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Alan Hall's comments on Australia's national accounts, in his letter 'A tale of two economies...', published in the AFR of 5 December 2008, could give the misleading impression that the national accounts are being allowed to perform very badly. Nothing could be further from the truth.
The Australian Bureau of Statistics compiles the national accounts according to international standards and the accounts are recognised as being amongst the best in the world. They are widely understood and used by policy makers and analysts in Australia and around the world. The headline measure, following the standards, is the volume of economic production, GDP. This volume measure is calculated by removing the direct impact of price changes.
Changes in relative prices of exports and imports, shown in the terms of trade, do not have a direct impact on the volume measure of GDP, but do impact on incomes. These impacts are shown in the Australian national accounts in the measures of real gross domestic income (RGDI) and real net national disposable income (RNNDI).
All three measures, GDP, RGDI and RNNDI are published quarterly. Mr Hall might have a hard job making his argument if they weren't!
Bronwyn Driscoll
Macroeconomics division
Australian Bureau of Statistics
Canberra ACT
This page first published 7 September 2005, last updated 8 December 2008
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