SPECIAL ARTICLE
IMPROVING MACROECONOMIC STATISTICS
Macroeconomic statistics deal with the performance, structure and behaviour of Australia's economy as a whole.
Australia's GDP (gross domestic product) is the most widely recognised macroeconomic statistic, but it is just one of a whole range of financial measures - collectively called the national accounts – that aim to track Australia’s economic performance in relation to the rest of the world.
PROJECT DRIVERS
Over the last few years, the ABS has been improving the collection, analysis and quality of a number of its macroeconomic statistics.
These improvements mainly relate to Australia's national accounts, international trade and finance. One major milestone has been the release of Australia's first quarterly household balance sheet.
Priorities for improvement have aligned with changes in the Australian economy as it moves away from tangible (goods based) and more towards intangible (services based).
FOLLOWING THE SHIFT FROM GOODS TO SERVICES IN RETAIL TRADE
Historically, retail trade was around 60% of household spending, but this has been slowly falling since the 1960s. Retail trade now makes up only about 30% of household final consumption expenditure.
To address this shift in consumer spending, the ABS has been expanding the coverage of retail trade from the traditional 'bricks and mortar' approach to also include service activities used by households - in leisure, travel, recreation and entertainment sectors of the economy - as well as to start including estimates of online retail sales.
The expansion of coverage started with the establishment of two new quarterly collections: the Survey of Consumer Sales - Energy Retailing and the Survey of Consumer Sales - Communications Services.
The energy retailing survey provides estimates of the value of sales of electricity and gas to consumer customers, while the communications services survey provides estimates of the value of sales of mobile, fixed line and fixed internet services to household customers.
Further achievements include the enhancement of the existing monthly retail trade collection to include Experimental Estimates of Online Retail Turnover by domestic retailers. These experimental estimates started in the September quarter 2013 and they have been subject to continuing improvements in survey methodology and in response to user feedback.
IMPROVING PRODUCER PRICE INDEXES FOR SERVICES
Just as the consumer price index shows price change at the consumer or household level, producer price indexes show price change at the wholesale level. Producer price indexes were traditionally developed around tangible industries such as mining, agriculture and manufacturing.
However, as the modern economy transitions to a service based economy, the ABS has prioritised improvements to service based producer price indexes to improve the coverage, robustness, timeliness and quality of existing services producer price indexes as well as to introduce several new indexes.
The first of several new indexes based on administrative data was implemented with the completion of the producer price index review. Additional series have been progressively implemented into the services producer price indexes as part of an ongoing improvement program.
IMPROVING INTERNATIONAL TRADE COVERAGE
Improvements to coverage and efficiencies in data collection have been made, as well as enhancing the quality of merchandise trade quantity data that is used to compile volume measures in the national accounts. These have led to improvements in the data on international trade transactions in government services, and government finance statistics data in general.
A significant component was improving the quality of the Survey of International Trade in Services, by linking the survey to the ABS Business Register, adopting data collection and editing systems similar to those employed by other economic collections and streamlining the systems adopted in modelling estimates for non-surveyed service types.
Thanks to this work, significant improvements have been made to data quality - timeliness has been improved and the level of revisions has reduced, providing a better quality output for users.
WORKING WITH APRA TO IMPROVE FINANCIAL ACCOUNTS
The ABS has a long standing agreement to capture, edit and disseminate data sourced from the Australian Prudential Regulation Authority (APRA) via the tripartite data sharing agreement in place between APRA, the Reserve Bank of Australia and ABS. The key objective of this agreement is to reduce response burden to Australian financial businesses.
A particular focus of recent tripartite work is to produce improved superannuation data, which contributes to Australia's financial accounts and ABS Managed Funds estimates.
The superannuation data is specifically used to measure the contribution of the superannuation industry to GDP, and to national, sector (and in particular the household sector) measures of income, savings and wealth.
The improvements also facilitate the production of internationally comparable statistics on the performance of the superannuation industry and reflect current international statistical standards.
This project is to improve the quality of Australia's financial accounts through quality assured quarterly APRA and ABS income and expense data.
The project uses quarterly APRA balance sheet data from authorised depository institutions and registered financial corporations data as well as data from registered superannuation entities and general insurers.
The development of better systems and processes will facilitate annual and quarterly compilation and deliver financial income estimates. The annual process will enable not only the production of series that feed directly into the Australian System of National Accounts, but also the compilation and delivery of annual series for the purposes of producing benchmarks.
HOUSEHOLD DISTRIBUTION WITHIN THE AUSTRALIAN SYSTEM OF NATIONAL ACCOUNTS
Widely used macroeconomic measures of the economy such as the national accounts provide vital information on the size and structure of the economy but they do not provide information on the distribution of income and wealth, or individual access to goods and services.
These issues of equity are widely recognised as crucial to an understanding of material wellbeing, and have received increasing attention over recent years. Issues of income distribution and access are also central to targeting and improving the efficiency of economic policies.
In 2014, the ABS was among only a few national statistical offices (NSOs) to produce a time series of the household distributional dataset within the Australian System of National Accounts. The data are constructed using both the macroeconomic household estimates produced through the Australian System of National Accounts and the ABS household economic resource surveys. The data answers questions related to household groups:
- contribution to growth in income (consumption, gross saving and net worth)
- household material living standards.
The feedback received by users on the data has been very positive, with the Reserve Bank of Australia indicating that it would like to see the time series extended to the most recent release of the Australian National Accounts.
In November 2015, the ABS plans to release the household distributional dataset up to 201415. The release will include the latest data from the
2014–15 Australian System of National Accounts (cat. no. 5204.0)
released in October 2015.
ACKNOWLEDGEMENTS
The ABS would like to thank the Australian Prudential Regulation Authority and the Reserve Bank of Australia for their assistance and encouragement across a range of indicators. The ABS also acknowledges the importance of the feedback as well as the information provided by individual businesses to many of the datasets used in creating Australia's macroeconomic indicators.
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