EXPLANATORY NOTES
INTRODUCTION
1 This publication contains detailed national accounts estimates for the latest nine financial years. Estimates are provided for gross domestic product (GDP) and its components, the national income account, the national capital account, the national financial account and the national balance sheet. Income, capital and financial accounts and a balance sheet are provided for each sector of the economy. Also provided is a range of information classified by industry, details of capital formation (including capital stocks) and productivity statistics. For a list of the statistics included in this publication, see List of Electronic Tables. For information about the conceptual framework of the national accounts and about the structure of the Australian system of national accounts, see The Australian National Accounts. For a list of other sources of national accounts information, see Index of Feature Articles. For brief definitions and description of items in the national accounts, see Glossary.
CONCEPTS, SOURCES AND METHODS
2 Australia's national accounts statistics are compiled in accordance with international standards contained in the System of National Accounts, 1993 (SNA93). Australia's application of these standards is described in Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0). This publication outlines major concepts and definitions, describes sources of data and methods used to derive annual and quarterly estimates for major aggregates at current prices and in chain volume terms, and discusses the accuracy and reliability of the national accounts. In addition, it includes documentation on input-output tables, financial accounts, capital stock, productivity measures, balance sheets, and state accounts.
3 While national estimates are based on the concepts and conventions embodied in SNA93, no such standard is available for sub-national (regional/state) accounts. In the main, the national concepts are applicable to state accounts, but there remain a number of conceptual and measurement issues that either do not apply or are insignificant at the national level. Information on some of the more important conceptual, methodological and data issues relating to annual and quarterly estimates by state is provided in Chapter 28 of cat. no. 5216.0.
GROSS DOMESTIC PRODUCT (GDP)
4 GDP can be derived by three broad approaches: the income approach (I), the expenditure approach (E) and the production approach (P). A description of each approach is provided in the following paragraphs. While each measure should, conceptually, deliver the same estimate of GDP, if the three measures are compiled independently using different data sources then different estimates of GDP result. However, the Australian national accounts estimates have been integrated with annual balanced supply and use tables. These tables have been compiled from 1994-95, up to the year preceding the latest complete financial year. As integration with balanced supply and use tables ensures that the same estimate of GDP is obtained from the three approaches, annual estimates using the I, E and P approaches are identical for the years for which these tables are available.
5 Prior to 1994-95 the estimates using each approach are based on independent sources, and there are usually differences between the I, E and P estimates. Nevertheless, for these periods, a single estimate of GDP has been compiled. In chain volume terms, GDP is derived by averaging the chain volume estimates obtained from each of the three independent approaches. The current price estimate of GDP is obtained by reflating the average chain volume estimate by the implicit price deflator derived from the expenditure-based estimates.
6 As a result of the above methods:
- There is no statistical discrepancy for annual estimates from 1994-95 up to the year prior to the latest complete financial year, in either current price or volume terms
- For years prior to 1994-95, and the latest year, statistical discrepancies exist between estimates based on the I, E and P approaches and the single estimate of GDP, in both current prices and volume terms. These discrepancies are shown in the relevant tables.
Income approach (I)
7 GDP using the income approach is derived as the sum of factor incomes, consumption of fixed capital (depreciation) and taxes less subsidies on production and imports. Volume estimates are derived by deflating current price estimates by the implicit price deflator from the expenditure approach.
Expenditure approach (E)
8 GDP using the expenditure approach is derived as the sum of all final expenditures, changes in inventories and exports of goods and services less imports of goods and services. Volume estimates are derived for each of the components as well as for their sum.
Production approach (P)
9 GDP using the production approach is derived as the sum of gross value added for each industry, at basic prices, plus taxes less subsidies on products. Basic values represent the amounts received by producers, including the value of any subsidies on products, but before any taxes on products. The difference between the sum over all industries of gross value added at basic prices, and GDP at market (or purchasers) prices, is the value of taxes less subsidies on products.
FINANCIAL INTERMEDIATION SERVICES
10 In the national accounts, estimates are made for the output of banks and similar institutions who produce services through the provision of deposit and loan services. Often there is no single explicit charge for these services and instead the relevant financial institutions set interest rates such that a service margin can be earned. Thus, interest rates on loans are higher than would otherwise be the case if there were no service element provided and interest rates on deposits are lower than would otherwise be the case.
11 In order to appropriately account for this service component the output produced by these financial institutions is shown as being consumed by other units - households, non-financial corporations and government units. In the sector income accounts the effect of allocating the output to consuming sectors is that part of the interest flow is deemed a payment of service and the balance is shown as interest such that the net effect on saving is zero.
12 In interpreting the income accounts it is therefore necessary to regard the interest flow series as being a flow without a service element - i.e. a pure interest flow. In the case of loans the interest flow that is shown will be less than the observed interest payment made to the financial institution. In the case of deposits the interest flow that is shown will be greater than the observed interest payment made by the financial institution. For further information users should consult Chapter 22 of the Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).
INDUSTRY CLASSIFICATION
13 The industry statistics in this publication are based on the Australian and New Zealand Standard Industrial Classification (ANZSIC) (cat. no. 1292.0).
RELIABILITY AND FUTURE REVISIONS
14 National accounts estimates are prepared from a wide range of statistical sources, some of which are available quickly and some only with a delay of several years. Some are closely related to the desired national accounting basis, but others are not completely satisfactory in various respects, including coverage, concepts and timing. Most of the basic data derive from the general system of statistical surveys or as a by-product of government administrative processes. The frequency, detail and timeliness of these data sources are constrained by many factors, including the other purposes which they must serve. Any increase in timeliness of data is usually at the expense of detail, reliability or additional resources. Therefore, estimates for recent years may be subject to considerable revision as firmer data become available.
OTHER NATIONAL ACCOUNTS STATISTICAL PUBLICATIONS
15 This publication is part of a regular sequence of national accounts publications. The key national accounts publication is the quarterly national accounts released as Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) every three months approximately two months after the end of the reference period. The first estimates of national accounts for a particular financial year are released in the June quarter issue of cat. no. 5206.0, generally released in early September.
16 State estimates are compiled on a quarterly basis for the aggregate state final demand and its components. These results are published in cat. no. 5206.0. On an annual basis estimates of gross state product (GSP) and other relevant state data are made for each state and territory. These are released in the publication Australian National Accounts: State Accounts (cat. no. 5220.0) shortly after the release of this publication and are fully consistent with the Australian level estimates contained in this publication.
17 Input-output tables are compiled periodically. Input-output tables for 1998-99, consistent with the 1998-99 estimates for income, expenditure and production shown in the 2002-03 issue of this publication, are available in Australian National Accounts: Input Output Tables 1998-99 (cat. no. 5209.0.55.001). Related to this release is the detailed commodity information contained in Australian National Accounts: Input-Output Tables (Product Details) (cat. no. 5215.0.55.001). As part of the input-output framework for compiling a set of national accounts, supply and use (S-U) tables are also compiled. S-U tables, in both current prices and in the prices of the previous year, are compiled annually and are available on request.
18 Tourism satellite accounts, which estimate the contribution of tourism to the Australian economy, are compiled annually. They are released in the publication Australian National Accounts: Tourism Satellite Account (cat. no. 5249.0), around 6 months after the release of cat. no. 5204.0, and are fully consistent with the estimates contained in cat. no. 5204.0.
OTHER SOURCES OF NATIONAL ACCOUNTS INFORMATION
19 Most commonly national accounts information (in the form of feature articles and technical notes) is released in either the quarterly publication or this annual publication. Where there is wider interest, other publication vehicles are used, including information papers, occasional papers, and the compendium publications Australian Economic Indicators (cat. no. 1350.0) and Year Book Australia (cat. no. 1301.0). A full listing of feature articles published since December 1988, together with a listing of all occasional and information papers, is included in the Index of Feature Articles.
20 A National Accounts page is available on the ABS web site. This page provides direct links to all national accounts related data and publications, recent national accounts changes and forthcoming events, links to relevant web sites and a range of other information about the Australian National Accounts.
OTHER ABS PUBLICATIONS
21 Current publications and other products released by the ABS are listed in the Catalogue of Publications and Products (cat. no. 1101.0). The ABS also issues a daily Release Advice on the web site which details products to be released in the week ahead.
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