STATISTICAL OVERVIEW

Balance of payments

The balance on current account for 2006-07 was a deficit of $59.2 billion (b), an increase of $5.3b (10%) on the previous year (table 31.2). The net income deficit rose $7.8b (20%) with an increase in income debits of $15.7b (25%) partly offset by an increase in income credits of $7.9b (32%). The deficit on goods and services was $12.0b, a decrease of $2.5b (17%) on the 2005-06 deficit of $14.5b. The net goods deficit fell by $1.5b (10%) and the net services surplus rose by $1.0b (128%) on the previous year.

The surplus on capital account increased by $0.7b (53%) to $2.1b in 2006-07.

The financial account recorded a net inflow of investment into Australia in 2006-07 of $57.2b. This was largely driven by net portfolio investment of $76.7b balanced by an increase in reserve assets of $20.1b. Net direct investment was largely unchanged, as a result of a significant increase in Australian direct investment abroad being almost totally matched by increased foreign direct investment in Australia in 2006-07.

31.2 BALANCE OF PAYMENTS, Summary
				2002-03	2003-04	2004-05	2005-06	2006-07
				$m	$m	$m	$m	$m
Current account				-38 362	-45 980	-55 479	-53 884	-59 189
	Goods and services			-15 946	-21 509	-22 626	-14 520	-12 033
		Credits		151 790	147 205	167 562	196 274	215 850
		Debits		-167 736	-168 714	-190 188	-210 794	-227 883
		Goods		-18 470	-23 559	-23 006	-15 291	-13 790
			Credits	115 803	109 459	127 867	154 425	169 617
			Debits	-134 273	-133 018	-150 873	-169 716	-183 407
		Services		2 524	2 050	380	771	1 757
			Credits	35 987	37 746	39 695	41 849	46 233
			Debits	-33 463	-35 696	-39 315	-41 078	-44 476
	Income			-22 202	-24 202	-32 407	-38 887	-46 712
		Credits		15 866	17 111	21 127	24 981	32 873
		Debits		-38 068	-41 313	-53 534	-63 868	-79 585
	Current transfers			-214	-269	-446	-477	-444
		Credits		4 233	4 273	4 269	4 313	4 261
		Debits		-4 447	-4 542	-4 715	-4 790	-4 705
Capital and financial account				38 460	45 782	56 353	54 642	59 259
	Capital account			991	1 095	1 212	1 355	2 075
		Capital transfers		1 103	1 167	1 141	1 358	1 589
			Credits	2 404	2 571	2 674	2 673	2 998
			Debits	-1 301	-1 404	-1 533	-1 315	-1 409
		Net acquisition/disposal of non-produced, non-financial assets		-112	-72	71	-3	486
	Financial account			37 469	44 687	55 141	53 286	57 185
		Direct investment		10 739	-15 926	44 949	-14 140	-44
			Abroad	-9 636	-26 225	54 715	-31 920	-35 165
			In Australia	20 375	10 299	-9 766	17 780	35 121
		Portfolio investment		17 498	82 458	4 784	68 251	76 669
		Financial derivatives		-1 036	-2 800	3 461	-578	2 907
		Other investment		15 888	-13 918	10 070	5 359	-2 221
		Reserve assets		-5 620	-5 127	-8 123	-5 605	-20 127
Net errors and omissions				-98	198	-874	-758	-70
Source: Balance of Payments and International Investment Position, Australia (5302.0).

Graph 31.3 shows the differing influences of the balance on goods and services (trade balance) and the net income deficit on the balance on current account. The net income deficit rose from $12.7b in 1992-93 to $46.7b in 2006-07. The underlying level of net income drives the level and direction of the current account deficit, as Australia continues to service its external liabilities. The trade deficit increased from $2.1b in 1992-93 to $12.0b in 2006-07 but fluctuated quite significantly over this period.

Ratios

The ratio of the current account deficit to gross domestic product (GDP) was 5.8% in 2006-07, an increase on the previous year (table 31.4).

31.4 RATIOS
			2002-03	2003-04	2004-05	2005-06	2006-07
			%	%	%	%	%
To GDP
	Current account		-4.9	-5.5	-6.2	-5.6	-5.8
	Goods and services		-2.0	-2.6	-2.5	-1.5	-1.2
		Credits	19.4	17.5	18.7	20.3	21.1
		Debits	-21.5	-20.1	-21.2	-21.8	-22.2
	Income		-2.8	-2.9	-3.6	-4.0	-4.6
	Net international investment position(a)		53.2	53.9	56.4	57.2	62.7
		Net foreign equity	7.5	7.6	8.4	5.4	9.6
		Net foreign debt	45.7	46.4	48.0	51.8	53.1
To goods and services credits
	Net investment income		-14.3	-15.6	-19.0	-19.1	-20.7
		Net foreign equity	-6.7	-7.1	-9.8	-9.9	-9.7
		Net foreign debt	-7.7	-8.5	-9.2	-9.2	-11.0
(a) These ratios are derived by expressing net foreign liabilities at end of year as a percentage of GDP at current prices for that year.
Source: Balance of Payments and International Investment Position, Australia (5302.0).

Exchange rates

Graph 31.5 shows movements in the annual average exchange rates for the major four currencies.

International trade in goods and services (balance of payments basis)

Australia's international trade in goods and services (chain volume measures) for the five years to 2006-07 is shown in table 31.6.

Chain volume measures of exports and imports remove the effects of price changes. They provide measures, in dollar values, which indicate changes in the actual volume of exports and imports.

The chain volume measures of Australia's exports of goods and services increased by $6.6b (4%), and Australia's imports of goods and services increased by $19.4b (10%) between 2005-06 and 2006-07. In comparison, the current price value of those exports, which incorporates both volume and price changes, increased by $19.6b (10%) (table 31.2). This indicates that, on average, the prices of Australia's exports increased more rapidly than their volumes over the period.Table 31.6 also presents various price indexes for Australia's trade in goods and services. The implicit price deflators (IPDs) are derived by dividing the current price measures (table 31.2) by the corresponding chain volume measures. These IPDs reflect not only price change, but also compositional effects from year to year.

Australia's terms of trade, which is a measure of the purchasing power of its exports over imported goods and services (derived by dividing the IPD for credits by the IPD for debits) rose by 7.2% to 118.9 in 2006-07, reflecting a 5.8% rise in the IPD for goods and services credits and a 1.4% fall in the IPD for goods and services debits.

31.6 CHAIN VOLUME MEASURES, Implicit price deflators and terms of trade(a)
					2002-03	2003-04	2004-05	2005-06	2006-07
Chain volume measures
	Goods and services			$m	9 158	-7 009	-22 627	-32 674	-45 458
		Goods and services credits		$m	159 183	162 583	167 562	171 275	177 884
			Goods credits	$m	122 663	124 155	127 867	130 836	134 695
			Services credits	$m	37 785	38 886	39 695	40 438	43 188
		Goods and services debits		$m	-150 025	-169 591	-190 188	-203 947	-223 341
			Goods debits	$m	-119 554	-133 527	-150 874	-163 500	-179 683
			Services debits	$m	-30 404	-36 017	-39 314	-40 447	-43 657
Implicit price deflators
	Goods and services credits			index	95.4	90.5	100.0	114.6	121.3
		Goods credits		index	94.4	88.2	100.0	118.0	125.9
		Services credits		index	95.2	97.1	100.0	103.5	107.0
	Goods and services debits			index	111.8	99.5	100.0	103.4	102.0
		Goods debits		index	112.3	99.6	100.0	103.8	102.1
		Services debits		index	110.1	99.1	100.0	101.5	101.9
Terms of trade
	Goods and services			index	85.3	91.0	100.0	110.9	118.9
		Goods		index	84.1	88.5	100.0	113.7	123.4
		Services		index	86.5	97.9	100.0	101.9	105.1
(a) Reference yeat for chain volume measures, price and terms of trade indexes is 2004–05.
Source: Balance of Payments and International Investment Position, Australia (5302.0).

International trade in goods by commodity (merchandise trade basis)

In 2006-07 Australia's imports of goods were worth more than goods exported. This resulted in a $12.6b deficit. However, as the value of exports grew faster than imports, the deficit in 2006-07 was less than 2005-06 when there was a record deficit of $15.0b.

Graph 31.7 shows the top ten commodity exports in 2006-07. In 2006-07 total exports of goods increased by $15.7b (10%) to $168.2b. The largest increases were:

• Gold, non-monetary, up $3.3b (46%)
• Iron ore and concentrates, up $2.6b (21%)
• Crude petroleum oils, up $1.6b (27%)
• Ores and concentrates of base metals, up $1.3b (42%).

Graph 31.8 shows the top ten commodity imports in 2006-07. In 2006-07 total imports of goods increased by $13.3b (8%) to $180.8b. The largest increases were:

• Passenger motor vehicles, up $1.2b (10%)
• Motor vehicles for the transport of goods, up $0.9b (21%)
• Pumps for gas, up $0.8b (53%)
• Automatic data processing machines, up $0.7b (12%).

International trade in goods by country (merchandise trade basis)

For exports, country refers to the country to which the goods were consigned at the time of export. For imports, country refers to the country of origin of the goods, that is, where the majority of processing of the goods took place. Table 31.9 shows merchandise exports to Australia's ten main destinations; table 31.10 shows merchandise imports from the ten main countries of origin, in 2006-07.

In 2006-07 Australia recorded a merchandise trade deficit of $12.6b. The following major trading partners were the main contributors to the overall deficit:

• United States of America - trade deficit of $15.1b, an increase of $2.1b on the previous year's deficit largely due to a $2.2b increase in imports. The main commodities contributing to the increase in imports were office machines and automatic data processing machines (up $0.4b), miscellaneous manufactured articles, n.e.s. (up $0.4b) and road vehicles (up $0.3b).
• Germany - trade deficit of $7.8b, an increase on the previous year's deficit due to a $0.6b increase in imports. The main commodity contributing to the increase in imports from Germany was road vehicles (up $0.4b).
• Singapore - trade deficit of $5.5b, a decrease of $0.8b on the previous year's deficit due to $0.4b increase in exports and a $0.4b decrease in imports. The main commodities contributing to the increase in exports were petroleum products and related materials (up $0.3b) and non-monetary gold (up $0.2b). These same commodities also contributed to the decrease in imports with petroleum products and related materials (down $0.4b) and non-monetary gold (down $0.2b).
• China - trade deficit of $4.3b, a decrease of $0.8b on the previous year’s deficit due to a $4.7b increase in exports partly offset by a $3.9b increase in imports. The main commodities contributing to the increase in exports were metalliferous ores and metal scrap (up $2.0b) and non ferrous metals (up $0.3b). The commodities with the largest increase in imports were telecommunications and sound recording and reproducing apparatus and equipment (up $0.6b) and miscellaneous manufactured articles, n.e.s. (up $0.4b).

In 2006-07 Australia recorded a merchandise trade surplus with a number of countries, the largest of which were:

• Japan - trade surplus of $15.2b, up $1.5b due to a $1.5b increase in exports. Contributing to the increase in exports were metalliferous ores and metal scrap (up $1.0b) and non ferrous metals (up $0.7b).
• India - trade surplus of $8.8b, up $2.6b due to a $2.7b increase in exports. Contributing to the increase in exports were non-monetary gold (up $2.0b), metalliferous ores and metal scrap (up $0.2b) and non-ferrous metals (up $0.2b).

31.9 MERCHANDISE EXPORTS, Major countries of destination - 2006-07
	Value	Share of total exports	Average annual change(a)
	$m	%	%
Japan	32 627	19.4	7.4
China	22 845	13.6	23.9
Korea, Republic of (South)	13 071	7.8	5.9
India	10 099	6.0	32.0
United States of America	9 821	5.8	-3.9
New Zealand	9 453	5.6	4.3
Taiwan	6 192	3.7	5.1
United Kingdom	6 160	3.7	3.4
Singapore	4 625	2.7	-1.3
Thailand	4 260	2.5	13.2
(a) In the 5-year period 2001-02 to 2006-07.
Source: International Trade in Goods and Services, Australia (5368.0).

31.10 MERCHANDISE IMPORTS, Major countries of origin - 2006-07
	Value	Share of total imports	Average annual change(a)
	$m	%	%
China	27 138	15.0	19.2
United States of America	24 927	13.8	3.0
Japan	17 409	9.6	2.4
Singapore	10 135	5.6	20.6
Germany	9 274	5.1	6.6
United Kingdom	7 402	4.1	3.5
Thailand	7 210	4.0	20.1
Malaysia	6 625	3.7	11.4
Korea, Republic of (South)	6 010	3.3	4.9
New Zealand	5 605	3.1	3.4
(a) In the 5-year period 2001-02 to 2006-07.
Source: International Trade in Goods and Services, Australia (5368.0).

International trade in services

Table 31.11 provides details of Australia's international trade in services, by service type.

During the period 2002-03 to 2006-07 Australia recorded small annual surpluses on its international trade in services. In 2006-07 exports of $46.2b were largely matched by imports $44.5b to give a surplus of $1.8b. The major contributors to services exports in 2006-07 were personal travel services, of which around half were education-related, passenger transportation services and miscellaneous business, professional and technical services. The major contributors to services imports were personal travel services, freight services, passenger transportation services, royalties and licence fees and miscellaneous business, professional and technical services.

31.11 INTERNATIONAL TRADE IN SERVICES, By service type
		2002-03	2003-04	2004-05	2005-06	2006-07
		$m	$m	$m	$m	$m
EXPORTS
Transportation services		7 386	7 530	8 002	8 208	8 763
	Passenger(a)	6 538	6 772	7 298	7 600	8 146
	Freight	848	758	704	608	617
	Other(a)	np	np	np	np	np
Travel services		18 312	20 099	21 440	22 624	25 220
	Business	1 584	1 850	1 725	2 085	2 464
	Personal	16 728	18 249	19 715	20 539	22 756
Communications services(b)		1 037	876	831	834	815
Construction services		105	104	106	134	144
Insurance services		673	686	684	704	704
Financial services		984	1 015	998	1 002	1 004
Computer and information services		1 160	1 218	1 251	1 198	1 475
Royalties and licence fees		661	669	706	772	894
Other business services		4 115	4 057	4 263	4 840	5 763
	Merchanting and other trade-related	514	637	653	729	785
	Operational leasing	27	23	19	35	40
	Miscellaneous business, professional and technical	3 574	3 397	3 591	4 076	4 938
Personal, cultural and recreational		752	657	547	659	603
Government services n.e.i.		802	835	867	874	848
Total		35 987	37 746	39 695	41 849	46 233
IMPORTS
Transportation services		-10 960	-11 970	-13 796	-14 508	-15 555
	Passenger	-4 248	-5 126	-5 420	-5 939	-6 714
	Freight	-5 808	-6 056	-7 500	-7 776	-8 044
	Other	-904	-788	-876	-793	-797
Travel services		-10 978	-12 527	-14 507	-15 090	-15 947
	Business	-2 283	-2 422	-2 472	-2 512	-2 630
	Personal	-8 695	-10 105	-12 035	-12 578	-13 317
Communication services(b)		-1 495	-1 067	-842	-829	-860
Construction services		-	-	-	-	-
Insurance services		-856	-874	-872	-900	-900
Financial services		-581	-540	-527	-581	-600
Computer and information services		-1 031	-1 053	-1 095	-1 067	-1 472
Royalties and licence fees		-2 151	-2 361	-2 482	-2 734	-3 249
Other business services		-3 793	-3 564	-3 314	-3 488	-3 978
	Merchanting and other trade-related	-344	-178	-200	-188	-207
	Operational leasing	-955	-916	-698	-769	-841
	Miscellaneous business, professional and technical	-2 494	-2 470	-2 416	-2 531	-2 930
Personal, cultural and recreational services		-934	-984	-1 120	-1 080	-1 067
Government services n.e.i.		-684	-756	-760	-801	-848
Total		-33 463	-35 696	-39 315	-41 078	-44 476
- nil or rounded to zero (including null cells)
np not available for publication but included in totals where applicable, unless otherwise indicated
(a) Passenger transportation exports includes other transportation services.
(b) Communication services includes other services n.e.i..
Source: Balance of Payments and International Investment Position, Australia (5302.0).

Tables 31.12 and 31.13 show Australia's main trading partners for exports and imports of services in 2005-06.

31.12 SERVICES EXPORTS, Major countries of destination - 2005-06
	Value	Share of total exports	Average annual change(a)
	$m	%	%
United States of America	5 286	12.6	-3.1
United Kingdom	4 356	10.4	2.2
Japan	3 184	7.6	-3.8
China	3 169	7.6	25.2
New Zealand	3 006	7.2	5.9
Singapore	2 684	6.4	4.1
Hong Kong  (SAR of China)	1 574	3.8	3.5
Korea	1 451	3.5	9.0
India	1 401	3.3	21.8
Malaysia	1 201	2.9	5.9
(a) In the 5-year period 2000-01 to 2005-06.
Source: International Trade in Services by Country, by State and by Detailed Services Category, Financial Year (5368.0.55.003).

31.13 SERVICES IMPORTS, Major countries of origin - 2005-06
	Value	Share of total imports	Average annual change(a)
	$m	%	%
United States of America	7 071	17.2	0.9
United Kingdom	4 004	9.7	0.3
Singapore	3 942	9.6	12.1
Japan	2 140	5.2	-0.3
New Zealand	2 111	5.1	2.5
Hong Kong  (SAR of China)	1 618	3.9	1.4
Germany	1 282	3.1	2.1
China	1 122	2.7	8.5
Thailand	1 055	2.6	8.6
Switzerland	834	2.0	-2.9
(a) In the 5-year period 2000-01 to 2005-06.
Source: International Trade in Services, by Country, by State and by Detailed Services Category, Financial Year (5368.0.55.003).

In 2005-06 Australia recorded a deficit on its trade in services with its major services trading partner, the United States of America, and a small surplus with the United Kingdom. Deficits were recorded for most European trading partners, while surpluses were recorded with a number of Asian trading partners, most notably China and Japan.International investment position

Australia's net international investment position is the difference between the levels of Australia's foreign financial liabilities and the levels of its foreign financial assets. Historically, Australia has had a net liability position with the rest of the world.

Graph 31.14 shows the components of Australia's international investment position, indicating that the growth in Australia's net international liabilities between 30 June 1997 and 30 June 2007 is mostly due to a rise in Australia's net foreign debt. At 30 June 2007 Australia's net foreign liabilities of $642.4b were comprised of net foreign debt of $544.1b and net foreign equity of $98.4b.

Table 31.15 provides a reconciliation between opening and closing levels for foreign financial assets, foreign financial liabilities and Australia's net international investment position for the past three financial years. Increases and decreases in these assets and liabilities are due to financial transactions (investment flows), price changes, exchange rate changes and other adjustments.

31.15 INTERNATIONAL INVESTMENT POSITION
		Position at beginning of period	Changes in position reflecting - transactions	Changes in position reflecting - price changes	Changes in position reflecting - exchange rate changes	Changes in position reflecting - other adjustments	Position at end of period
		$m	$m	$m	$m	$m	$m
NET INTERNATIONAL INVESTMENT POSITION
Total
	2004-05	453 326	55 141	-10 170	7 614	-233	505 678
	2005-06	505 678	53 286	-16 414	11 357	-1 336	552 571
	2006-07	552 571	57 185	17 603	14 377	704	642 438
Equity
	2004-05	63 840	-7 689	-4 687	23 940	-17	75 386
	2005-06	75 386	-20 245	356	-4 541	836	51 792
	2006-07	51 792	-486	18 161	29 412	-515	98 364
Debt
	2004-05	389 487	62 830	-5 483	-16 327	-216	430 291
	2005-06	430 291	73 531	-16 769	15 898	-2 172	500 779
	2006-07	500 779	57 671	-558	-15 035	1 219	544 075
FOREIGN ASSETS(a)
Total
	2004-05	-638 398	42 999	-56 683	16 849	-44	-635 276
	2005-06	-635 276	-89 764	-66 769	-7 920	265	-799 464
	2006-07	-799 464	-126 260	-61 933	25 585	756	-961 316
Equity
	2004-05	-370 749	44 958	-48 546	23 940	695	-349 700
	2005-06	-349 700	-53 719	-47 178	-4 541	84	-455 053
	2006-07	-455 053	-57 030	-50 681	29 412	-54	-533 406
Debt
	2004-05	-267 649	-1 959	-8 138	-7 091	-739	-285 576
	2005-06	-285 576	-36 044	-19 592	-3 380	180	-344 412
	2006-07	-344 412	-69 229	-11 251	-3 826	810	-427 910
FOREIGN LIABILITIES(b)
Total
	2004-05	1 091 724	12 142	46 513	-9 235	-189	1 140 954
	2005-06	1 140 954	143 049	50 355	19 278	-1 601	1 352 035
	2006-07	1 352 035	183 445	79 536	-11 208	-52	1 603 755
Equity
	2004-05	434 589	-52 647	43 858	-	-713	425 086
	2005-06	425 086	33 474	47 534	-	753	506 845
	2006-07	506 845	56 544	68 842	-	-461	631 770
Debt
	2004-05	657 135	64 790	2 654	-9 235	522	715 867
	2005-06	715 867	109 577	2 822	19 278	-2 353	845 190
	2006-07	845 190	126 900	10 693	-11 208	409	971 984
- nil or rounded to zero (including null cells)
(a) Assets include claims of Australian direct investment enterprises on direct investors abroad, which are classified as part of direct investment in Australia.
(b) Liabilities include liabilities of Australian direct investors to direct investment enterprises abroad, which are classified as part of direct investment abroad.
Source: Balance of Payments and International Investment Position, Australia (5302.0).

Foreign debt

Australia's foreign debt liabilities include borrowing from non-residents and other non-equity liabilities to non-residents such as derivatives positions with a negative market value. Foreign debt assets include lending to non-residents and other non-equity assets such as derivatives positions with a positive market value. The majority of public sector debt assets are held by the Reserve Bank of Australia as reserve assets.

Table 31.16 shows foreign debt assets and liabilities and net foreign debt attributable to the public sector (general government plus public financial and non-financial corporations) versus the private sector. At 30 June 2007 the public sector was in a small net debt asset position with non-residents. Of total private sector net foreign debt of $559.1b at 30 June 2007, private financial corporations accounted for $456.0b and private non-financial corporations accounted for $103.1b.

31.16 LEVELS OF FOREIGN DEBT - 30 June
		2003	2004	2005	2006	2007
		$m	$m	$m	$m	$m
Foreign debt assets(a)		-225 657	-267 649	-285 576	-344 412	-427 910
	Public sector	-55 337	-66 395	-73 023	-82 725	-96 975
	Private sector	-170 320	-201 254	-212 553	-261 687	-330 935
Foreign debt liabilities(a)		582 651	657 135	715 867	845 190	971 984
	Public sector	63 576	71 470	83 606	88 210	81 912
	Private sector	519 075	585 665	632 261	756 980	890 073
Net foreign debt		356 995	389 487	430 291	500 779	544 075
	Public sector	8 240	5 075	10 583	5 485	-15 063
	Private sector	348 755	384 411	419 708	495 293	559 138
(a) Foreign debt levels between direct investors and direct investment enterprises are recorded on a gross basis for assets and liabilities.
Source: Balance of Payments and International Investment Position, Australia (5302.0).

Levels of foreign investment in Australia and Australian investment abroad

In table 31.17, levels of investment are categorised by direction (Australian investment abroad and foreign investment in Australia) and functional category (direct, portfolio, financial derivatives, other and reserve assets).

Direct investment is a category of international investment that reflects the objective of obtaining a lasting interest by a resident in one economy in an enterprise in another economy, and implies a significant degree of influence by the investor in the management of the enterprise. A foreign direct investment relationship is established when an investor, who is a resident in one economy, holds 10% or more of the ordinary shares or voting stock of an enterprise (direct investment enterprise) in another economy. The portfolio investment category covers investment in equity where the investor holds less than 10% of the ordinary shares or voting stock of an enterprise and investment in debt securities. The remaining categories are financial derivatives, other investment and reserve assets (in the case of Australian investment abroad).

31.17 LEVELS OF AUSTRALIAN INVESTMENT ABROAD AND FOREIGN INVESTMENT IN AUSTRALIA - 30 June
		2003	2004	2005	2006	2007
		$m	$m	$m	$m	$m
Levels of Australian investment abroad		-502 663	-608 327	-606 159	-768 206	-923 276
	Direct investment abroad(a)	-189 590	-232 047	-201 395	-274 304	-318 752
	Portfolio investment assets	-160 685	-199 132	-223 021	-280 653	-343 468
	Financial derivative assets	-40 735	-42 058	-38 790	-46 300	-56 717
	Other investment assets	-70 894	-84 748	-86 784	-103 134	-124 657
	Reserve assets	-40 760	-50 342	-56 170	-63 815	-79 682
Levels of foreign investment in Australia		918 568	1 061 653	1 111 837	1 320 776	1 565 715
	Direct investment in Australia(b)	252 561	274 082	271 698	289 934	331 398
	Portfolio investment liabilities	481 212	609 272	651 876	820 912	982 275
	Financial derivative liabilities	45 251	37 683	42 009	40 999	67 638
	Other investment liabilities	139 544	140 616	146 254	168 931	184 404
(a) Net direct investment abroad, after deduction of liabilities to direct investment enterprises abroad.
(b) Net direct investment in Australia, after deduction of claims of Australian direct investment enterprises on direct investors.
Source: Balance of Payments and International Investment Position, Australia (5302.0).

The level of Australian investment abroad rose $155.1b over 2006-07, while the level of foreign investment in Australia rose $244.9b over the same period. The difference largely mirrors the increase in net foreign liabilities (table 31.15). However, the items 'Australian investment abroad' and 'Foreign investment in Australia', in table 31.17, do not equate exactly with foreign assets and liabilities respectively, in table 31.15. The difference is due to netting of assets and liabilities in regard to direct investment, both abroad and in Australia. In table 31.17, debt claims by direct investment enterprises on their direct investors are netted off against liabilities to direct investors (footnotes (a) and (b)). These items are not netted off in table 31.15. Foreign ownership of equity in Australia

Table 31.18 shows the proportion of equity in Australian enterprise groups held by non-residents.

The total value of equity on issue by Australian enterprise groups at 30 June 2007 was $2,195b, of which non-residents held 29% and residents held 71%. As a percentage, foreign ownership of Australian equity has remained reasonably steady over the four-year period to 30 June 2007.

The major issuers of equity capital are non-financial corporations and banks, accounting for 65% and 14% respectively of the total equity issued by Australian enterprise groups in at 30 June 2007. Non-residents held 32% of the equity issued by non-financial corporations and 24% of the equity issued by banks.

31.18 FOREIGN OWNERSHIP OF EQUITY(a), By sectoral components - 30 June
			2003	2004	2005	2006	2007
Non-financial corporations(b)
	Amount issued(c)	$b	774.0	881.1	938.9	1 134.8	1 420.6
	Amount held by rest of world	$b	275.0	332.7	305.8	369.2	458.5
	Proportion of foreign ownership	%	35.5	37.8	32.6	32.5	32.3
Banks
	Amount issued(c)	$b	180.9	189.2	223.5	261.4	316.0
	Amount held by rest of world	$b	46.8	48.6	55.2	62.3	75.6
	Proportion of foreign ownership	%	25.9	25.7	24.7	23.8	23.9
Non-bank deposit taking institutions
	Amount issued(c)	$b	34.2	30.8	33.2	35.7	38.7
	Amount held by rest of world	$b	7.4	12.5	13.6	14.0	15.4
	Proportion of foreign ownership	%	21.7	40.4	41.1	39.3	39.8
Other financial enterprises(d)
	Amount issued(c)	$b	200.5	221.1	255.1	310.2	410.4
	Amount held by rest of world	$b	33.8	40.9	50.4	61.4	82.3
	Proportion of foreign ownership	%	16.9	18.5	19.8	19.8	20.0
Central Bank
	Amount issued(e)(f)	$b	11.7	12.5	11.2	12.7	9.7
Total amount issued		$b	1 201.3	1 334.8	1 461.9	1 754.8	2 195.4
Total amount held by rest of world		$b	363.0	434.6	425.1	506.8	631.8
Proportion of foreign ownership		%	30.2	32.6	29.1	28.9	28.8
(a) Equity includes units in trusts.
(b) Includes private non-financial corporations, and Commonwealth, state and local public non-financial corporations.
(c) These estimated market values are considered to be of poor quality. They should be used cautiously.
(d) Includes life offices and superannuation funds, central borrowing authorities, and other financial enterprises.
(e) Net asset values.
(f) There is no foreign ownership in this component.
Source: Australian National Accounts: Financial Accounts (5232.0); Balance of Payments and International Investment Position, Australia (5302.0).

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