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TECHNICAL NOTE

Presented below are some of the more significant quality assurance work undertaken for the historical revision through reviews of compilation methods and through source data.


ABS REPORTING STANDARD FOR REGISTERABLE SUPERANNUATION ENTITIES

The reported data from September quarter 2016 was backcast for all financial instruments and counterparty sectors back to September quarter 2005 (Table 18 - Finnacial Assets and Liabilities of Pension Funds). As discussed in the Information paper: Changes to Managed Funds to incorporate data from updated Superannuation funds reporting standards, 2017 (cat. no. 5655.0.55.004) to reflect changes in superannuation industry practice, and to align with the System of National Accounts framework, the 'look-through' approach to investments in wholesale funds previously applied within the Australian National Accounts is no longer applied from September quarter 2005. The ‘non-look through’ approach leads to an increase in investments in units (equity) in wholesale trusts by superannuation funds, while wholesale trusts hold and report the underlying assets themselves. This does not change the total assets of superannuation funds as the amount invested in units in trusts increases by the amount that the investment in underlying assets decreases. The increase in wholesale trust assets in the non-financial investment fund sector and non-money market financial investment fund sector will be evident in Table 9 and 22 respectively. Within the time series, the ABS smoothed the "non-look through" approach from June quarter 1998 ( complete 'look-through') to September quarter 2005 ('non-look through').


SELF MANAGED SUPERANNUATION FUNDS

The source data for Self-Managed Superannuation Fund (SMSF) included within Pension Funds (Table 18) is modelled for the detail quarterly financial instruments and counterparty sector from the annual Australian Taxation Office's (ATO) compliance data. The assumptions within the models were reviewed and updated, including the inclusion for the first time of limited recourse borrowings undertaken by SMSFs, (Table 31, loans from banks).


LISTED AND UNLISTED EQUITY MARKETS

The following changes were implemented in the equity markets:

• the ABS Survey of International Investment (SII) recently provided reported data of non-residents investing in listed and unlisted equity of other private non-financial corporations. The past data for these splits of listed and unlisted equity investment were modelled. The new reported data indicates that the modelled estimates of non-residents investment in listed equity of other private non-financial corporations have been too high. The new reported splits of listed and unlisted equity investment by non-resident were backcast back to mid 2000s. The impact of these new estimates meant that holdings of listed equity of other private non-financial corporations by pension funds, life insurance, non-life insurance, non-money market financial investment funds and households increased for this period;
• household holdings of listed equity of banks was reviewed, and more plausible estimates were implemented through the time series;
• the latest annual source data from the ABS Survey of Income and Housing (SIH), 2015-16, for household investment in incorporated business was implemented into the model that generates these estimates on a quarterly basis. The SIH provides annual estimates every two years back to 2003-04 within the model. The entire model was reviewed, and new estimates were generated and implemented back to June quarter 1988;
• the treatment of privatisation, in particular the State Governments privatisation of electricity and port assets were reviewed back to 2003. A new treatment consistent within the framework of the System of National Accounts was implemented. The new treatment impacted on the estimates of unlisted equity issued by other private non-financial corporations;
• inclusion of Exchange Traded Funds (ETF) and other exchange traded products into the issuance totals in the listed non-money market financial investment fund sector back to June quarter 2003;
• removal of debt-like securities (capital notes and convertible notes) from listed bank issuance, resulted in a downward revision in the listed bank issuance back to September quarter 2011. These securities were previously being double counted across the debt and equity markets; and
• reclassification of several mis-classified units across listed equity issuance sectors, the largest of which was the reclassification of a unit from the other financial corporation sector to a non-life insurance corporation sector.

• implementation of the market value of issuance back to September quarter 2000 (first issuance in Australia), the previous issuance estimates were on a face value basis;
• reviewed the model that estimates the holders of these bonds, including some new improved reporting of holders from the Survey of International Investment; and
• corrected the incorrect assumption that some Kangaroo bonds were being reported as non-resident bonds issued offshore, the correction resulted in issuance of non-resident bonds offshore increasing in the time series back to September quarter 2000.