1301.0 - Year Book Australia, 2004

ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004

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Contents >> National 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 29.6 and 29.7 show the GDP account in current prices for a number of years between 1965-66 and 2001-02; table 29.6 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.7 shows annual time series from 1994-95 to 2001-02. Table 29.8 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. However, the nine years since the recession in 1990-91 have all shown growth in GDP. Although growth in 1991-92 was relatively low (0.3%), by 1994-95 it had accelerated to 4.2%, a growth rate which has generally been maintained since, except for a slight slowing in 1996-97. GDP growth of 3.9% for 2001-02 signified a return to the general level of growth exhibited throughout the majority of the 1990s after the moderate growth in 2000-01 of 1.8%.

29.6 GDP ACCOUNT, Current prices - Five-yearly intervals
		1965-66	1970-71	1975-76	1980-81	1985-86	1990-91
		$m	$m	$m	$m	$m	$m

Final consumption expenditure
	General government	3,146	5,547	14,715	27,123	49,760	74,663
	Households	13,746	21,515	45,459	84,097	144,502	233,726
	Total	16,892	27,062	60,175	111,220	194,263	308,390
Gross fixed capital formation
	Private	5,082	8,388	13,328	29,256	45,959	67,027
	Public	2,040	2,896	6,582	9,926	19,182	23,238
	Total	7,122	11,284	19,910	39,182	65,141	90,267
Changes in inventories		84	586	180	446	870	-1,366
Gross national expenditure		24,098	38,933	80,265	150,849	260,274	397,291
Exports of goods and services		3,136	5,086	11,225	22,604	38,948	66,259
less Imports of goods and services		3,683	5,214	11,163	25,530	47,199	66,948
Statistical discrepancy (expenditure-based)		-427	-528	-941	-2,280	-3,892	1,279
Gross domestic product		23,124	38,277	79,386	145,643	248,131	397,881
Compensation of employees		11,329	19,320	43,919	75,044	123,434	192,723
Gross operating surplus		5,096	9,175	17,299	36,169	68,337	118,690
Gross mixed income		4,638	6,343	10,704	19,904	28,738	42,545
Total factor income		21,063	34,838	71,922	131,117	220,509	353,958
Taxes less subsidies on production and imports		2,079	3,151	7,895	14,753	27,805	43,407
Statistical discrepancy (income-based)		-18	288	-431	-226	-183	516
Gross domestic product		23,124	38,277	79,386	145,643	248,131	397,881

Source: Australian System of National Accounts (5204.0), 2001-02.

29.7 GDP ACCOUNT, Current prices - Annual intervals
		1994-95	1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01	2001-02
		$m	$m	$m	$m	$m	$m	$m	$m

Final consumption expenditure
	General government	87,736	92,956	96,173	101,332	108,266	114,510	120,989	127,768
	Households	282,870	301,069	314,565	335 102	354,420	374,922	403,875	428,260
	Total	370,606	394,025	410,738	436,434	462,686	489,432	524,864	556,029
Gross fixed capital formation
	Private	84,993	88,029	95,040	108,722	113,721	125,858	118,449	131,782
	Public	24,358	23,571	22,550	20,748	25,278	25,136	25,140	26,631
	Total	109,350	111,600	117,588	129,473	138,999	150,994	143,589	158,413
Changes in inventories		1,393	-813	-10	62	4,662	2,483	-22	621
Gross national expenditure		481,350	504,812	528,316	565,969	606,347	642,909	668,431	715,062
Exports of goods and services		87,654	99,095	105,160	113,744	112,025	126,034	153,511	152,361
less Imports of goods and services		97,654	101,078	103,590	118,482	126,453	140,323	152,636	153,959
Statistical discrepancy (expenditure-based)		-	-	-	-	-	-	-	-484
Gross domestic product		471,348	502,828	529,886	561,229	591,917	628,621	669,307	712,980
Compensation of employees		224,450	241,100	257,968	268,912	286,610	302,385	321,731	338,514
Gross operating surplus		146,011	153,623	162,189	177,700	183,069	197,414	205,782	217,747
Gross mixed income		46,138	49,064	47,969	50,062	52,396	55,510	59,479	67,817
Total factor income		416,599	443,787	468,126	496,674	522,075	555,309	586,992	624,078
Taxes less subsidies on production and imports		54,749	59,041	61,760	64,555	69,842	73,312	82,315	88,305
Statistical discrepancy (income-based)		-	-	-	-	-	-	-	597
Gross domestic product		471,348	502,828	529,886	561,229	591,917	628,621	669,307	712,980

Source: Australian System of National Accounts, 2001-02 (5204.0).

29.8 EXPENDITURE ON GDP, Chain volume measures(a)
		1994-95	1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01	2001-02
		$m	$m	$m	$m	$m	$m	$m	$m

Final consumption expenditure
	General government	99,356	103,381	104,870	108,830	113,236	118,414	120,989	125,012
	Households	321,119	333,321	342,987	359,429	376,757	392,262	403,875	419,271
	Total	420,471	436,698	447,858	468,260	489,994	510,684	524,864	544,283
Gross fixed capital formation
	Private	88,313	91,446	101,010	114,706	118,744	130,833	118,449	130,650
	Public	24,370	23,449	22,868	20,988	25,181	25,202	25,141	26,682
	Total	111,003	113,409	122,227	133,847	143,042	155,542	143,590	157,331
Domestic final demand		533,091	551,288	571,668	603,846	633,956	666,785	668,454	701,614
Changes in inventories		3,118	-272	-808	-37	5,336	2,650	-22	150
Gross national expenditure		533,535	549,979	570,355	602,505	637,839	668,344	668,432	701,764
Exports of goods and services		101,578	111,971	123,707	128,276	130,896	143,132	153,511	150,609
less Imports of goods and services		104,496	108,711	119,505	131,124	137,451	154,606	152,636	156,206
Statistical discrepancy (expenditure-based)		-	-	-	-	-	-	-	-504
Gross domestic product		531,578	554,001	574,989	600,590	632,488	657,771	669,307	695,663

(a) Reference year is 2000-01.

Source: Australian System of National Accounts, 2001-02 (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 29.9 and 29.10 show how the shares of total factor income accruing to wages and to profits have changed since 1965-66. (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 54.2% for 2001-02 it remains below the level recorded for most of the 1970s and early-1980s. In 2001-02 the profits share of total factor income of 23.5% for private and public corporations was slightly below its highest share of 23.9%, which was recorded in both 1993-94 and 1997-98.

Graph - 29.9 Wages share of total factor income

Graph - 29.10 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 29.11 and 29.12 show the income account for a number of years between 1965-66 and 2001-02; table 29.11 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.12 shows annual time series from 1994-95 to 2001-02.

29.11 NATIONAL INCOME ACCOUNT, Current prices - Five-yearly intervals
		1965-66	1970-71	1975-76	1980-81	1985-86	1990-91
		$m	$m	$m	$m	$m	$m

INCOME

Compensation of employees		11,329	19,320	43,919	75,044	123,434	192,723
Gross operating surplus		5,096	9,175	17,299	36,169	68,337	118,690
Gross mixed income		4,638	6,343	10,704	19,904	28,738	42,545
Taxes less subsidies on production and imports		2,079	3,151	7,895	14,753	27,805	43,407
Net primary income from non-residents		-308	-600	-1,202	-2,397	-6,853	-17,224
Gross national income		22,834	37,389	78,615	143,473	241,461	380,141
Net secondary income from non-residents		-90	-110	-287	-441	-384	453
Gross disposable income		22,744	37,279	78,328	143,032	241,077	380,594

USE OF DISPOSABLE INCOME

Final consumption expenditure
	General government	3,146	5,547	14,715	27,123	49,760	74,663
	Households	13,746	21,515	45,459	84,097	144,502	233,726
	Total	16,892	27,062	60,175	111,220	194,263	308,390
Net saving(a)		1,917	3,752	5,980	9,678	7,379	7,826
Consumption of fixed capital		3,933	6,466	12,169	22,134	39,435	64,378
Total use of gross disposable income		22,744	37,279	78,328	143,032	241,077	380,594

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

Source: Australian System of National Accounts, 2001-02 (5204.0).

29.12 NATIONAL INCOME ACCOUNT, Current prices - Annual intervals
		1994-95	1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01	2001-02
		$m	$m	$m	$m	$m	$m	$m	$m

INCOME

Compensation of employees		224,450	241,100	257,968	268,912	286,610	302,385	321,731	338,514
Gross operating surplus		146,011	153,623	162,189	177,700	183,069	197,414	205,782	217,747
Gross mixed income		46,138	49,064	47,969	50,062	52,396	55,510	59,479	67,817
Taxes less subsidies on production and imports		54,749	59,041	61,760	64,555	69,842	73,312	82,315	88,305
Net primary income from non-residents		-18,117	-19,533	-19,151	-18,091	-18,430	-18,150	-19,077	-20,220
Gross national income		453,231	483,295	510,735	543,138	573,487	610,471	650,230	692,163
Net secondary income from non-residents		-323	64	-21	22	-749	218	32	-18
Gross disposable income		452,908	483,359	510,714	543,160	572,738	610,689	650,262	692,146

USE OF DISPOSABLE INCOME

Final consumption expenditure
	General government	87,736	92,956	96,173	101,332	108,266	114,510	120,989	127,768
	Households	282,870	301,069	314,565	335,102	354,420	374,922	403,875	428,260
	Total	370,606	394,025	410,738	436,434	462,686	489,432	524,864	556,029
Net saving(a)		6,063	10,750	19,646	20,654	18,836	23,068	20,471	23,610
Consumption of fixed capital		76,239	78,584	80,330	86,072	91,216	97,821	104,927	112,507
Total use of gross disposable income		452,908	483,359	510,714	543,160	572,738	610,689	650,262	692,146

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

Source: Australian System of National Accounts, 2001-02 (5204.0).

Graph 29.13 shows net saving by institutional sector as a proportion of GDP for the years 1965-66 to 2001-02. Household net saving as a percentage of GDP generally rose between 1965-66 and 1974-75, but has fallen subsequently from its high of 11.1% in 1974-75 to just 0.8% ($5.5b) in 2001-02. General government net saving was negative from 1974-75 to 1996-97 (except for 1988-89 and 1989-90). In 2001-02 it was positive at 1.4% ($9.9b). In 2001-02 net saving of non-financial corporations was 0.5% of GDP ($3.7b). 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 2001-02 net saving of financial corporations was 0.6% of GDP ($4.5b).

Graph - 29.13 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 29.14 and 29.15 show the national capital account for a number of years between 1965-66 and 2001-02; table 29.14 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.15 shows annual time series from 1994-95 to 2001-02.

29.14 NATIONAL CAPITAL ACCOUNT, Current prices - Five-yearly intervals
		1965-66	1970-71	1975-76	1980-81	1985-86	1990-91
		$m	$m	$m	$m	$m	$m

Net saving
	Non-financial corporations	259	320	-1,629	102	1,427	-9,324
	Financial corporations	131	278	733	308	-1,868	4,592
	General government	267	551	-751	-3,174	-9,153	-6,387
	Households	1,260	2,603	7,628	12,456	16,974	18,946
	Total	1,917	3,752	5,980	9,692	7,379	7,826
Consumption of fixed capital		3,933	6,466	12,169	22,134	39,435	64,378
Net capital transfers receivable from non-residents		46	56	-27	167	830	2,071
Gross saving and capital transfers		6,249	10,909	18,862	32,345	47,300	74,276
Gross fixed capital formation
	Private	5,082	8,388	13,328	29,256	45,959	67,027
	Public corporations	951	1,371	2,790	5,584	10,664	12,271
	General government	1,089	1,525	3,792	4,342	8,518	10,967
	Total	7,122	11,284	19,910	39,182	65,141	90,267
Changes in inventories
	Private non-farm	147	366	91	115	882	-1,125
	Farm and public authorities	-63	220	89	331	-12	-241
	Total	84	586	180	446	870	-1,366
Acquisitions less disposals of non-produced non-financial assets		-	-	-	-	-	-7
Statistical discrepancy(a)		-409	-815	-510	-2,053	-3,710	763
Net lending to non-residents		-899	-782	-1,454	-5,597	-14,658	-15,382
Total capital accumulation and net lending		6,249	10,909	18,862	32,345	47,300	74,276

(a) Statistical discrepancy (expenditure-based) less statistical discrepancy (income-based).

Source: Australian System of National Accounts, 2001-02 (5204.0).

29.15 NATIONAL CAPITAL ACCOUNT, Current prices - Annual intervals
		1994-95	1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01	2001-02
		$m	$m	$m	$m	$m	$m	$m	$m

Net saving
	Non-financial corporations	5,082	4,125	1,994	4,253	-721	-3,864	-7,029	3,690
	Financial corporations	3,810	3,073	2,076	4,234	679	3,709	8,547	4,530
	General government	-17,313	-11,738	-2,996	4,082	10,333	15,251	2,976	9,934
	Households	14,484	15,290	18,572	8,085	8,545	7,972	15,977	5,457
	Total	6,063	10,750	19,646	20,654	18,836	23,068	20,471	23,610
Consumption of fixed capital		76,239	78,584	80,330	86,072	91,216	97,821	104,927	112,507
Net capital transfers receivable from non-residents		540	1,045	1,323	1,097	1,186	1,136	1,182	1,120
Gross saving and capital transfers		82,842	90,379	101,299	107,823	111,238	122,393	126,580	137,238
Gross fixed capital formation
	Private	84,993	88,029	95,040	108,722	113,721	125,858	118,449	131,782
	Public corporations	11,864	11,322	9,525	8,013	11,620	9,158	8,967	11,317
	General government	12,494	12,249	13,025	12,735	13,658	15,978	16,173	15,314
	Total	109,350	111,600	117,588	129,473	138,999	150,994	143,589	158,413
Changes in inventories
	Private non-farm	659	-487	2,402	-418	4,675	2,556	550	704
	Farm and public authorities	734	-326	-2,412	480	-13	-73	-572	-83
	Total	1,393	-813	-10	62	4,662	2,483	-22	621
Acquisitions less disposals of non-produced non-financial assets		-32	-25	6	-30	19	83	73	82
Statistical discrepancy(a)		-	-	-	-	-	-	-	-1,081
Net lending to non-residents		-27,868	-20,382	-16,285	-21,680	-32,440	-31,168	-17,061	-20,797
Total capital accumulation and net lending		82,842	90,379	101,299	107,823	111,238	122,393	126,580	137,238

(a) Statistical discrepancy (expenditure-based) less statistical discrepancy (income-based).

Source: Australian System of National Accounts, 2001-02 (5204.0).

Graph 29.16 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, and in the last two years. In 2001-02 investment by non-financial corporations was 9.9% of GDP. Household investment has generally remained at around 9% of GDP and was 9.3% in 2001-02. General government investment as a proportion of GDP peaked at 4.8% in 1975-76. It has generally fallen since then and was 2.1% of GDP in 2001-02. Financial corporations investment peaked in 1988-89 at 1.9% of GDP. It has generally fallen since then and was 0.8% of GDP in 2001-02.

Graph - 29.16 Gross fixed capital information, By sector - Share of GDP

Graph 29.17 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, household lending being 2.4% in 2001-02. Non-financial corporations have been net borrowers over the whole period from 1965-66 to 2001-02, and the amounts borrowed have fluctuated significantly from year to year. As a proportion of GDP, their net borrowing was 1.9% in 2001-02. 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 since then. In 2001-02 financial corporations net lending represented 0.5% of GDP. After recording a record level of borrowing in 1992-93 as a proportion of GDP (6.2%), general government borrowing steadily declined. In 1997-98 the sector became a net lender until 2000-01 when it became a net borrower again. In 2001-02 general government net borrowing represented 0.8% of GDP.

Graph - 29.17 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 International accounts and trade). 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 29.18 and 29.19 show the external account for a number of years between 1965-66 and 2001-02; table 29.18 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.19 shows annual time series from 1994-95 to 2001-02.

29.18 EXTERNAL ACCOUNT, Current prices - Five-yearly intervals
		1965-66	1970-71	1975-76	1980-81	1985-86	1990-91
		$m	$m	$m	$m	$m	$m

Imports of goods and services		3,683	5,214	11,163	25,530	47,199	66,948
Primary income receivable
	Compensation of employees	11	17	44	110	164	429
	Property income	400	760	1,587	3,147	8,879	20,552
	Total	411	777	1,631	3,257	9,043	20,981
Secondary income		169	358	773	1,264	1,797	2,422
Capital transfers to non-residents		40	78	203	320	486	653
Acquisitions less disposals of non-produced non-financial assets		-	-	-	-	-	-7
Net lending		-899	-782	-1,454	-5,597	-14,658	-15,382
Resources provided by non-residents		3,404	5,645	12,316	24,774	43,867	75,615
Exports of goods and services		3,136	5,086	11,225	22,604	38,948	66,259
Primary income payable
	Compensation of employees	10	13	59	119	165	432
	Property income	93	164	370	741	2,025	3,325
	Total	103	177	429	860	2,190	3,757
Secondary income payable		79	248	486	823	1,413	2,875
Capital transfers from non-residents		86	134	176	487	1,316	2,724
Resources provided to non-residents		3,404	5,645	12,316	24,774	43,867	75,615

Source: Australian System of National Accounts, 2001-02 (5204.0).

29.19 EXTERNAL ACCOUNT, Current prices - Annual intervals
		1994-95	1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01	2001-02
		$m	$m	$m	$m	$m	$m	$m	$m

Imports of goods and services		97,654	101,078	103,590	118,482	126,453	140,323	152,636	153,959
Primary income receivable
	Compensation of employees	389	458	539	792	854	963	1,065	1,035
	Property income	24,669	26,215	27,175	27,683	27,864	30,960	34,191	34,098
	Total	25,058	26,673	27,714	28,475	28,718	31,923	35,256	35,133
Secondary income		3,347	3,228	3,561	3,971	5,247	4,407	4,421	4,297
Capital transfers to non-residents		843	907	877	971	1,011	1,199	1,260	1,393
Acquisitions less disposals of non-produced non-financial assets		-32	-25	6	-30	19	83	73	82
Net lending		-27,868	-20,382	-16,285	-21,680	-32,440	-31,168	-17,061	-20,797
Resources provided by non-residents		99,002	111,479	119,463	130,189	129,008	146,705	176,585	174,067
Exports of goods and services		87,654	99,095	105,160	113,744	112,025	126,034	153,511	152,361
Primary income payable
	Compensation of employees	551	610	678	747	797	826	896	909
	Property income	6,390	6,530	7,885	9,637	9,491	12,947	15,283	14,004
	Total	6,941	7,140	8,563	10,384	10,288	13,773	16,179	14,913
Secondary income payable		3,024	3,292	3,540	3,993	4,498	4,625	4,453	4,280
Capital transfers from non-residents		1,383	1,952	2,200	2,068	2,197	2,335	2,442	2,513
Resources provided to non-residents		99,002	111,479	119,463	130,189	129,008	146,705	176,585	174,067

Source: Australian System of National Accounts, 2001-02 (5204.0).

Australia has generally been a net borrower of funds from overseas. In the 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 when Australia was a net lender to non-residents. 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 29.20 shows net lending to non-residents as a proportion of GDP since 1965-66.

Graph - 29.20 Net lending to non-residents, Share of GDP

The importance of foreign trade to the Australian economy is illustrated by graph 29.21, which shows the ratios of exports and imports of goods and services to GDP for the financial years 1965-66 to 2001-02. In 2001-02 the import ratio was 21.6% and the export ratio was 21.4%.