1301.0 - Year Book Australia, 2005

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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 2002-03 - table 29.6 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.7 shows annual time series from 1995-96 to 2002-03. 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. Since the recession in 1990-91, GDP has grown in each year. Although growth in 1991-92 was relatively low (0.3%), by 1995-96 it had accelerated to 4.2%, a growth rate which was generally maintained until 1999-2000. GDP growth has fluctuated since then, at 2.0%, 3.9% and 2.8% in 2000-01, 2001-02 and 2002-03 respectively.

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 final consumption expenditure	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 gross fixed capital formation	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(a)		-386	-459	-801	-2,023	-3,458	1,283
Gross domestic product		23,164	38,345	79,526	145,900	248,566	397,885
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(b)		22	356	-291	30	252	520
Gross domestic product		23,164	38,345	79,526	145,900	248,566	397,885

(a) Expenditure-based. (b) Income-based. Source: Australian System of National Accounts, 2002-03 (5204.0).

29.7 GDP ACCOUNT, Current prices
		1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01	2001-02	2002-03
		$m	$m	$m	$m	$m	$m	$m	$m

Final consumption expenditure
	General government	92,956	96,173	101,332	108,266	113,305	120,390	127,413	134,311
	Households	301,069	314,565	335,102	354,420	374,922	404,271	426,154	452,629
	Total final consumption expenditure	394,025	410,738	436,434	462,686	488,226	524,661	553,567	586,940
Gross fixed capital formation
	Private	88,029	95,040	108,722	113,721	125,711	120,623	134,452	157,703
	Public	23,571	22,550	20,748	25,278	24,898	24,678	26,448	28,268
	Total gross fixed capital formation	111,600	117,588	129,473	138,999	150,609	145,301	160,900	185,971
Changes in inventories		-813	-10	62	4,662	1,791	510	1,136	445
Gross national expenditure		504,812	528,316	565,969	606,346	640,626	670,471	715,603	773,356
Exports of goods and services		99,095	105,160	113,744	112,025	126,222	153,854	153,340	148,409
less Imports of goods and services		101,078	103,590	118,482	126,456	140,811	153,205	154,573	167,093
Statistical discrepancy(a)		-	-	-	-	-	-	-	-1,420
Gross domestic product		502,828	529,886	561,229	591,917	626,037	671,120	714,370	753,252
Compensation of employees		241,100	257,968	268,912	286,610	302,116	321,024	337,657	360,012
Gross operating surplus		153,623	162,189	177,700	183,069	196,422	210,279	225,766	240,334
Gross mixed income		49,064	47,969	50,062	52,396	54,272	57,522	65,365	61,683
Total factor income		443,787	468,126	496,674	522,075	552,810	588,825	628,788	662,029
Taxes less subsidies on production and imports		59,041	61,760	64,555	69,842	73,227	82,295	85,582	92,474
Statistical discrepancy(b)		-	-	-	-	-	-	-	-1,251
Gross domestic product		502,828	529,886	561,229	591,917	626,037	671,120	714,370	753,252

(a) Expenditure-based. (b) Income-based. Source: Australian System of National Accounts, 2002-03 (5204.0).

29.8 EXPENDITURE ON GDP, Chain volume measures(a)
		1995-96	1996-97	1997-98	1998-99	1999-2000	2000-01	2001-02	2002-03
		$m	$m	$m	$m	$m	$m	$m	$m

Final consumption expenditure
	General government	108,468	110,031	114,186	118,808	122,278	124,769	127,413	130,616
	Households	341,003	350,892	367,713	385,440	401,059	412,726	426,154	443,168
	Total final consumption expenditure	449,374	460,858	481,852	504,218	523,315	537,479	553,567	573,784
Gross fixed capital formation
	Private	92,976	102,700	116,625	120,731	133,083	122,189	134,452	155,965
	Public	23,720	23,132	21,231	25,473	25,252	24,712	26,448	28,187
	Total gross fixed capital formation	114,017	123,050	135,087	144,366	156,052	146,076	160,899	184,149
Domestic final demand		565,572	586,478	619,494	650,426	681,730	684,307	714,467	757,936
Changes in inventories		-255	-821	-28	5,397	3,721	1,210	1,136	520
Gross national expenditure		562,312	583,144	616,018	652,186	682,062	683,923	715,603	758,456
Exports of goods and services		112,701	124,514	129,113	131,743	144,373	154,975	153,340	152,435
less Imports of goods and services		107,311	117,967	129,436	135,685	153,126	151,191	154,573	175,319
Statistical discrepancy(b)		-	-	-	-	-	-	-	-1,363
Gross domestic product		569,125	590,471	616,805	649,550	673,944	687,720	714,370	734,209

(a) Reference year is 2001-02. (b) Expenditure-based. Source: Australian System of National Accounts, 2002-03 (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 1966-67. (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 54.4% for 2002-03 it remains below the level recorded for most of the 1970s and early-1980s. In 2002-03 the profits share of total factor income of 25.0% for private and public corporations is the highest recorded value.

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 2002-03 - table 29.11 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.12 shows annual time series from 1995-96 to 2002-03.

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 final consumption expenditure	16,892	27,062	60,175	111,220	194,263	308,390
Net saving(a)		1,917	3,751	5,980	9,690	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, 2002-03 (5204.0)

29.12 NATIONAL INCOME ACCOUNT, Current prices
		1995-96	1996-97	1997-98	1998-99	1999-00	2000-01	2001-02	2002-03
		$m	$m	$m	$m	$m	$m	$m	$m

INCOME

Compensation of Employees		241,100	257,968	268,912	286,610	302,116	321,024	337,657	360,012
Gross operating surplus		153,623	162,189	177,700	183,069	196,422	210,279	225,766	240,334
Gross mixed income		49,064	47,969	50,062	52,396	54,272	57,522	65,365	61,683
Taxes less subsidies on production and imports		59,041	61,760	64,555	69,842	73,227	82,295	85,582	92,474
Net primary income from non-residents		-19,533	-19,151	-18,091	-18,430	-18,249	-19,241	-20,273	-22,555
Gross national income		483,295	510,735	543,138	573,487	607,788	651,879	694,097	731,948
Net secondary income from non-residents		64	-21	22	-749	218	32	-17	-220
Gross disposable income		483,359	510,714	543,160	572,738	608,006	651,911	694,080	731,728

USE OF DISPOSABLE INCOME

Final consumption expenditure
	General government	92,956	96,173	101,332	108,266	113,305	120,390	127,413	134,311
	Households	301,069	314,565	335,102	354,420	374,922	404,271	426,154	452,629
	Total final consumption expenditure	394,025	410,738	436,434	462,686	488,226	524,661	553,567	586,940
Net saving(a)		10,750	19,646	20,654	18,837	21,705	20,925	25,724	23,178
Consumption of fixed capital		78,584	80,330	86,072	91,215	98,075	106,325	114,789	121,610
Total use of gross disposable income		483,359	510,714	543,160	572,738	608,006	651,911	694,080	731,728

(a) Net saving is derived as a balancing item. Source: Australian System of National Accounts, 2002-03 (5204.0).

Graph 29.13 shows net saving by institutional sector as a proportion of GDP for the years 1966-67 to 2002-03. Household net saving as a percentage of GDP generally rose between 1966-67 and 1974-75, but has fallen subsequently from its high of 11.1% in 1974-75 to a position in 2002-03 where, for the first time, consumption by households exceeded income and, consequently, household net saving was negative (-$11.0b) (table 29.15). General government net saving was negative from 1975-76 to 1996-97 (except for 1988-89 and 1989-90). In 2002-03 it was positive at 1.8% ($13.3b). In 2002-03 net saving of non-financial corporations was 1.2% of GDP ($8.9b). Net saving of financial corporations was negative from 1982-83 to 1986-87, the only period for which this sector has recorded negative net saving. In 2002-03 net saving of financial corporations was 1.6% of GDP ($11.9b).

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 2002-03 - table 29.14 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.15 shows annual time series from 1995-96 to 2002-03.

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	319	-1,629	100	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 net saving	1,917	3,751	5,980	9,690	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		6,250	10,908	18,861	32,343	47,301	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 gross fixed capital formation	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 changes in inventories	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		6,250	10,908	18,861	32,343	47,301	74,276

(a) Expenditure-based discrepancy less income-based discrepancy. Source: Australian System of National Accounts, 2002-03 (5204.0).

29.15 NATIONAL CAPITAL ACCOUNT, Current prices
		1995-96	1996-97	1997-98	1998-99	1999-00	2000-01	2001-02	2002-03
		$m	$m	$m	$m	$m	$m	$m	$m

Net saving
	Non-financial corporations	4,125	1,994	4,253	-721	-6,928	-4,417	10,505	8,917
	Financial corporations	3,073	2,076	4,234	679	4,892	9,414	6,556	11,946
	General government	-11,738	-2,996	4,082	10,333	17,367	1,916	3,110	13,324
	Households	15,290	18,572	8,085	8,546	6,373	14,012	5,553	-11,009
	Total net saving	10,750	19,646	20,654	18,837	21,705	20,925	25,724	23,178
Consumption of fixed capital		78,584	80,330	86,072	91,215	98,075	106,325	114,789	121,610
Net capital transfers receivable from non-residents		1,045	1,323	1,097	1,186	1,136	1,182	1,186	1,431
Gross saving and capital transfers		90,379	101,299	107,823	111,237	120,915	128,433	141,699	146,219
Gross fixed capital formation
	Private	88,029	95,040	108,722	113,721	125,711	120,623	134,452	157,703
	Public corporations	11,322	9,525	8,013	11,621	9,018	8,600	10,020	10,702
	General government	12,249	13,025	12,735	13,658	15,879	16,078	16,429	17,566
	Total gross fixed capital formation	111,600	117,588	129,473	138,999	150,609	145,301	160,900	185,971
Changes in inventories
	Private non-farm	-487	2,402	-418	4,675	1,864	1,047	910	1,241
	Farm and public authorities	-326	-2,412	480	-13	-73	-537	226	-796
	Total changes in inventories	-813	-10	62	4,662	1,791	510	1,136	445
Acquisitions less disposals of non-produced non-financial assets		-25	6	-30	19	83	73	170	133
Statistical discrepancy(a)		-	-	-	-	-	-	-	-169
Net lending to non-residents		-20,382	-16,285	-21,680	-32,443	-31,567	-17,451	-20,507	-40,161
Total capital accumulation and net lending		90,379	101,299	107,823	111,237	120,915	128,433	141,699	146,219

(a) Expenditure-based discrepancy less income-based discrepancy. Source: Australian System of National Accounts, 2002-03 (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 2000-01. In 2002-03 investment by non-financial corporations was 11.2% of GDP. Household investment has generally remained at around 9% of GDP but rose sharply in 2002-03 to 10.3%. General government investment as a proportion of GDP peaked at 4.8% in 1975-76. It has generally fallen since and was 2.3% of GDP in 2002-03. Financial corporations investment peaked in 1989-90 at 1.9% of GDP, and was 0.9% of GDP in 2002-03.

Graph 29.16: GROSS FIXED CAPITAL FORMATION, 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 -5.2% in 2002-03. Non-financial corporations have been net borrowers over the whole period from 1965-66 to 2002-03, and the amounts borrowed have fluctuated significantly from year to year. As a proportion of GDP, their net borrowing was 2.5% in 2002-03. 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 2002-03 financial corporations net lending represented 1.5% of GDP. After recording a record level of borrowing in 1992-93 as a proportion of GDP (6.4%), general government borrowing steadily declined. In 1997-98 the sector became a net lender except for 2000-01 and 2001-02 when it became a net borrower again. In 2002-03 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 Chapter 30 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 2002-03 - table 29.18 shows a series of snapshots at five-yearly intervals to 1990-91, while table 29.19 shows annual time series from 1995-96 to 2002-03.

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 primary income receivable	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 primary income payable	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, 2002-03 (5204.0).

29.19 EXTERNAL ACCOUNT, Current prices
		1995-96	1996-97	1997-98	1998-99	1999-00	2000-01	2001-02	2002-03
		$m	$m	$m	$m	$m	$m	$m	$m

Imports of goods and services		101,078	103,590	118,482	126,456	140,811	153,205	154,573	167,093
Primary income receivable
	Compensation of employees	458	539	792	854	963	1,065	1,054	877
	Property income	26,215	27,175	27,683	27,864	31,055	34,379	34,366	35,772
	Total primary income receivable	26,673	27,714	28,475	28,718	32,018	35,444	35,420	36,649
Secondary Income		3,228	3,561	3,971	5,247	4,407	4,421	4,297	4,453
Capital transfers to non-residents		907	877	971	1,011	1,199	1,260	1,357	1,293
Acquisitions less disposals of non-produced non-financial assets		-25	6	-30	19	83	73	170	133
Net lending		-20,382	-16,285	-21,680	-32,443	-31,567	-17,451	-20,507	-40,161
Resources provided by non-residents		111,479	119,463	130,189	129,008	146,763	176,609	174,260	168,320
Exports of goods and services		99,095	105,160	113,744	112,025	126,222	153,854	153,340	148,409
Primary income payable
	Compensation of employees	610	678	747	797	826	896	878	897
	Property income	6,530	7,885	9,637	9,491	12,943	15,307	14,269	13,197
	Total primary income payable	7,140	8,563	10,384	10,288	13,769	16,203	15,147	14,094
Secondary income payable		3,292	3,540	3,993	4,498	4,625	4,453	4,280	4,233
Capital transfers from non-residents		1,952	2,200	2,068	2,197	2,335	2,442	2,543	2,724
Resources provided to non-residents		111,479	119,463	130,189	129,008	146,763	176,609	174,260	168,320

Source: Australian System of National Accounts, 2002-03 (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 1966-67.

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 1966-67 to 2002-03. In 2002-03 the import ratio was 22.2% and the export ratio was 19.7%.