The primary data source is the Economic Activity Survey. Data is aggregated to the Supply-Use Industry Classification (SUIC) level. The SUIC aggregation is mostly at the subdivision level of ANZSIC, with some instances at the group or division level.

Estimates for total annual Payments in Kind (PIK) for Australia are derived using the ATO publication, Taxation Statistics for the taxable value of fringe benefits and employee share schemes, as well as the Survey of Major Labour Costs (SMLC) for salary sacrificed benefits not subject to taxation.

The Survey of Employment and Earnings (SEE) and the Economic Activity Survey (EAS) are used to split the PIK estimates between the general government and non-general government sector (all other sectors), and disaggregate the private sector estimates to industry level.

Estimates of wages and salaries in cash and PIK are summed to form the wages and salaries estimates by industry.

For the Finance and Insurance Services industry (ANZSIC Division K), an estimate of financial corporation wages and salaries in cash is obtained from the Survey of Financial Information (SFI); Survey of Employment and Earnings; Economic Activity Survey; and Quarterly Business Indicators Survey; where it is available for each component of this industry. For years where SMLC data are not available, the annual estimate is based on data from APRA, QBIS, SEE and SFI. An estimate for financial corporations PIK is added, as described for non-financial corporations.

For the Auxiliary Finance and Insurance Services industry, an estimate of financial corporation wages and salaries is obtained from the Economic Activity Survey and Survey of Employment and Earnings.

A base estimate of general government wages and salaries is obtained from the Survey of Employment and Earnings. To this an estimate for overseas general government staff wages and salaries is added, based on data received from the Department of Foreign Affairs and Trade (DFAT).

The estimate is then disaggregated to industry level using weights derived from general government output by industry. An estimate for wages and salaries of defence personnel is obtained from the Department of Defence and, until 1 July 2015 also, the Defence Materiel Organisation (DMO). This estimate is used to replace the value calculated for the Defence industry from the Survey of Employment and Earnings as military personnel are outside the scope of this survey.

Estimates for total annual PIK for Australia are derived using the ATO publication, Taxation Statistics for the taxable value of fringe benefits and employee share schemes, and SMLC data related to salary sacrificed benefits not subject to taxation.

The Survey of Employment and Earnings and Economic Activity Survey are used to split the PIK estimates between the general government sector and the non-general government sector (all other sectors). The estimates for general government wages and salaries and PIK are summed by ANZSIC division, and then further disaggregated to SUIC level, based on weights derived from general government output.

Estimates of superannuation contributions are based on data obtained from Government Finance Statistics and are disaggregated to the ANZSIC division level based on the most recent Survey of Major Labour Costs. Estimates for worker's compensation payments are based on data in the most recent SMLC and, in years where the survey is not conducted, are moved forward based on wages and salaries from the Survey of Employment and Earnings. These two components are summed together to form ESC by ANZSIC Division.

This aggregate is then disaggregated to the industry level using weights of general government output, except for ANZSIC Division O (Public Administration and Safety). An adjustment is made for the Defence Industry to ensure correct coverage and alignment to the annual reports of the Department of Defence, Defence Materiel Organisation, and the administered military compensation schemes contained in the annual report of the Department of Veterans Affairs.

Quarterly estimates of wages and salaries (including payments in kind) for annually benchmarked years are obtained for the private and public sectors for each State and Territory by distributing the total annual estimates according to the previously calculated quarterly distribution of:

• private (farm plus non-farm) wages and salaries; and
• public (civilian plus defence plus payments to staff of Australian embassies and consulates overseas) wages and salaries.

For the latest year, the quarterly estimates of wages and salaries are calculated by extrapolating the latest quarterly estimates that have been benchmarked to an overall annual level by the following subcomponents.

Annual benchmarks for GOS and GMI of private non-financial corporations, unincorporated enterprises and private financial corporations providing auxiliary finance and insurance services (ANZSIC subdivision 64) are derived from the Economic Activity Survey, using the following calculation:

GOS/GMI = Output
       less Intermediate consumption
       less Compensation of employees
       less Other taxes on production
       plus Other subsidies on production.

Note also the GOS for NPISH units is depreciation as reported in the Economic Activity Survey. This is a proxy for consumption of fixed capital, which is conceptually the GOS for the NPISH sector. The Perpetual Inventory Method which provides estimates of COFC does not distinguish between household and NPISH sectors.

NPISH GOS is calculated as gross output less the costs incurred in producing that output (but before deducting consumption of fixed capital), leaving consumption of fixed capital (COFC) as the residual.

Banks and similar financial intermediaries largely finance their activities by the excess of interest received over interest paid. If GOS were calculated in the same way as for other institutional sectors, it would be negative because only explicit service charges and operating expenses would be taken into account. In the national accounts, interest received is not considered to be part of income from production, and likewise interest paid is not part of expenses incurred in deriving income from production. The approach adopted in 2008 SNA and the ASNA is to include the indirect charges as imputed service charges in addition to any actual charges which are made by these financial corporations, and to include it in the calculation of GOS. The imputed service charge is entitled financial intermediation services indirectly measured (FISIM).

Financial intermediaries such as investment funds earn net income from their dividends and reinvested earnings. In the national accounts, dividends and reinvested earnings are not considered to be part of income from production, but part of property income recorded in the income accounts. The investment funds distribute all the net income to the investors of the funds. The ASNA imputes an output for these funds equal to the cost of running the fund (total administrative and investment expenses) less any income derived directly, with an assumption that the GOS for these funds equals zero.

Balance sheet, income and expenditure and interest rate information are used to compile GOS for the following financial intermediaries – the Reserve Bank of Australia; banks; other depository corporations (credit unions, building societies, cash management trusts, registered financial corporations); central borrowing authorities; securitisers and financial intermediaries not elsewhere classified (e.g. public unit trusts excluding property trusts; public development authorities; investment companies; common funds; co-operative housing societies; public housing schemes; and other financial corporations).

The following outlines the data sources used to estimate the various components of output:

Balance sheets:

• ABS publications:  Australian National Accounts, Finance and Wealth; Assets and Liabilities of Australian Securitisers; Managed Funds, Australia; and Australian System of National Accounts for capital stock estimates;
• Suite of APRA forms:  monthly Statement of Financial Position – banks for detailed breakdown of bank loans and deposits; and
• RBA’s Statistical Bulletin.

Income and expenditure:

• ABS publications: Balance of Payments and International Investment Position, Australia; Statistics of Financial Institutions (this publication has ceased but the data in this publication still underpin estimates);
• ABS collections: Economic Activity Survey; Quarterly Survey of Financial Information, Government Finance Statistics;
• RBA: Annual Report; Financial Stability Report (6 monthly); Statement of Monetary Policy (quarterly);
• Suite of APRA forms:  quarterly Statement of Financial Performance – banks and quarterly Statement of Financial Performance – Registered Financial Corporations (RFCs);
• APRA publications:  quarterly statistics for banks, building societies and credit unions performance; and
• ad hoc reports: annual reports for small subsectors such as listed investment companies, bank annual reports and private consultant banking reports.

Interest rates:

• RBA’s Statistical Bulletin.

GOS is calculated as:

FISIM imputation
     plus imputed output of financial intermediaries not elsewhere classified
     plus imputed output of RBA
     plus explicit charges of financial institutions
     plus gross non-land rent and other service income (excludes property income)
     plus non-life insurance premiums (payable by financial corporations)
     less expenses (excluding consumption of fixed capital)
     less FISIM (payable by financial corporations)
     less non-life insurance service charge (payable by financial corporations).

The following adjustment is also included to obtain GOS:

• own-account computer software and R&D.

Note that profits and losses on foreign exchange dealings are excluded from GOS because they constitute holding gains and losses in the national accounts.

The difference between buying and selling rates and mid-point exchange rates is treated as a service charge.

To compile the FISIM imputation estimate for all financial intermediaries (except the Reserve Bank of Australia and financial intermediaries n.e.c.), total interest receivable and payable estimates by financial instruments (i.e. deposits, bills of exchange, one-name paper, bonds and loans) and counterparty sector and subsector flows are compiled for the following six sectors and subsectors:

• rest of the world;

• Reserve Bank of Australia;

• banks;

• other depository corporations;

• central borrowing authorities; and

• securitisers.

Three datasets are required to compile the interest flows, namely:

• total interest payable and receivable;
• interest rates for relevant financial instruments of various sectors and subsectors; and
• financial assets and liabilities for the six sectors and subsectors.

The next step is to calculate FISIM for loans and deposits (banks and other depository corporations) and for loans (securitisers and central borrowing authorities).

• For banks and other depository corporations, FISIM is derived as follows:

where the reference rate is mid-point between the average interest rate on loans and the average interest rate on deposits.

• For securitisers and central borrowing authorities, FISIM is derived as follows:

where the reference rate is weighted average bond yield.

The above calculations are undertaken in separate loan and deposit FISIM tables for each of the four FISIM generating institutions. Each table captures the counterparty sector and subsector loan and deposit balances, their respective interest flows and interest margins and the subsequent FISIM estimates.

The ASNA has divided the activity of the RBA into two types:

• monetary policy and other non-market services, where a cost-based output measure is imputed; and
• financial market operations of the RBA, where output in the form of explicit charges is earned on activities such as its daily repurchase (lending) program. This part of the RBA would generate a GOS as its gross output would exceed costs.

Expenses include wages and salaries, purchases of goods and services, and other taxes (less other subsidies) on production.

Also included as expenses are the imputed services for both FISIM and non-life insurance attributable to corporations in the financial corporations sector, which need to be deducted as a component of intermediate consumption.

As business accounts of these financial corporations would have already included non-life insurance premiums as expenses rather than according to the 2008 SNA concept of the insurance service charge, it is necessary to add back the premium payments.

An adjustment is also required to ensure that all expenditure on research and development and expenditure on software of a capital nature are capitalised rather than being deducted as current expenses.

Non-life insurance corporations do not identify an explicit service charge as part of their premiums. However, their premiums can be regarded as being composed of two components: an implicit service charge, and a transfer payment to cover the risk of providing insurance cover.

The non-life insurance service charge is defined as premiums earned plus premium supplements less expected claims.

Premiums earned include direct premiums earned plus inward reinsurance premiums less outward insurance premiums and statutory charges paid. The item represents the amount of premium income earned during the financial year and includes movements in the unearned premium provision.

Premium supplements represent income earned on the technical reserves of non-life insurance corporations, which consist of unearned premiums (most premiums are paid for a full year in advance), and claims incurred but not yet paid (which arise because of delays in claims being lodged and assessed, and in finalising the payment of claims).

Premium supplements do not include any income from the investment of the insurance corporations' own funds. As the technical reserves are considered to be assets of the insurance policyholders, the investment income receivable by insurance enterprises must be shown in the accounts as being paid by the insurance enterprises to the policyholders. However, in practice this income is retained by the insurance enterprises. Therefore, it is treated as being paid back to the insurance enterprises in the form of premium supplements that are additional to actual premiums payable under the terms of the insurance policies.

In the case of workers' compensation, it is the worker who is regarded as the policyholder for the purposes of attributing the imputed property income earned on the insurance companies' technical reserves, not the employer. Although the employer is legally the policyholder for workers' compensation, for national accounts purposes the employer is deemed to be acting on behalf of the employee in paying workers' compensation premiums. Consequently, workers' compensation premiums are included as part of employers' social contributions, which is a component of compensation of employees.

Expected claims are generally defined as a centred five-year moving average of claims incurred. A moving average is used to avoid irregular movements in the non-life insurance service charge which would otherwise arise because of volatility in the annual data for claims incurred.

For superannuation funds the insurance service charge is equal to the cost of running the fund; included are administrative and investment expenses.

For life insurance and friendly societies, the insurance service charge is equal to the cost of running the business plus a profit margin. The profit margin is calculated by estimating a proxy return on equity.

Balance sheet and income and expenditure data are used to compile the GOS for superannuation funds (superannuation), life insurance corporations (including friendly societies) and non-life (general) insurance corporations.

Balance sheets:

• ABS publications:  Australian National Accounts, Finance and Wealth; Managed Funds, Australia; and the Australian System of National Accounts for capital stock estimates.

Income and expenditure:

• ABS collections:  Quarterly Survey of Financial Information;
• ABS publications:  Balance of Payments and International Investment Position, Australia;
• APRA forms: quarterly Statement of Financial Performance – superannuation funds;
• APRA publications: quarterly superannuation, life insurance and general insurance performance statistics; annual superannuation and friendly society bulletins; half-yearly general insurance bulletin and selected statistics on general insurance;
• ATO: self-managed superannuation funds taxation data and website releases; and
• ad hoc private consultant reports: superannuation actuarial reports and real estate statistics.

GOS is calculated as:

Insurance service charge (ISC)
     plus explicit charges
     plus gross non-land rent (excludes property income)
     plus non-life insurance business income plus subsidies
     plus non-life insurance premiums (payable by financial corporations)
     less expenses (excluding COFC)
     less FISIM (payable by financial corporations)
     less non-life insurance service charge (payable by financial corporations).

The following adjustment is also included to obtain GOS:

• own account computer software and R&D.

Non-life insurance corporations – the ISC is estimated as premiums earned plus investment income on the technical reserves less expected claims:

• premiums earned include direct premiums earned plus inward reinsurance premiums less outward insurance premiums and statutory charges paid;
• premium supplements represent income earned on the technical reserves of non-life insurance corporations, which consist of unearned premiums (most premiums are paid for a full year in advance), and claims incurred but not yet paid (which arise because of delays in claims being lodged and assessed, and in finalising the payment of claims);
• premium supplements do not include any income from the investment of the insurance corporations' own funds. The proportion of policyholder s funds to total assets of non-life insurance corporations is applied to total investment income to derive premium supplements.

Life insurance corporations – the ISC is the sum of administrative costs incurred (including investment and labour costs) plus a profit margin. The profit margin is calculated by estimating a proxy return on equity.

Superannuation funds – the ISC is the sum of administrative costs incurred (including investment and labour costs).

Expenses include wages and salaries, purchases of goods and services, and taxes on production and imports.

Also included as expenses are the imputed services for both FISIM and non-life insurance attributable to corporations in the financial corporations sector.

However, as business accounts of these financial corporations would have already included non-life insurance premiums as expenses and not the 2008 SNA concept of the insurance service charge, it is necessary to add back the premium payments.

An adjustment is also required to ensure that all expenditure on research and development and expenditure on software of a capital nature are capitalised rather than being deducted as a current expense.

Annual benchmarks for GOS of Auxiliary finance and insurance services are derived from the Economic Activity Survey, using the following calculation:

   Output 
   less intermediate consumption 
   less compensation of employees 
   less other taxes on production
   plus other subsidies on production.

General government GOS is equivalent to the value of consumption of fixed capital on general government assets. By convention, the value of general government gross output is measured as the cost of producing that output, including consumption of fixed capital.

GOS is estimated as equal to consumption of fixed capital and is therefore calculated as the residual of gross output less the costs incurred in producing that output.

Consumption of fixed capital at current prices for general government is derived using the Perpetual Inventory Method (PIM).

The estimates of public non-financial corporations GOS are based on data from Government Finance Statistics, which are compiled using annual financial statements obtained from all Commonwealth and State Treasuries along with annual reports of corporations and quasi-corporations.

The following adjustments are made:

• deduct FISIM;
• deduct insurance service charge (ISC); and
• add the capitalised component of expenditure on R&D.

GOS for Ownership of Dwellings is derived as:

    Output at basic prices
    less intermediate consumption
    less other taxes on production
    plus other subsidies on production.

An estimate of GOS for dwellings owned by sectors other than households is deducted to obtain GOS for dwellings owned by persons.

The sources for estimating GOS relating to ownership of dwellings by other sectors are:

• public non-financial corporations sector - derived from Government Finance Statistics;
• general government - equal to consumption of fixed capital of dwellings for general government sector; and
• private non-financial corporations – prior to 1999-2000, derived using benchmark data from past Surveys of Interest, Rent, Royalties and Dividends. From 1999-2000, total ownership of dwelling GOS is used to extrapolate forward the value of private non-financial corporations dwelling GOS.

The output estimate is equivalent to the estimate of household final consumption expenditure on imputed rentals for housing plus the actual rental on housing. No further adjustments are made.

The data sources and methods used to compile annual estimates of imputed rentals on housing and actual rental on housing are described in Chapter 10 (see Table 10.5 Annual household final consumption-Housing, water, electricity, gas and other fuels).

Intermediate use related to GOS for dwellings owned by persons include:

• repairs and maintenance;
• building insurance;
• FISIM on dwelling loans;
• real estate agent commissions charged for the management of rental properties, loan application fees and other direct charges by financial corporations; and
• miscellaneous expenses.

Repairs and maintenance are benchmarked from the periodic Household Expenditure Survey. The benchmarks are extrapolated using a combined indicator based on the estimated number of dwellings (the same estimate as used to estimate total dwelling rent) and movements in appropriate component price indexes from the CPI.

In this context repairs and maintenance cover the actual repairs to the dwelling and preventative maintenance such as painting internal and external surfaces. However, purchases of goods and services associated with cleaning a dwelling are included in household final consumption expenditure.

Other taxes on production include:

• municipal rates; and
• land tax on residential land.

Total farm GOS/GMI is derived as:

     Gross value added for Agriculture (ANZSIC Subdivision 01)
     less compensation of employees for the agriculture industry
     less production valuation adjustment
     less other taxes on production for the agriculture industry
     plus other subsidies on production for the agriculture industry.

For the benchmark years, gross value added is directly sourced from the benchmark estimate. The gross value of agricultural production for the benchmark is estimated from data collected in the Economic Activity Survey, together with additional data from various marketing organisations, wholesalers, brokers and auctioneers.

The general approach used is:

• Derive the market value of farm production by collecting quantity data from farm establishments and marketing organisations then
• Multiply the quantities by prices supplied by marketing boards, marketing reports, wholesalers, brokers and auctioneers.

For wheat, the current period crop is initially valued at the price expected to be realised on eventual sale.

For the latest year’s output and intermediate use (and therefore gross value added) for agriculture is estimated using data published in the ABS publication, Value of Agricultural Commodities Produced, Australia, and is supplemented by annual data from the ABARES publication, Agricultural Commodities.

Compensation of employees is estimated using supply and use benchmarks for wages and salaries and employer social contributions.

A ratio of unincorporated enterprises to incorporated enterprises for the agriculture industry is derived using data from the Australian Industry Statistics (AIS). This ratio is reviewed from time to time to ensure it remains relevant to current industry conditions.

This ratio is applied to the total farm GOS/GMI estimate to derive the farm GOS and farm GMI estimates.

The following calculation is then made:

     Total private non-financial corporations GOS and GMI
     less total farm GOS and farm GMI
     equals total non-farm private non-financial corporations GOS and non-farm GMI.

Annual estimates for non-farm private non-financial corporations and quasi-corporations are derived from Australian Taxation Office (ATO) statistics supplemented by information from the ABS and other sources.

Estimates for the most recent two years are based on preliminary tax data and various other indicators as there is a time lag in obtaining complete income tax data. At the time of the release of the annual national accounts, the third last year is based on complete tax data, the second last year is based on preliminary tax data and the last year is based on the same sources as those used to prepare the quarterly estimates.

Net business income for private non-financial corporations (excluding agriculture) is derived from the ATO data as follows:

     Total income
     less total expenses
     plus bad debts
     less dividends received
     equals net business income.

To align the net business income as closely as possible with 2008 SNA guidelines for GOS, the following adjustments are made:

     Non-farm private non-financial GOS equals:
     Net business income
     plus depreciation
     plus net interest, land rent and rent on natural resource assets paid
     plus a finance lease adjustment
     plus adjustment for understatement of net business income
     plus an adjustment for mineral and petroleum exploration expenditure
     plus intellectual property products (i.e. capitalised computer software, artistic originals, and R&D) adjustment
     plus non-life insurance premiums adjustment
     less non-life insurance service charges
     less FISIM
     less Inventory valuation adjustment (IVA).

Estimates for net interest, land rent and rent on natural resource assets are prepared using a matrix of flows for each of the three components. The matrices represent a fully balanced system of flows between each sector including the unincorporated sector. They are constructed using data from Government Finance Statistics; ABS collections from financial corporations; Reserve Bank of Australia; Australian Prudential Regulatory Authority; the ABS Balance of Payments; and Australian Taxation Office.

This adjustment is applied as net business income has already included net interest, land rent and rent on natural resource assets in its calculation but GOS needs to be valued prior to taking these items into account.

Annual non-farm GMI for unincorporated enterprises is derived from the Australian Taxation Office statistics supplemented by information from ABS and other sources.

Estimates for the most recent two years are based on preliminary tax data and various other indicators as there is a time lag in obtaining complete income tax data. At the time of the release of the annual national accounts, the third last year is based on complete tax data, the second last year is based on preliminary tax data and the last year is based on the same sources as those used to prepare the quarterly estimates.

Net business income for non-farm GMI is derived from the ATO data as follows:

     Total income
     less total expenses
     equals net business income.

The following adjustments are made in order to align the net business income as closely as possible with 2008 SNA guidelines for GMI:

     Non-agricultural GMI equals;
     Net business income
     plus depreciation
     plus net interest, land rent and rent on natural resource assets paid
     plus a finance lease adjustment
     plus owner-builders' gross mixed income
     plus net non-dwelling rent received
     plus adjustment for understatement of net business income
     plus adjustment for home production of goods
     plus intellectual property products (i.e. capitalised computer software, artistic originals and R&D) adjustment
     plus a bad debt adjustment
     plus non-life insurance premiums adjustment
     less non-life insurance service charges
     less FISIM
     less Inventory valuation adjustment (IVA).

Estimates for net interest, land rent and rent on natural resource assets are prepared using a matrix of flows for each of the three components. The matrices represent a fully balanced system of flows between each sector including the unincorporated sector. They are constructed using data from Government Finance Statistics; ABS collections from financial corporations; Reserve Bank of Australia; Australian Prudential Regulatory Authority; the ABS Balance of Payments; and Australian Taxation Office.

This adjustment is applied as the net business income has already included net interest, land rent and rent on natural resource assets in its calculation but GMI needs to be valued prior to taking these items into account.

Australian Taxation Office data are used to derive the ratios of non-farm private non-financial corporations (and quasi-corporations) GOS and non-farm GMI to total non-farm GOS and GMI.

These ratios are applied to total non-farm private non-financial corporations GOS and non-farm GMI to obtain estimates for both components.

For the latest year, GOS for financial corporations is compiled using data sources and methodology as described for the annual benchmarks section for (i) financial services and (ii) insurance and pensions funds services. Separate growth rates are derived for the latest year (t) and the unbenchmarked (prior to supply and use balancing) year t-1 GOS estimates for (i) financial services and (ii) insurance and superannuation funds services. The growth rates are applied to the benchmarks for the year t-1 to derive GOS estimates for the latest year for (i) financial services and (ii) insurance and pension superannuation services.

For auxiliary finance and insurance services GOS, an annual output indicator representing the funds management industry (a significant contributor to the GOS of auxiliary services) is derived. The pension fund investment expense from the GOS calculation of superannuation funds is used as the indicator. The superannuation funds predominately use the funds management industry to invest their members’ funds, and the investment expense would represent the fees charged by the funds management industry.

The growth rate for the latest year from the indicator series is applied to the benchmarks for the year t-1 to derive GOS estimates for the latest year for auxiliary finance and insurance services.

The latest year GOS estimates for (i) financial services, (ii) insurance and superannuation funds services and (iii) auxiliary finance and insurance services are summed to produce the total GOS for financial corporations.

General government GOS is equivalent to the value of consumption of fixed capital on general government assets because, by convention, the value of general government gross output is measured as the cost of producing that output, including consumption of fixed capital.

GOS is calculated as gross output less the costs incurred in producing that output (but before deducting consumption of fixed capital), leaving consumption of fixed capital as the residual.

For the latest year annual estimates of consumption of fixed capital at current prices for general government (general government GOS) are derived using a Perpetual Inventory Method.

Total farm gross operating surplus and gross mixed income for the latest year is derived using a production approach and is measured as gross value of agricultural production less the costs incurred (but before deducting net interest and land rent paid and consumption of fixed capital). The gross value of agricultural production includes an allowance for backyard production of fruit and vegetables and the value of meat produced from livestock raised for household use.

Gross value of production for agriculture is estimated using data in the ABS publication, Value of Agricultural Commodities Produced, Australia, and is supplemented by annual data from the ABARES publication, Agricultural Commodities.

Intermediate inputs use the same data sources as the gross value of production.

Compensation of employees is estimated using S-U benchmarks for wages and salaries and employer social contributions and extrapolating benchmark estimates for the latest year using data from the ABARES publication, Agricultural Commodities (Farm Costs and Returns – Labour).

An estimate of farm GOS for private non-financial corporations and quasi-corporations has to be removed from total farm GOS and GMI to obtain an estimate of gross mixed income of farm unincorporated enterprises. The estimate of farm GOS for private non-financial corporations is derived by applying ratios of unincorporated and incorporated farm enterprises to the total farm GOS and GMI. This ratio was derived from business income data from Australian Taxation Office several years ago.

Non-farm GMI is derived by extrapolating the benchmarked annual gross mixed income for the year t-1, using the movements in annualised quarterly estimates of unincorporated gross operating profit (UGOP), between year t-1 and t, from the quarterly Business Indicators, Australia. UGOP measures the profit earned from the production of goods and services, excluding the effects of financing activities and income tax. UGOP is used for most industries with the exception of:

• Construction – uses the annualised quarterly movement in the value of work done from the Building Activity Survey,
• Health and Community services – uses the annualised quarterly movement in the household final consumption expenditure on medical and dental services.

The annual benchmarks are allocated to quarters using gross operating profits data from the Quarterly Business Indicators Survey.

For incomplete years the quarterly estimates of private non-financial corporations GOS are calculated by extrapolating the latest quarterly estimates that have been benchmarked to an overall annual level. The movements in the gross operating profits data from the Quarterly Business Indicators Survey are used as the indicator.

Annual non-farm GMI estimates are allocated to the quarters and extrapolated for quarters in year t-1 (and quarters in the incomplete year) based on a combination of QBIS data for unincorporated enterprises, average weekly earnings and labour force self-employed data as indicators.

This provides an estimate for the majority of the unincorporated non-farm businesses but due to the limitations of the QBIS data when surveying unincorporated enterprises, additional sources are required:

• Construction – uses the movement in the value of work done from the Building Activity Survey,
• Health and Community services – uses the movement in the household final consumption expenditure on medical and dental services.

A range of indicators are used to allocate annual estimates of farm GMI to quarters. Estimates for the current years’ quarters are derived as a quarterly allocation of forecast annual totals. The allocations are based on estimated patterns of production and costs and are progressively updated as data become available. As mentioned previously, the annual estimates (including forecasts) largely depend on the Australian Bureau of Agricultural Resources and Sciences data, which are regularly revised to reflect weather and market conditions.

Annual estimates of the gross value of production for:

• wheat and barley – allocated to quarters on the basis of historical receivals data supplied by the respective marketing boards;
• other grains and crops – largely allocated according to proportions derived on the basis of the applicable harvesting season;
• livestock slaughterings – allocated to quarters using estimates of the quantity of meat produced, obtained from the quarterly publication, Livestock Products, Australia; and
• wool production – is split into two categories:
  • shorn wool – derived using wool receivals data published in the ABS publications, Livestock Products, Australia and Value of Agricultural Commodities Produced, Australia, and data from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES); and
  • skin wool – derived using quarterly lamb and sheep slaughterings data from the ABS publication, Livestock Products, Australia, and the average greasy wool price from the Australian Wool Exchange (AWEX).

Annual estimates of farm production costs are allocated to quarters on the basis of the pattern of usage appropriate for each particular input. Some inputs are particularly seasonal, such as seed, fodder, fertilisers, fuel usage and the wages of seasonal workers.

Other inputs, such as marketing costs, are allocated according to the estimated gross value of production in each quarter or on the basis of linear trend.

GOS for ownership of dwellings on a quarterly basis is derived as:

     Output at basic prices
     less intermediate consumption
     less other taxes on production
     plus other subsidies on production.

An estimate of GOS for dwellings owned by sectors other than households is deducted to obtain GOS for dwellings owned by persons. 

The output estimate is equivalent to the estimate of household final consumption expenditure on imputed rentals for housing plus the actual rental on housing. No further adjustments are made.

The data sources and methods used to compile quarterly estimates of imputed rentals on housing and actual rental on housing are described in Chapter 10 (see Table 10.18 Quarterly household final consumption expenditure - Housing, water, electricity, gas and other fuels).

Intermediate use related to dwellings owned by persons GOS includes:

• repairs and maintenance;
• building insurance;
• FISIM;
• real estate agent commissions charged for the management of rental properties;
• loan application fees;
• other direct charges by financial corporations; and
• miscellaneous expenses.

GOS of general government is equivalent to the value of consumption of fixed capital on general government assets because, by convention, the value of general government gross output is measured as the cost of producing that output, including consumption of fixed capital.

GOS is calculated as gross output less the costs incurred in producing that output (but before deducting consumption of fixed capital), leaving consumption of fixed capital as the residual.

On a quarterly basis estimates of consumption of fixed capital at current prices for general government (general government GOS) are derived by extrapolation using a linear trend model.

The quarterly estimates for GOS of financial corporations are derived by producing output indicators series within the subcategories:

• financial services;
• insurance and superannuation funds services; and
• auxiliary finance and insurance services.

The output indicator is made up of the following:

• Life Insurance – the quarterly source data indicator is the operating expenses for total life insurance businesses sourced from the Quarterly Life Insurance Performance Statistics published by APRA. The quarterly insurance service charge indicator for Life Insurance is calculated using the quarterly movement of the indicator source data against the previous quarter’s insurance service charge indicator for Life Insurance.
• Superannuation funds – there are two quarterly source data indicators used for Superannuation funds. Total investment expenses and total operating expenses of superannuation funds are sourced from the Quarterly Superannuation Performance Statistics report published by the Australian Prudential Regulatory Authority. The quarterly insurance service charge indicator for superannuation funds is calculated using the quarterly movement of the indicator source data against the previous quarter’s insurance service charge indicator for Superannuation funds.
• Non-life insurance – the insurance service charge indicator for non-life insurance is estimated via a linear trend interpolation of the annual estimates.

A weighted (based on the annual insurance service charge estimates) sum of the three components is derived to produce a quarterly indicator of the insurance service charge.

Data from Government Finance Statistics from the ABS publication, Government Finance Statistics, Annual is the main source used to compile taxes and subsidies for all levels of government.

Government Finance Statistics – classified by tax type and purpose – are used to compile taxes and subsidies. Each tax type and purpose category are defined as relating to either taxes and subsidies on products or other taxes and subsidies on production.

Information about Commonwealth and State general government production taxes and subsidies is received from Government Finance Statistics, which are obtained from administrative sources such as the Commonwealth Department of Finance quarterly ledger, and State government quarterly statements of receipts and expenditure. Quarterly data for local government rates are collected from a sample of local government authorities.

For those production taxes and subsidies where an adjustment to a payable basis is made, the accrual figure is estimated by allocating cash receipts and payments (or estimated cash receipts and payments) to quarters according to the proportion of production or activity occurring in each quarter. For example, the quarterly Goods and Services Tax (GST) is extrapolated using expenditure on goods and services that attract GST. Household final consumption expenditure, gross fixed capital formation, lawyer and real estate fees and intermediate consumption by financial corporations are used for this allocation.

Total other taxes and subsidies on production are sourced from quarterly GFS data. Other taxes and subsidies on production are also allocated to specific industries quarterly where the same proportions used to establish the latest year estimates by industry are applied.

The data are split into industries for known other taxes and subsidies on production using various sources, including GFS, ATO, Survey of Major Labour Costs, motor vehicle capital stock data and the proportion of residential land to the total value of land. 

Known other taxes on production are those taxes for which quarterly estimates are available. These include payroll tax, taxes on capital and financial transactions, motor vehicle tax, land tax and municipal rates, carbon tax and the surrender of Renewable Energy Certificates from energy generators and use of ATO data.

Known other subsidies on production are those subsidies for which quarterly estimates are available. These include Renewable Energy Certificates, carbon credits, and the COVID-19 specific subsidies including JobKeeper, Boosting cash flow for employers, Supporting apprentices and trainees, Aged care preparedness, and the Early childhood education and care relief packages.

Industry estimates are obtained by extrapolating off the latest Supply-Use benchmarks using the indicator series described above.

See paragraph 11.47 for further details.

The public and private sector contribution to wages and salaries for each industry is determined using information from the Survey of Employment and Earnings, Public Sector, Australia which provides the public sector split of wages and salaries by industry.

For industries with no public sector contribution, QBIS wages per industry is used to extrapolate off the latest Supply-use benchmark.

For industries with public sector contribution a combination of indicator series is used to produce the quarterly estimates. This includes wages and salaries by industry from QBIS to account for private wages and GFS for public wages. These indicators are used to extrapolate the latest annual estimate based on their respective private and public sector COE indicator.

Estimates from ABARES are used as the indicator for the Agriculture, Forestry and Fishing industry.

Private non-financial corporations GOS by industry estimates are calculated by extrapolating the latest quarterly estimates off annual benchmarks. QBIS CGOP by industry is the source for all industries excluding Agriculture, Forestry and Fishing, Public Administration and Safety, Education and Training and Health Care and Social Assistance.

Estimates from ABARES are used as the indicator for the Agriculture, Forestry and Fishing industry.

Quarterly estimates for Public Administration and Safety; Education and Training; and Health Care and Social Assistance are derived using linear trend interpolation method.

General Government GOS is equivalent to the value of consumption of fixed capital on general government assets. On an annual basis, general government consumption of fixed capital by industry estimates are produced using the Perpetual Inventory Model (PIM). A linear trend interpolation is applied to these annual estimates to obtain the quarterly estimates.

For more information on the quarterly compilation of General Government GOS, see Table 11.22 Quarterly gross operating surplus-General government.

Quarterly estimates of GMI are obtained by extrapolating the latest quarterly estimates off the latest annual benchmark estimate of GMI. For most industries, the industry UGOP estimate is used as the indicator, however, certain industries use other data sources. These include:

• Value of construction work done from Building Activity Survey as the Construction industry indicator.
• Households final consumption expenditure on medical and dental services as the Health Care and Social Assistance industry indicator.
• Information sourced from ABARES to form the indicator for the Agriculture, Forestry and Fishing industry.