NATIONAL INCOME, EXPENDITURE AND PRODUCT ACCOUNTS

The Australian national income, expenditure and product accounts are compiled and published each 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).


PRODUCTION ACCOUNT

The production account indicates changes in Australian economic activity over time. Table 30.2 shows annual time series from 2006–07 to 2010–11. Table 30.3 shows expenditure on GDP in volume terms.

In 2010–11, in volume terms (i.e. after the effects of price change are removed from the dollar value of Australia's production), GDP recorded a growth rate of 2.1%.

30.2 PRODUCTION ACCOUNT, Current prices
		2006–07	2007–08	2008–09	2009–10	2010–11
		$m	$m	$m	$m	$m
Final consumption expenditure
	General government	186 689	201 494	220 597	233 697	248 997
	Households	606 353	657 717	676 214	712 181	756 144
	Total final consumption expenditure	793 042	859 211	896 811	945 878	1 005 141
Gross fixed capital formation
	Private	247 653	277 561	283 974	276 406	288 752
	Public	51 444	58 797	67 137	79 627	82 668
	Total gross fixed capital formation	299 097	336 358	351 111	356 033	371 420
Changes in inventories		2 830	4 733	–3 058	–3 913	5 465
Gross national expenditure		1 094 973	1 200 302	1 244 864	1 298 000	1 382 026
Exports of goods and services		216 795	233 813	284 571	253 762	297 507
less Imports of goods and services		228 702	258 166	277 218	258 383	276 631
Statistical discrepancy(a)		0	0	0	0	–1 733
Gross domestic product		1 083 060	1 175 949	1 252 218	1 293 380	1 401 168
Compensation of employees		527 398	574 581	596 098	618 137	665 951
Gross operating surplus		348 195	383 846	435 943	443 829	486 180
Gross mixed income		92 182	94 527	100 966	103 549	109 944
Total factor income		967 775	1 052 954	1 133 007	1 165 515	1 262 075
Taxes less subsidies on production and imports		115 285	122 995	119 211	127 865	134 699
Statistical discrepancy(b)		0	0	0	0	4 395
Gross domestic product		1 083 060	1 175 949	1 252 218	1 293 380	1 401 168
(a) Expenditure-based. (b) Income-based.
Source: Australian System of National Accounts, 2010–11 (5204.0).

30.3 EXPENDITURE ON GDP, Volume measures(a)
		2006–07	2007–08	2008–09	2009–10	2010–11
		$m	$m	$m	$m	$m
Final consumption expenditure
	General government	216 468	223 364	229 583	233 697	239 545
	Households	663 002	694 206	694 585	712 181	736 733
	Total final consumption expenditure	879 529	917 775	924 152	945 878	976 278
Gross fixed capital formation
	Private	258 278	284 015	284 483	276 406	287 793
	Public	55 532	59 935	64 237	79 627	82 691
	Total gross fixed capital formation	313 194	343 308	348 082	356 035	370 484
Domestic final demand		1 191 986	1 261 010	1 272 240	1 301 913	1 346 763
Changes in inventories		3 533	6 121	–2 455	–3 913	5 333
Gross national expenditure		1 192 011	1 263 952	1 267 681	1 298 000	1 352 096
Exports of goods and services		228 442	236 965	241 050	253 762	254 710
less Imports of goods and services		220 778	252 934	244 612	258 383	285 191
Statistical discrepancy(b)		0	0	0	0	–1 558
Gross domestic product		1 201 563	1 246 899	1 263 934	1 293 380	1 320 057
(a) Reference year is 2009–10. (b) Expenditure-based.
Source: Australian System of National Accounts, 2010–11 (5204.0).

The production 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 30.4 and 30.5 show how the shares of total factor income accruing to compensation of employees and to profits have changed since 1965–66. (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 compensation of employees (COE) share of total factor income was 62% in 1974–75. The COE share in 2010–11 was 53%, steady with the previous year (53%), and one of the lowest levels recorded in the time series presented. The profits share of total factor income has been growing steadily since 1998–99. In 2010–11, the profits share was 28%, the second highest share recorded; the highest was in 2008–09 (29%).





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 that is not spent in this way is 'saving'. Table 30.6 shows annual time series in current prices from 2006–07 to 2010–11.

Graph 30.7 shows net saving by institutional sector as a proportion of GDP for the years 1965–66 to 2010–11. Household net saving as a percentage of GDP generally fluctuated between 8.6% and 11% between 1965–66 and 1971–72. It then rose to a peak of 13% in 1974–75. The series then generally decreased, eventually reaching its lowest point at 0.3% of GDP in 2002–03. Household net saving as a proportion of GDP remained below 1% until 2005–06, before rising again. By 2010–11, it was 5.4% of GDP and household income exceeded consumption by $76.9 billion (table 30.8).

General government net saving as a proportion of GDP was positive from 1965–66 to 1973–74 before turning negative from 1974–75 to 1996–97 (except for 1988–89). It remained positive from 1997–98 to 2007–08. In 2010–11, general government net saving was negative at –$27.8 billion, while net saving of non-financial corporations was 2.6% of GDP ($36.3b). Net saving of financial corporations has been positive at between 1% and 3% of GDP for virtually all of its history except for 1988–89 and 1989–90, where it rose above 3%. In 2010–11, net saving of financial corporations was 2.5% of GDP ($35.1b).

30.6 NATIONAL INCOME ACCOUNT, Current prices
		2006–07	2007–08	2008–09	2009–10	2010–11
		$m	$m	$m	$m	$m
INCOME
Compensation of employees		527 398	574 581	596 098	618 137	665 951
Gross operating surplus		348 195	383 846	435 943	443 829	486 180
Gross mixed income		92 182	94 527	100 966	103 549	109 944
Taxes less subsidies on production and imports		115 285	122 995	119 211	127 865	134 699
Net primary income from non-residents		–48 398	–49 986	–46 078	–47 816	–52 437
Gross national income		1 034 662	1 125 963	1 206 140	1 245 564	1 344 337
Net secondary income from non-residents		–305	100	–1 365	–1 956	–2 011
Gross disposable income		1 034 357	1 126 063	1 204 775	1 243 608	1 342 326
USE OF GROSS DISPOSABLE INCOME
Final consumption expenditure
	General government	186 689	201 494	220 597	233 697	248 997
	Households	606 353	657 717	676 214	712 181	756 144
	Total final consumption expenditure	793 042	859 211	896 811	945 878	1 005 141
Net saving(a)		70 625	82 728	109 475	90 688	119 890
Consumption of fixed capital		170 690	184 124	198 489	207 042	217 294
Total use of gross disposable income		1 034 357	1 126 063	1 204 775	1 243 608	1 342 326
(a) Net saving is derived as a balancing item. Source: Australian System of National Accounts, 2010–11 (5204.0).

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. Between 2006–07 and 2010–11, Australia's saving and consumption of fixed capital were not sufficient to pay for all the fixed capital needed for Australian production; therefore, 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. Table 30.8 shows the annual time series from 2006–07 to 2010–11 in current prices.

Graph 30.9 shows gross fixed capital formation (investment) by institutional sector as a proportion of GDP. Investment by non-financial corporations generally fell during the mid 1970s but stabilised in the 1980s and 1990s (it has generally been above 10% of GDP). In 2010–11, investment by non-financial corporations was 13% of GDP. Household investment as a proportion of GDP remained steady at around 10% of GDP throughout the time series and in 2010–11, the ratio to GDP was 8.9%. General government investment as a proportion of GDP peaked at 5.4% in 1967–68 and 1968–69, and has generally fallen since then. It was 4.2% of GDP in 2010–11. The highest ever level of financial corporations investment, expressed as a proportion of GDP, was recorded in 1989–90 and 1990–91 (1.8%). It has generally fallen since and was 0.7% of GDP in 2010–11.

Graph 30.10 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.

30.8 NATIONAL CAPITAL ACCOUNT, Current prices
		2006–07	2007–08	2008–09	2009–10	2010–11
		$m	$m	$m	$m	$m
Net saving
	Non-financial corporations	10 138	11 911	40 097	34 401	36 267
	Financial corporations	8 886	21 246	23 258	15 155	35 114
	General government	31 428	25 017	–30 421	–28 618	-27 788
	Households	20 170	24 556	76 539	69 748	76 924
	Total national net saving	70 625	82 728	109 475	90 688	119 890
Consumption of fixed capital		170 690	184 124	198 489	207 042	217 294
Net capital transfers receivable from non-residents		142	231	367	287	287
Gross saving and capital transfers		241 173	266 621	307 597	297 443	336 898
Gross fixed capital formation
	Private	247 653	277 561	283 974	276 406	288 752
	Public corporations	18 986	21 290	23 104	25 484	24 623
	General government	32 458	37 507	44 033	54 143	58 045
	Total gross fixed capital formation	299 097	336 358	351 111	356 033	371 420
Changes in inventories
	Private non-farm	2 477	4 981	–2 242	–5 532	2 657
	Farm and public authorities	353	–248	–816	1 619	2 808
	Total changes in inventories	2 830	4 733	–3 058	–3 913	5 465
Acquisitions less disposals of non-produced non-financial assets		–423	1	244	4	17
Statistical discrepancy(a)		0	0	0	0	–6 128
Net lending to non-residents		–60 329	–74 471	–40 701	–54 684	–33 876
Total capital accumulation and net lending		241 173	266 621	307 597	297 443	336 898
(a) Expenditure-based discrepancy less income-based discrepancy. Source: Australian System of National Accounts, 2010–11 (5204.0).

The household sector has been a net lender for most years since 1965–66. As a proportion of GDP, net lending by households peaked in 1974–75 at 9.6%. Since then it has trended downwards and the household sector changed from a net lender to a net borrower in 1988–89 and 1989–90. Between 1993–94 and 2007–08, it was a net borrower and in 2010–11 household net lending was 2.6%. Non-financial corporations have been net borrowers over the period 1965–66 to 2010–11 (except for between 1991–92 and 1993–94), and the amounts borrowed have fluctuated significantly from year to year. As a proportion of GDP, their net borrowing was 2.8% in 2010–11.

In 2010–11, net lending of financial corporations represented 2.4% of GDP, with the highest recorded level 2.9% in 1988–89. After a record level of borrowing as a proportion of GDP in 1992–93 (6.4%), general government borrowing steadily declined up until 2000–01. From 2002–03 to 2007–08, the sector was a net lender. Since 2008–09, general government has been a net borrower and in 2010–11, its net borrowing represented 5.1% of GDP.


EXTERNAL ACCOUNT

The external account is derived from the detailed balance of payments current and capital accounts (see chapter 31 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. Table 30.11 shows the annual time series in current prices from 2006–07 to 2010–11.

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 (graph 30.12). The only exception to this pattern was in 1972–73. Net borrowing from non-residents, expressed as a proportion of GDP, increased significantly in the early 1980s and has remained at relatively high levels since then. The ratio of net borrowing from overseas to GDP in 2010–11 was 2.4%, down from 4.2% in 2009–10. Graph 30.12 shows net lending to non-residents as a proportion of GDP since 1965–66.

30.11 EXTERNAL ACCOUNT, Current prices
			2006–07	2007–08	2008–09	2009–10	2010–11
			$m	$m	$m	$m	$m
INCOME ACCOUNT
Income of non-residents
	Imports of goods and services		228 702	258 166	277 218	258 383	276 631
	Primary income receivable
		Compensation of employees	2 794	2 882	3 217	3 239	3 344
		Property income receivable	82 531	90 874	85 361	81 389	90 992
		Total primary income receivable	85 325	93 756	88 578	84 628	94 336
	Secondary income receivable		6 304	6 148	7 571	8 319	8 383
	Total income of non-residents		320 331	358 070	373 367	351 330	379 350
Uses of income of non-residents
	Exports of goods and services		216 795	233 813	284 571	253 762	297 507
	Primary income payable
		Compensation of employees	1 564	1 682	1 717	1 704	1 794
		Property income payable	35 363	42 088	40 783	35 108	40 105
		Total primary income payable	36 927	43 770	42 500	36 812	41 899
	Secondary income payable		5 999	6 248	6 206	6 363	6 372
	Balance on external income account		60 610	74 239	40 090	54 393	33 572
	Total use of income of non-residents		320 331	358 070	373 367	351 330	379 350
CAPITAL ACCOUNT
Balance on external income account			60 610	74 239	40 090	54 393	33 572
Capital transfers receivable			142	231	367	287	287
less Capital transfers payable
Total net capital transfers			142	231	367	287	287
Gross saving and capital transfers			60 752	74 470	40 457	54 680	33 859
Acquisitions less disposals of non-produced non-financial assets			423	–1	–244	–4	–17
Net lending (+) / net borrowing (–)			60 329	74 471	40 701	54 684	33 876
Total capital accumulation and net lending (+) / net borrowing (–)			60 752	74 470	40 457	54 680	33 859
Source: Australian System of National Accounts, 2010–11 (5204.0).

The growing importance of international trade to the Australian economy is illustrated by graph 30.13, which shows the ratios of exports and imports of goods and services to GDP in current prices since 1965–66. In 2010–11, the imports ratio was 20% and the exports ratio was 21%. Since 2000–01, the volume of imports has grown more strongly, up 120%, compared with 24% growth in the volume of exports.