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1301.0 - Year Book Australia, 2006  
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Contents >> Chapter 29 - National accounts >> National income, expenditure and product accounts

NATIONAL INCOME, EXPENDITURE AND PRODUCT ACCOUNTS

The Australian national income, expenditure and product accounts are compiled and published in some detail every quarter, in Australian National Accounts: National Income, Expenditure and Product (5206.0), and in greater detail once a year, in Australian System of National Accounts (5204.0).

GDP ACCOUNT

The GDP account indicates changes in Australian production over time. Tables 29.4 and 29.5 show the GDP account in current prices for a number of years between 1975-76 and 2003-04. Table 29.4 provides a series of snapshots at five-yearly intervals to 1995-96, while table 29.5 shows annual time series from 1999-2000 to 2003-04. Table 29.6 shows expenditure on GDP in real or chain volume terms.

In real terms (i.e. after the effects of price change are removed from the dollar value of Australia's production), there was a fall in production during 1990-91. Since the recession in 1990-91, GDP has grown each year. Although growth in 1991-92 was relatively low (0.3%), by 1995-96 it had accelerated to 4.3%, a growth rate which was generally maintained until 1999-2000. In 2000-01 GDP recorded a smaller growth rate of 2.1% and then increased by 3.9% the following year. In 2003-04 GDP increased by 3.8%.

29.4 GDP ACCOUNT, Current prices - five-yearly intervals

1975-76
1980-81
1985-86
1990-91
1995-96
$m
$m
$m
$m
$m

Final consumption expenditure
 General government
14,699
27,093
49,713
74,545
92,860
 Households
45,459
84,097
144,502
233,726
299,595
 Total final consumption expenditure
60,158
111,190
194,215
308,272
392,455
Gross fixed capital formation
 Private
13,328
29,256
45,959
67,029
88,029
 Public
6,582
9,926
19,182
23,238
23,571
 Total gross fixed capital formation
19,910
39,182
65,141
90,267
111,600
Changes in inventories
180
446
870
-1,366
-813
Gross national expenditure
80,248
150,819
260,227
397,173
503,242
Exports of goods and services
11,225
22,604
38,948
66,259
99,095
less Imports of goods and services
11,163
25,530
47,199
66,948
101,078
Statistical discrepancy(a)
-714
-2,025
-3,393
1,320
-
Gross domestic product
79,597
145,868
248,583
397,804
501,257
Compensation of employees
43,919
75,044
123,434
192,723
241,100
Gross operating surplus
17,283
36,139
68,289
118,520
152,053
Gross mixed income
10,704
19,904
28,738
42,545
49,064
Total factor income
71,906
131,087
220,461
353,788
442,217
Taxes less subsidies on production and imports
7,895
14,753
27,805
43,407
59,041
Statistical discrepancy(b)
-204
29
317
609
-
Gross domestic product
79,597
145,868
248,583
397,804
501,257

(a) Expenditure-based.
(b) Income-based.

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


29.5 GDP ACCOUNT, Current prices

1999-2000
2000-01
2001-02
2002-03
2003-04
$m
$m
$m
$m
$m

Final consumption expenditure
General government
113,142
119,970
127,325
136,848
145,836
Households
372,509
401,472
424,829
453,202
484,935
Total final consumption expenditure
485,651
521,442
552,154
590,050
630,771
Gross fixed capital formation
Private
125,711
120,246
134,623
156,671
169,681
Public
24,898
25,115
27,314
28,131
29,568
Total gross fixed capital formation
150,609
145,361
161,937
184,802
199,249
Changes in inventories
1,791
1,064
510
2,173
4,676
Gross national expenditure
638,051
667,867
714,601
777,026
834,695
Exports of goods and services
126,222
153,763
153,200
148,293
143,366
less Imports of goods and services
140,811
153,205
154,573
167,169
167,169
Statistical discrepancy(a)
-
-
-
-
2,333
Gross domestic product
623,461
668,426
713,229
758,147
813,225
Compensation of employees
302,116
321,023
337,398
359,189
379,344
Gross operating surplus
193,899
209,500
225,319
244,014
267,307
Gross mixed income
54,212
55,538
64,965
61,896
67,145
Total factor income
550,227
586,061
627,682
665,099
713,796
Taxes less subsidies on production and imports
73,227
82,365
85,547
93,048
99,485
Statistical discrepancy(b)
-
-
-
-
-56
Gross domestic product
623,461
668,426
713,229
758,147
813,225

(a) Expenditure-based.
(b) Income-based.

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


29.6 EXPENDITURE ON GDP, Chain volume measures(a)(b)

1999-2000
2000-01
2001-02
2002-03
2003-04
$m
$m
$m
$m
$m

Final consumption expenditure
General government
126,921
129,027
131,724
136,848
140,252
Households
410,685
422,800
435,762
453,202
478,429
Total final consumption expenditure
537,565
551,806
567,485
590,050
618,681
Gross fixed capital formation
Private
133,238
122,144
135,273
156,671
167,591
Public
25,111
25,103
27,280
28,131
29,662
Total gross fixed capital formation
157,231
147,401
163,022
184,801
197,254
Domestic final demand
695,891
698,464
729,783
774,853
815,934
Changes in inventories
3,773
1,396
1,696
2,173
5,887
Gross national expenditure
697,931
699,966
731,919
777,026
821,821
Exports of goods and services
140,633
151,058
149,226
148,293
150,560
less Imports of goods and services
146,762
145,126
147,855
167,169
187,895
Statistical discrepancy(c)
-
-
-
-
2,268
Gross domestic product
692,889
707,140
734,575
758,147
786,754

(a) Reference year is 2002-03.
(b) Chain volume measures for years other than 2002-03 and 2003-04 are not additive.
(c) Expenditure-based.

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


The GDP account can also be used to show changes in the share of income accruing to labour (i.e. compensation of employees) compared with the share accruing to capital (i.e. profits, defined as the gross operating surplus of non-financial and financial corporations). Graphs 29.7 and 29.8 show how the shares of total factor income accruing to wages and to profits have changed since 1967-68. (Total factor income is equal to the sum of compensation of employees, gross operating surplus and gross mixed income.)

The highest recorded value of the wages share of total factor income was 61.5% in 1974-75. The wages share has recovered somewhat from its low value of 52.8% in 1988-89, but at 53.1% for 2003-04 it remains below the levels achieved during most of the 1970s and early-1980s. The wages share has remained stable during the 1990s, at levels similar to those during the 1960s. The profits share of total factor income of 26.7% in 2003-04 is the highest share recorded since 1959-60.

Graph 29.7: WAGES SHARE OF TOTAL FACTOR INCOME


Graph 29.8: PROFITS SHARE OF TOTAL FACTOR INCOME


NATIONAL INCOME ACCOUNT

The national income account shows the sources of national income and how much of this income is spent on final consumption. That part of income which is not spent in this way is saving. Tables 29.9 and 29.10 show the income account for a number of years between 1975-76 and 2003-04. Table 29.9 provides a series of snapshots at five-yearly intervals to 1995-96, while table 29.10 shows annual time series from 1999-2000 to 2003-04.

29.9 NATIONAL INCOME ACCOUNT, Current prices - five-yearly intervals

1975-76
1980-81
1985-86
1990-91
1995-96
$m
$m
$m
$m
$m

INCOME

Compensation of employees
43,919
75,044
123,434
192,723
241,100
Gross operating surplus
17,283
36,139
68,289
118,520
152,053
Gross mixed income
10,704
19,904
28,738
42,545
49,064
Taxes less subsidies on production and imports
7,895
14,753
27,805
43,407
59,041
Net primary income from non-residents
-1,202
-2,397
-6,853
-17,224
-19,533
Gross national income
78,599
143,443
241,413
379,971
481,725
Net secondary income from non-residents
-287
-441
-384
453
64
Gross disposable income
78,312
143,002
241,029
380,424
481,789

USE OF DISPOSABLE INCOME

Final consumption expenditure
General government
14,699
27,093
49,713
74,545
92,860
Households
45,459
84,097
144,502
233,726
299,595
Total final consumption expenditure
60,158
111,190
194,215
308,272
392,455
Net saving(a)
5,878
9,617
7,393
8,189
10,866
Consumption of fixed capital
12,276
22,195
39,421
63,963
78,468
Total use of gross disposable income
78,312
143,002
241,029
380,424
481,789

(a) Net saving is derived as a balancing item.

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


29.10 NATIONAL INCOME ACCOUNT, Current prices

1999-00
2000-01
2001-02
2002-03
2003-04
$m
$m
$m
$m
$m

INCOME

Compensation of employees
302,116
321,023
337,398
359,189
379,344
Gross operating surplus
193,899
209,500
225,319
244,014
267,307
Gross mixed income
54,212
55,538
64,965
61,896
67,145
Taxes less subsidies on production and imports
73,227
82,365
85,547
93,048
99,485
Net primary income from non-residents
-18,249
-18,702
-19,300
-21,469
-23,301
Gross national income
605,205
649,724
693,929
736,678
789,980
Net secondary income from non-residents
218
32
-17
-214
-29
Gross disposable income
605,423
649,756
693,912
736,464
789,951

USE OF DISPOSABLE INCOME

Final consumption expenditure
General government
113,142
119,970
127,325
136,848
145,836
Households
372,509
401,472
424,829
453,202
484,935
Total final consumption expenditure
485,651
521,442
552,154
590,050
630,771
Net saving(a)
22,447
23,230
28,165
27,006
33,198
Consumption of fixed capital
97,325
105,085
113,593
119,407
125,982
Total use of gross disposable income
605,423
649,756
693,912
736,464
789,951

(a) Net saving is derived as a balancing item.

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


Graph 29.11 shows net saving by institutional sector as a proportion of GDP for the years 1967-68 to 2003-04. Household net saving as a percentage of GDP generally rose between 1967-68 and 1974-75, but has fallen subsequently from its high of 9.8% in 1974-75 to a position in 2002-03 where consumption by households exceeded income and, consequently, household net saving was negative for the first time. In 2003-04 consumption further exceeded household income, by $15.2 billion (b) (table 29.13). General government net saving was negative from 1975-76 to 1996-97 (except for 1988-89 and 1989-90). In 2003-04 it was positive at 1.0% of GDP ($8.5b). In 2003-04 net saving of non-financial corporations was 2.7% of GDP ($22.1b). Net saving of financial corporations was negative from 1981-82 to 1986-87, the only period for which this sector has recorded negative net saving. In 2003-04 net saving of financial corporations was 2.2% of GDP ($17.8b).

Graph 29.11: NET SAVING, By sector - share of GDP


NATIONAL CAPITAL ACCOUNT

The national capital account shows how the saving from the national income account and consumption of fixed capital (depreciation) are used to finance gross fixed capital formation. If, as is currently the case for Australia, the nation's saving and consumption of fixed capital are not sufficient to pay for all the fixed capital needed for Australian production, the shortfall must be borrowed from overseas. The amount borrowed from overseas is shown in the national capital account as a negative entry for net lending to non-residents.

Tables 29.12 and 29.13 show the national capital account for a number of years between 1975-76 and 2003-04. Table 29.12 provides a series of snapshots at five-yearly intervals to 1995-96, while table 29.13 shows annual time series from 1999-2000 to 2003-04.

29.12 NATIONAL CAPITAL ACCOUNT, Current prices - five-yearly intervals

1975-76
1980-81
1985-86
1990-91
1995-96
$m
$m
$m
$m
$m

Net saving
Non-financial corporations
-1,681
43
1,367
-9,222
4,116
Financial corporations
747
341
-1,796
4,772
3,194
General government
-734
-3,144
-9,106
-6,269
-11,642
Households
7,547
12,377
16,928
18,909
15,198
Total net saving
5,878
9,617
7,393
8,189
10,866
Consumption of fixed capital
12,276
22,195
39,421
63,963
78,468
Net capital transfers receivable from non-residents
-27
167
830
2,071
1,045
Gross saving and capital transfers
18,127
31,979
47,644
74,223
90,379
Gross fixed capital formation
Private
13,328
29,256
45,959
67,029
88,029
Public corporations
2,790
5,584
10,664
12,271
11,322
General government
3,792
4,342
8,518
10,967
12,249
Total gross fixed capital formation
19,910
39,182
65,141
90,267
111,600
Changes in inventories
Private non-farm
91
115
882
-1,125
-487
Farm and public authorities
89
331
-12
-241
-326
Total changes in inventories
180
446
870
-1,366
-813
Acquisitions less disposals of non-produced non-financial assets
-
-
-
-7
-25
Statistical discrepancy(a)
-510
-2,053
-3,710
711
-
Net lending to non-residents
-1,454
-5,597
-14,658
-15,382
-20,382
Total capital accumulation and net lending
18,127
31,979
47,644
74,223
90,379

(a) Expenditure-based discrepancy less income-based discrepancy.

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


29.13 NATIONAL CAPITAL ACCOUNT, Current prices

1999-00
2000-01
2001-02
2002-03
2003-04
$m
$m
$m
$m
$m

Net saving
Non-financial corporations
-6,489
-1,186
13,242
12,382
22,120
Financial corporations
5,231
10,021
8,412
14,608
17,778
General government
17,530
2,307
3,191
12,600
8,527
Households
6,175
12,087
3,320
-12,584
-15,227
Total net saving
22,447
23,230
28,165
27,006
33,198
Consumption of fixed capital
97,325
105,085
113,593
119,407
125,982
Net capital transfers receivable from non-residents
1,136
1,182
1,186
1,103
1,230
Gross saving and capital transfers
120,908
129,497
142,944
147,517
160,410
Gross fixed capital formation
Private
125,711
120,246
134,623
156,671
169,681
Public corporations
9,018
8,811
10,092
10,781
11,243
General government
15,879
16,304
17,222
17,350
18,325
Total gross fixed capital formation
150,609
145,361
161,937
184,802
199,249
Changes in inventories
Private non-farm
1,864
1,601
284
2,691
5,240
Farm and public authorities
-73
-537
226
-518
-564
Total changes in inventories
1,791
1,064
510
2,173
4,676
Acquisitions less disposals of non-produced non-financial assets
83
73
170
112
31
Statistical discrepancy(a)
-
-
-
-
2,388
Net lending to non-residents
-31,567
-17,003
-19,674
-39,568
-45,934
Total capital accumulation and net lending
120,908
129,497
142,944
147,517
160,410

(a) Expenditure-based discrepancy less income-based discrepancy.

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


Graph 29.14 shows gross fixed capital formation (investment) by institutional sector as a proportion of GDP. For non-financial corporations this proportion generally fell during the 1970s, then rose to a peak of 13.1% in 1981-82. It has subsequently been above 10% except for the years 1991-92 to 1993-94. In 2003-04 investment by non-financial corporations was 10.7% of GDP. Household investment has generally remained at around 9% of GDP since the mid-1970s. In 2003-04 the ratio to GDP was 10.7%. General government investment as a proportion of GDP peaked at 4.6% in 1975-76. It has generally fallen since and was 2.3% of GDP in 2003-04. Financial corporations investment peaked in 1989-90 at 1.9% of GDP, and was 0.8% of GDP in 2003-04.

Graph 29.14: GROSS FIXED CAPITAL FORMATION, By sector - share of GDP


Graph 29.15 shows net lending by institutional sector as a proportion of GDP. A positive percentage for a sector indicates that it is a net lender to other sectors; a negative percentage indicates that it is a net borrower. The household sector has been a net lender for most years. As a proportion of GDP, net lending by households peaked in 1974-75 at 8.4%. Since then it has trended downwards, and in 2003-04 household lending was -6.3%. Non-financial corporations have been net borrowers over the whole period from 1967-68 to 2003-04, and the amounts borrowed have fluctuated significantly from year to year. As a proportion of GDP, their net borrowing was 1.4% in 2003-04. After being a net borrower throughout the 1980s, the financial corporations sector returned to being a net lender in 1990-91 and has remained so in all years since except for 1998-99. In 2003-04 financial corporations net lending represented 2.0% of GDP. After recording a record level of borrowing as a proportion of GDP in 1992-93 (6.4%), general government borrowing steadily declined. From 1997-98 to 1999-2000 the sector was a net lender and in 2000-01 and 2001-02 general government was a net borrower before returning to being a net lender in 2002-03. In 2003-04 general government net lending represented 0.4% of GDP.

Graph 29.15: NET LENDING, By sector - share of GDP


EXTERNAL ACCOUNT

The external account is derived from the detailed balance of payments current and capital accounts (see the International accounts and trade chapter). It shows Australia's exports and imports, incomes and transfers received by Australian residents from non-residents, and incomes and transfers payable to non-residents by Australian residents. The balance on the external account is net lending to non-residents. This is the same as the balance in the national capital account.

Tables 29.16 and 29.17 show the external account for a number of years between 1975-76 and 2003-04. Table 29.16 provides a series of snapshots at five-yearly intervals to 1995-96, while table 29.17 shows annual time series from 1999-2000 to 2003-04.

29.16 EXTERNAL ACCOUNT, Current prices - five-yearly intervals
1975-76
1980-81
1985-86
1990-91
1995-96
$m
$m
$m
$m
$m

Income account
Income of non-residents
Imports of goods and services
11,163
25,530
47,199
66,948
101,078
Primary income receivable
Compensation of employees
44
110
164
429
458
Property income receivable
1,587
3,147
8,879
20,552
26,215
Total primary income receivable
1,631
3,257
9,043
20,981
26,673
Secondary income receivable
773
1,264
1,797
2,422
3,228
Total income of non-residents
13,567
30,051
58,039
90,351
130,979
Uses of income of non-residents
Exports of goods and services
11,225
22,604
38,948
66,259
99,095
Primary income payable
Compensation of employees
59
119
165
432
610
Property income payable
370
741
2,025
3,325
6,530
Total primary income payable
429
860
2,190
3,757
7,140
Secondary income payable
486
823
1,413
2,875
3,292
Balance on external income account
1,427
5,764
15,488
17,460
21,452
Total use of income of non-residents
13,567
30,051
58,039
90,351
130,979
Capital account
Balance on external income account
1,427
5,764
15,488
17,460
21,452
Capital transfers receivable
203
320
486
653
907
less Capital transfers payable
176
487
1,316
2,724
1,952
Total net capital transfers
27
-167
-830
-2,071
-1,045
Gross saving and capital transfers
1,454
5,597
14,658
15,389
20,407
Acquisitions less disposals of non-produced non-financial assets
-
-
-
7
25
Net lending (+) / net borrowing (-)
1,454
5,597
14,658
15,382
20,382
Total capital accumulation and net lending (+) / net borrowing (-)
1,454
5,597
14,658
15,389
20,407

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


29.17 EXTERNAL ACCOUNT, Current prices
1999-00
2000-01
2001-02
2002-03
2003-04
$m
$m
$m
$m
$m

Income account
Income of non-residents
Imports of goods and services
140,811
153,205
154,573
167,169
167,169
Primary income receivable
Compensation of employees
963
1,057
1,196
1,324
1,616
Property income receivable
31,055
33,923
33,776
35,455
37,516
Total primary income receivable
32,018
34,980
34,972
36,779
39,132
Secondary income receivable
4,407
4,421
4,297
4,447
4,302
Total income of non-residents
177,236
192,606
193,842
208,395
210,603
Uses of income of non-residents
Exports of goods and services
126,222
153,763
153,200
148,293
143,366
Primary income payable
Compensation of employees
826
912
902
900
986
Property income payable
12,943
15,366
14,770
14,410
14,845
Total primary income payable
13,769
16,278
15,672
15,310
15,831
Secondary income payable
4,625
4,453
4,280
4,233
4,273
Balance on external income account
32,620
18,112
20,690
40,559
47,133
Total use of income of non-residents
177,236
192,606
193,842
208,395
210,603
Capital account
Balance on external income account
32,620
18,112
20,690
40,559
47,133
Capital transfers receivable
1,199
1,260
1,357
1,301
1,399
less Capital transfers payable
2,335
2,442
2,543
2,404
2,629
Total net capital transfers
-1,136
-1,182
-1,186
-1,103
-1,230
Gross saving and capital transfers
31,484
16,930
19,504
39,456
45,903
Acquisitions less disposals of non-produced non-financial assets
-83
-73
-170
-112
-31
Net lending (+) / net borrowing (-)
31,567
17,003
19,674
39,568
45,934
Total capital accumulation and net lending (+) / net borrowing (-)
31,484
16,930
19,504
39,456
45,903

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


Australia has generally been a net borrower of funds from overseas. In the Australian national accounts, this situation is reflected by a negative value for net lending to non-residents. The only exception to this pattern was in 1972-73. Net borrowing from non-residents (i.e. negative net lending to non-residents), expressed as a proportion of GDP, increased significantly during the early-1980s and has remained at relatively high levels since then. Graph 29.18 shows net lending to non-residents as a proportion of GDP since 1967-68.

Graph 29.18: NET LENDING TO NON-RESIDENTS, Share of GDP


The importance of foreign trade to the Australian economy is illustrated by graph 29.19, which shows the ratios of imports and exports of goods and services to GDP for the financial years 1967-68 to 2003-04. In 2003-04 the import ratio was 20.6% and the export ratio, which has fallen for the past three years, was 17.6%.

Graph 29.19: IMPORTS AND EXPORTS, Share of GDP


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