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Benchmarking to supply and use tables

15.8 Of necessity, many independent data sources are used to compile estimates of capital formation: annual and periodic surveys of industries, sub-annual surveys of businesses across industries, Australian Taxation Office data, and ABS Government Finance data, are just some of the sources used. In many cases these collections are undertaken infrequently, so that in some years extrapolations have to be made using less complete data. National accountants also have to transform many of these source data onto a national accounts basis. They also have to make estimates using whatever data are available where no periodic or sub-annual survey or similar data are available. Of necessity, the national accounts make extensive use of methods based on benchmarks from which other indicator data are extrapolated. In a period of comparatively rapid change, extrapolative methods based on assumptions of fixed relationships become less reliable. In these circumstances there is a need to validate or confront the estimates that make up the national accounts.

15.9 The approach undertaken by the ABS, for years from 1994-95, is to confront estimates of final demand, including gross capital formation, with estimates of supply, within supply and use tables. Several improvements to the overall quality of capital formation estimates have resulted from this confrontation process.