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Classifying COVID-19 policy interventions during September quarter 2021 in macroeconomic statistics

A summary of the macroeconomic statistics classification of key government COVID-19 policies in place during the September quarter 2021

Released

30/11/2021

Source

Government Finance Statistics, Australia, September 2021

Introduction

The impact of the COVID-19 pandemic continues to drive the largest fiscal response to an event in modern Australian history. The focus of recent policy interventions during the third wave of the pandemic has shifted to targeted economic support for households and businesses in states affected by additional COVID-19 induced lockdowns.

The ABS continues to undertake extensive consultation with stakeholders and subject matter experts to determine appropriate classifications for COVID-19 policy interventions. These classifications are based on well-established conceptual frameworks (footnote 1), which ensure consistent recording of these policies across macroeconomic statistics, particularly in relation to Government Finance Statistics (GFS) and the National Accounts (NA).

Classification of COVID-19 policies

The COVID-19 policies are grouped into five broad categories (footnote 2):

Increased healthcare and frontline services spending
Provision of assistance to households
Provision of assistance to corporations, unincorporated enterprises, and non-profit institutions
Relaxation of tax and non-tax revenue obligations
Capital injections, establishment of new, or extended, lending facilities and provision of guarantees

Key COVID-19 policies impacting September quarter

Government fiscal support through the quarter continued to target healthcare spending and provision of assistance to households, businesses and non-profit institutions.

Since the beginning of the pandemic, spending on social benefits to households in goods and services has increased significantly. Social benefit expenditure in the September quarter was driven by ongoing expansions to Commonwealth social programs and COVID-related supplementary funding for policy areas such as disability and aged care support, state-based jobs and training programs, as well as continued rebates to households for electricity bills.

Spending on subsidies increased in the September quarter, driven by large business support packages in New South Wales and Victoria. These subsidies were targeted at industries and regions that continued to be impacted by lockdowns during the September quarter.

The accelerated roll out of COVID-19 vaccines contributed to growth in government final consumption expenditure. Other health care spending remained elevated due to ongoing COVID-19 health response expenditure on frontline staff and personal protective equipment (PPE).

Table 1 presents a summary of the ABS classification of the key COVID-19 policy interventions in place during September quarter (footnote 3).

Table 1: Classification of COVID-19 policies across Commonwealth and State and Territory levels of government
Types of COVID-19 policies		Examples of policies	Classification in GFS and NA (footnote 4)
Increased healthcare and frontline services spending
	Co-funding arrangements	Commonwealth and state (footnote 5): Co-funding for the JobTrainer Package and COVID-19 vaccine delivery costs	GFS: Current grants NA: Income accounts - Current transfers
	Additional spending on public sector workforce	Commonwealth: Deploying staff for COVID-19 response programs State: Deploying both clinical and non-clinical staff for COVID-19 health response and vaccine delivery in public hospitals and pop-up clinics; Deploying police and other staff to manage quarantine, lockdowns and contact tracing; Vocational education expansion to support economic recovery	GFS: Employee expenses NA: GDP (E) - Government final consumption expenditure, GDP (I) - Compensation of employees
	Additional spending on healthcare consumables	Commonwealth: Expenditure on PPE for the National Medical Stockpile State: PPE expenditure for state-based medical stockpiles	GFS: Accounts receivable (prepayments), Use of goods & services, Change in inventories NA: GDP (E) - Government final consumption expenditure, Change in inventories
	COVID-19 vaccine supply	Commonwealth: Membership of the international COVAX facility and supply agreements with Pfizer, Moderna, AstraZeneca and CSL; Expenditure on vaccine doses when available	GFS: Accounts receivable (prepayments), Social benefits to households in goods and services, Change in inventories NA: GDP (E) - Government final consumption expenditure, Change in inventories
	COVID-19 vaccine delivery outside of hospitals	Commonwealth: New MBS items for administering of vaccines	GFS: Social benefits to households in goods and services NA: GDP (E) - Government final consumption expenditure
	Donated COVID-19 vaccines and PPE for foreign aid purposes	Commonwealth: Foreign aid in the form of vaccines through the COVAX facility, Quad Vaccine Partnership and direct provision of vaccines and PPE to Pacific and Southeast Asia regions	GFS: Current grants to non-residents NA: Income accounts - Current transfers
	Additional spending on contractors and communication	Commonwealth and state: Cleaning of publicly owned assets; COVID-19 communication campaigns; COVID-19 hotlines	GFS: Use of goods & services NA: GDP (E) - Government final consumption expenditure
	New and accelerated infrastructure investment	State: Infrastructure investment as economic stimulus (including Commonwealth co-funding)	GFS: Acquisition of new non-financial assets NA: GPD (E) - Public gross fixed capital formation
Provision of assistance to households
	Cash payments to households	Commonwealth: Economic Support Payments; JobSeeker Payments; National Disaster Payment Scheme; Pandemic Leave Disaster Payment; Fair Entitlements Guarantee; Reducing deeming rates for retirees State: Other state-based hardship payments to households	GFS: Current monetary transfers to households NA: Income accounts - Social assistance benefits
	Additional healthcare services to households outside of hospitals	Commonwealth: Expanded digital health and telehealth services for Medicare; Home Medicines Services for PBS; Provision of free COVID-19 pathology tests	GFS: Social benefits to households in goods and services NA: GDP (E) - Government final consumption expenditure
	Other rebates and support for households	Commonwealth: Additional aged care supplements as well as additional respite and home care packages; Employment support services; Additional NDIS support State: Rebates to households for electricity bills; Other targeted concessions for households; Digital Jobs Program; JobTrainer courses provided through private providers	GFS: Social benefits to households in goods and services NA: GDP (E) - Government final consumption expenditure
	Capital transfers to households	State: First Home Owner Grants for new dwellings	GFS: Capital transfer expenses n.e.c. NA: Capital account - Capital transfers, GPD (E) - Private gross fixed capital formation (Dwellings)
	Current transfers to households	State: Government vouchers for households to support tourism, hospitality and the arts	GFS: Current transfer expenses n.e.c. NA: Income accounts - Other current transfers
Provision of assistance to corporations, unincorporated enterprises and non-profit institutions
	Wage subsidies	Commonwealth: JobMaker Hiring Credit; Wage subsidies for apprentices; Job creation and support funds; Aged care staff retention bonus State: Digital jobs paid internships	GFS: Other subsidies on production NA: GDP (I) - Other subsidies on production
	Cash support payments to eligible producers	State: State-based cash payments to businesses (e.g. Business Support Programs, Circuit Breaker Business Support Fund in Victoria)	GFS: Other subsidies on production NA: GDP (I) - Other subsidies on production
	Targeted industry support for market producers	Commonwealth: Australian Airline Financial Relief Package; Aged Care Support Program; Restart Investment to Sustain and Expand Fund; Temporary Interruption Fund; Australian Screen Production Incentive; Childcare Business Continuity Payments State: Licensed Hospitality Venue Fund Business Continuity Fund, Alpine Resorts Winter Support Program in Victoria, and other state business support programs.	Classifications vary depending on policy details GFS: Other subsidies on production, Subsidies on products NA: GDP (I) - Total subsidies on production, GPD (P) - Subsidies on products
	Targeted industry support for non-market producers	Commonwealth: Medical Research Future Fund; Funding for charities that provide emergency and food relief; Mental health support services; Funding for aeromedical services State: Medical research grants; Funding for charities affected by COVID-19 lockdown; Domestic violence, mental health, and homelessness support services	GFS: Current transfer expenses n.e.c. NA: Income accounts - Other current transfers
Relaxation of tax and non-tax revenue obligations
	Refunds, waivers and deferrals for various taxes, licenses and fees	Commonwealth: Key examples include GST, and commercial broadcasting taxes State: Key examples include payroll, land, liquor, gambling, fishing, and stamp duty related policies	GFS: Sales of goods and services, Various taxes classifications NA: GDP (E) - Government final consumption expenditure, GDP (I) - Total taxes on production, GPD (P) - Taxes on products
	Investment incentives	Commonwealth: Increases and expansions to instant asset write-off policies for businesses	GFS: Company tax NA: Income accounts - Current taxes on income, GPD (E) - Private gross fixed capital formation
Capital injections, establishment of new, or extended, lending facilities and provision of guarantees
	Loan guarantees	Commonwealth: SME Guarantee Scheme; First Home Loan Deposit Scheme State: Loan guarantees for public universities	GFS: Contingent liabilities NA: Not recognised

Footnote

These frameworks are supported by international standards such as the International Monetary Fund (IMF) Government Finance Statistics Manual 2014 (GFSM 2014) and the System of National Accounts 2008 (2008 SNA).
The categories are broadly based on the recommendations in “COVID-19: How to Record Government Policy Interventions in Fiscal Statistics” (IMF, 2020)
Table 1 summarises key policies with an impact on the macroeconomic accounts and does not cover every specific COVID-19 government policy in Australia.
NA includes the gross domestic product (GDP) accounts, which are measured using the expenditure approach (GDP (E)), the income approach (GDP (I)) or the production approach (GDP (P)). NA also includes income accounts, capital accounts, financial accounts and balance sheets.
‘States’ refers to the state sector in macroeconomic statistics which covers all eight state and territory jurisdictions in Australia.

Reference

IMF (2020), "COVID-19: How to Record Government Policy Interventions in Fiscal Statistics", Special Series on Statistical Issues in Response to COVID-19, IMF publication, viewed at https://www.imf.org/en/Publications/SPROLLs/covid19-special-notes

APA

Citation