year. For example, starting with a year one reference year the chain volume index in year three is derived by multiplying the volume index for year one to year two by the volume index for year two to year three. ABS practice is to re-reference the chain indexes to the current price value of the aggregate in the year of the latest base year.

Financial assets and liabilities cannot be decomposed into prices and volumes, and so it is impossible to derive volume indexes for them. The same is true of gross operating surplus and other income flows, and is the reason why chain volume estimates of GDP cannot be derived by aggregating volume indexes of its income components. However, it is possible to deflate income flows, financial assets and liabilities by a price index in order to measure the purchasing power of the aggregate in question over a designated numeraire set of goods and services. Such measures are called 'real' estimates.

Real net worth has been derived by aggregating the chain volume estimates of the non-financial assets with the real estimates of financial assets less liabilities using the standard method of chain aggregation.

The ABS will continue to develop estimates of the value and volume of Australia's assets for inclusion in national balance sheets as additional data become available. Estimation techniques will be refined as research in Australia and abroad explores issues relating to the valuation of natural resources.

CURRENT PRICE BALANCE SHEET ESTIMATES

Australia's net worth at 30 June 2004 was estimated at $3,876.7b, an increase of $473.8b (13.9%) since 30 June 2003 (table 29.24). Of the increase, $31.0b was due to transactions (both capital and financial), and $442.8b was due to revaluations and other flows (including discoveries of subsoil assets). Graph 29.23 shows that the net worth series has exhibited the strongest growth in the years since 1996-97 during which annual rates of at least 6% were achieved.

Graph 29.23: CHANGE IN TOTAL NET WORTH - 30 June


Total produced assets at 30 June 2004 were estimated at $2,230.4b, an increase of 6% from the level at 30 June 2003 (table 29.24). The estimated value of produced assets rose at an average annual rate of 6% between 30 June 2000 and 30 June 2004 and consistently accounted for around 60% of net worth. At 30 June 2004, dwellings, non-dwelling construction, and machinery and equipment, represented about 92% of total produced assets. While computer software has consistently accounted for less than 2% of total produced assets over the period, the series has exhibited by far the strongest growth of produced assets, with an average annual rate between 30 June 2000 and 30 June 2004 of 8.9%.

29.24 NATIONAL BALANCE SHEET, Current prices - 30 June
2000
2001
2002
2003
2004
$b
$b
$b
$b
$b

TOTAL ASSETS
3,305.4
3,633.8
3,942.4
4,345.0
4,961.1
Non-financial assets
2,879.2
3,145.6
3,459.1
3,853.6
4,377.8
Produced assets
1,766.9
1,893.4
1,977.1
2,104.4
2,230.4
Fixed assets
1,662.3
1,784.2
1,867.1
1,992.4
2,113.9
Tangible fixed assets
1,636.1
1,753.4
1,833.6
1,957.0
2,077.3
Machinery and equipment
324.7
331.2
343.1
349.6
355.3
Non-dwelling construction
723.6
744.7
771.7
820.6
867.0
Livestock-fixed assets(a)
15.4
19.9
19.2
17.5
16.5
Dwellings
572.3
657.5
699.5
769.3
838.4
Intangible fixed assets
26.2
30.8
33.6
35.5
36.7
Computer software
25.5
30.0
32.8
34.6
35.8
Entertainment, literary or artistic originals
0.7
0.8
0.8
0.8
0.9
Inventories
104.6
109.2
110.0
112.0
116.5
Private non-farm(b)
83.4
88.0
87.4
90.2
94.4
Farm
6.8
7.1
7.4
7.0
6.5
Public authorities
3.8
3.0
3.0
2.9
2.8
Livestock-inventories
3.6
3.9
4.6
4.0
4.3
Plantation standing timber(c)
7.1
7.1
7.6
7.9
8.4
Non-produced assets(c)
1,112.3
1,252.2
1,481.9
1,749.2
2,147.4
Tangible non-produced assets
1,110.9
1,249.5
1,479.3
1,746.7
2,144.8
Land
906.5
991.4
1,154.5
1,400.2
1,760.4
Subsoil assets
200.3
252.0
318.3
339.6
376.8
Native standing timber
2.4
2.6
2.8
3.0
3.2
Spectrum
1.7
3.5
3.7
3.9
4.4
Intangible non-produced assets
1.4
2.7
2.6
2.6
2.7
Spectrum licences
1.4
2.7
2.6
2.6
2.7
Financial assets with the rest of the world
426.2
488.1
483.4
491.4
583.3
Monetary gold and SDRs
1.4
1.6
1.7
1.6
1.7
Currency and deposits
21.2
24.2
26.7
26.4
41.9
Securities other than shares
62.0
84.1
90.3
106.8
113.3
Loans and placements
39.2
57.2
61.2
61.1
78.6
Shares and other equity
282.0
294.3
278.0
269.5
322.2
Other accounts receivable
20.5
26.8
25.5
26.0
25.5
LIABILITIES TO THE REST OF THE WORLD
754.9
854.6
881.7
942.2
1,084.4
Currency and deposits
39.5
56.8
57.7
65.4
78.2
Securities other than shares
281.7
332.6
352.9
386.0
459.8
Loans and placements
85.0
96.7
106.7
113.3
104.4
Shares and other equity
338.1
358.1
353.2
363.1
429.9
Other accounts payable
10.6
10.3
11.3
14.3
12.2
NET WORTH
2,550.5
2,779.2
3,060.7
3,402.9
3,876.7
Memorandum items
Consumer durables
162.9
171.5
180.1
186.3
194.8
Direct investment
Foreign investment in Australia
196.2
201.2
215.9
237.2
254.0
Australian investment abroad
178.3
183.3
161.2
152.6
180.5
Non-rateable land
53.3
48.0
55.6
78.8
99.5

(a) Livestock-fixed assets included in the balance sheet include all animals and not just sheep and cattle as shown in the capital stock tables. (b) Includes for all periods the privatised marketing authorities. (c) Experimental estimates.

Source: Australian System of National Accounts, 2003-04 (5204.0).


REAL/VOLUME BALANCE SHEET ESTIMATES

Table 29.25 presents real/volume balance sheet data for Australia. Real net worth (total assets less total liabilities to the rest of the world) grew by 8.9% between 30 June 2000 and 30 June 2004, compared with an increase of 52.0% in current prices.

Total assets, in real terms, grew by 13.6% during this period, driven mainly by increased volumes of dwellings (15.0%), machinery and equipment (21.3%), subsoil assets (13.7%), and real total financial assets with the rest of the world (24.6%). Real financial liabilities to the rest of the world increased by 30.8% between 30 June 2000 and 30 June 2004.

29.25 NATIONAL BALANCE SHEET, Real/volume(a) - 30 June
2000
2001
2002
2003
2004
$b
$b
$b
$b
$b

TOTAL ASSETS
3,840.5
3,973.3
4,038.1
4,176.7
4,362.3
Non-financial assets
3,384.7
3,465.6
3,549.1
3,689.8
3,795.0
Produced assets
1,852.3
1,936.8
1,976.1
2,070.6
2,148.8
Fixed assets
1,746.2
1,826.9
1,865.4
1,954.6
2,026.8
Tangible fixed assets
1,725.1
1,799.3
1,832.8
1,919.0
1,987.7
Machinery and equipment
313.6
325.8
339.8
359.4
380.3
Non-dwelling construction
767.5
774.9
784.7
800.5
818.2
Livestock-fixed assets(b)
19.1
20.7
19.3
17.2
15.8
Dwellings
672.4
689.9
713.1
741.9
773.5
Intangible fixed assets
22.6
28.2
32.7
35.6
39.0
Computer software
21.3
26.6
30.9
34.8
38.2
Entertainment, literary or artistic originals
0.8
0.8
0.8
0.8
0.9
Inventories
105.9
109.7
110.7
116.0
122.0
Private non-farm(c)
88.7
90.5
91.9
92.7
99.1
Farm
8.1
8.7
9.2
8.8
8.0
Public authorities
3.9
3.0
3.0
2.9
2.8
Livestock-inventories
4.1
3.8
4.3
3.8
3.8
Plantation standing timber(d)
6.6
6.9
7.5
7.9
8.3
Non-produced assets(d)
1,529.8
1,548.0
1,572.8
1,619.2
1,646.2
Tangible non-produced assets
1,528.4
1,545.3
1,570.3
1,616.8
1,643.7
Land
1,244.1
1,252.8
1,264.1
1,278.6
1,294.0
Subsoil assets
301.5
310.1
325.9
331.7
342.8
Native standing timber
2.9
2.9
2.9
2.9
2.9
Spectrum
1.7
3.4
3.5
3.7
4.0
Intangible non-produced assets
1.4
2.7
2.5
2.4
2.4
Spectrum licences
1.4
2.7
2.5
2.4
2.4
Financial assets with the rest of the world
455.2
504.3
488.4
486.9
567.3
Monetary gold and SDRs
1.5
1.6
1.7
1.5
1.7
Currency and deposits
22.6
25.0
27.0
26.2
40.8
Securities other than shares
66.2
86.9
91.2
105.9
110.2
Loans and placements
41.8
59.1
61.8
60.5
76.5
Shares and other equity
301.2
304.1
280.9
267.1
313.4
Other accounts receivable
21.9
27.7
25.8
25.8
24.8
LIABILITIES TO THE REST OF THE WORLD
806.4
882.9
890.8
933.6
1,054.6
Currency and deposits
42.2
58.6
58.3
64.8
76.1
Securities other than shares
300.9
343.6
356.5
382.5
447.2
Loans and placements
90.8
99.9
107.8
112.3
101.5
Shares and other equity
361.2
370.0
356.8
359.8
418.1
Other accounts payable
11.3
10.7
11.4
14.1
11.8
NET WORTH
3,037.8
3,089.0
3,147.1
3,243.1
3,307.6

(a) Reference year for volume and real measures is 2002-03. (b) Livestock-fixed assets included in the balance sheet include all animals and not just sheep and cattle as shown in the capital stock tables. (c) Includes for all periods the privatised marketing authorities. (d) Experimental estimates.

Source: Australian System of National Accounts, 2003-04 (5204.0).


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