1301.0 - Year Book Australia, 2012
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 24/05/2012
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Statistics contained in the Year Book are the most recent available at the time of preparation. In many cases, the ABS website and the websites of other organisations provide access to more recent data. Each Year Book table or graph and the bibliography at the end of each chapter provides hyperlinks to the most up to date data release where available.
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STATISTICAL OVERVIEW
BALANCE OF PAYMENTS
The balance on current account for 2010–11 was a deficit of $33.2 billion, a decrease of $22.8 billion (41%) on the previous year (table 31.2). The balance on goods and services was a surplus of $20.9 billion, a turnaround of $25.5 billion on the deficit of $4.6 billion recorded in 2009–10. The balance on goods was a surplus of $27.7b and the balance on services was a deficit of $6.8b. The net primary income deficit rose by $3.3b (7%) with an increase in primary income credits of $5.9b (17%) and an increase in primary income debits of $9.2b (11%).
The deficit on capital account increased by $0.3b (91%) to $0.6b in 2010–11.
The financial account recorded a net inflow of investment into Australia in 2010–11 of $34.1b. This was largely driven by net portfolio investment of $33.8b together with net direct investment of $24.8b. This was countered by net outflows in financial derivatives of $11.3b, other investment of $10.1b and reserve assets of $3.2b.
Source: Balance of Payments and International Investment Position, Australia (5302.0).
Graph 31.3 shows the differing influences of the balance on goods and services (trade balance) and the net primary income deficit on the balance on current account. The net primary income deficit rose from $18.5 billion in 1996–97 to $53.6 billion in 2010–11. The underlying level of net primary income drives the level of the current account deficit, as Australia continues to service its external liabilities.
RATIOS
The ratio of the current account deficit to gross domestic product (GDP) was –2.4% in 2010–11, a substantial decrease on the previous year, which was –4.3% (table 31.4).
EXCHANGE RATES
Graph 31.5 shows movements in the annual average exchange rates against the Australian dollar for the four major currencies. Values of non-financial and financial transactions as well as the values of positions of financial assets and liabilities may be expressed initially in a variety of currencies or in other standards of value. The conversion of these values into a reference unit of account is necessary for the construction of consistent and analytically meaningful accounts and is typically carried out at the point of transaction or reporting to Customs based on current trading day values.
INTERNATIONAL TRADE IN GOODS AND SERVICES (BALANCE OF PAYMENTS BASIS)
Australia’s international trade in goods and services (chain volume measures) for the five years to 2010–11 is shown in table 31.6.
Chain volume measures of exports and imports remove the effects of price changes. They provide measures, in dollar values, which indicate changes in the actual volume of exports and imports.
Between 2009–10 and 2010–11, the chain volume measures of Australia’s exports of goods and services increased by $0.6 billion, while imports increased by $26.9 billion (10%). In comparison, the current price value of exports, which incorporates both volume and price changes, increased by $43.8b (17%) (table 31.2). This indicates that, on average, the prices of Australia’s exports increased more rapidly than their volumes over the period.
Table 31.6 also presents various price indexes for Australia’s trade in goods and services. The implicit price deflators (IPDs) are derived by dividing the current price measures (table 31.2) by the corresponding chain volume measures. These IPDs reflect not only price change, but also compositional effects from year to year.
Australia’s terms of trade, which is a measure of the purchasing power of its exports over imported goods and services (derived by dividing the IPD for credits by the IPD for debits) rose by 20.6% to 120.6 in 2010–11, reflecting a 17.0% rise in the IPD for goods and services credits and a 3.0% fall in the IPD for goods and services debits.
INTERNATIONAL TRADE IN GOODS BY COMMODITY (MERCHANDISE TRADE BASIS)
In 2010–11, total exports of goods on a merchandise trade basis increased $45.0 billion (22%) to $245.7 billion. Graph 31.7 shows the top 10 commodity exports in 2010–11. The largest increases by value were Iron ore and concentrates, up $23.3b (66%) and Coal, not agglomerated, up $7.4b (20%).
In 2010–11, total imports of goods on a merchandise trade basis increased $10.6 billion (5%) to $214.2 billion. Graph 31.8 shows the top 10 commodity imports in 2010–11. The largest increase by value was Crude petroleum oils, up $4.6b (31%) and the largest decrease was Gold, non-monetary, down $2.3b (30%).
INTERNATIONAL TRADE IN GOODS BY COUNTRY (MERCHANDISE TRADE BASIS)
For exports, country refers to the country to which the goods were consigned at the time of export. For imports, country refers to the country of origin of the goods, that is, where the majority of processing of the goods took place. Table 31.9 shows merchandise exports to Australia's 10 main destinations and table 31.10 shows merchandise imports from the 10 main countries of origin, in 2010–11.
In 2010–11, Australia recorded a merchandise trade surplus of $31.6 billion. The largest trade surpluses by country are as follows:
Source: International Trade in Goods and Services, Australia (5368.0).
In 2010–11, Australia recorded a merchandise trade deficit with a number of countries, the largest of which were:
INTERNATIONAL TRADE IN SERVICES
Table 31.11 provides details of Australia’s international trade in services, by service type.
In 2006–07, Australia recorded a surplus on its international trade in services (i.e. the value of exports was greater than the value of imports). However, between 2007–08 and 2010–11, Australia recorded annual deficits. Between 2009–10 and 2010–11, the services deficit increased $5.4 billion (393%), with a decrease in exports of $1.4 billion (3%) and an increase in imports of $4.0 billion (7%). The major contributor to the decrease in services exports in 2010–11 was a decrease in Travel services, caused by a decrease in Education-related personal travel. Other business services also decreased. These decreases were partially offset by small increases in all categories of Transport services, except Freight. There were increases in all the main categories of services imports with large contributions by Other business services, Travel services and Transport services.
Source: Balance of Payments and International Investment Position, Australia (5302.0).
Tables 31.12 and 31.13 show Australia's main trading partners for exports and imports of services in 2010–11.
In 2010–11, Australia recorded a deficit on its trade in services with its major services trading partner, the United States of America, as well as deficits for Singapore, the United Kingdom, Hong Kong (SAR of China) and Japan. A large trade surplus was recorded with China (excludes SARs and Taiwan), and a smaller surplus with New Zealand.
INTERNATIONAL INVESTMENT POSITION
Australia’s net international investment position is the difference between the levels of Australia’s foreign financial liabilities and the levels of its foreign financial assets. Historically, Australia has had a net liability position with the rest of the world.
Graph 31.14 shows the components of Australia's international investment position, indicating that the growth in Australia's net international liabilities between 30 June 2001 and 30 June 2011 is mostly due to a rise in Australia's net foreign debt. At 30 June 2011, Australia's net foreign liabilities of $797.7 billion were composed of net foreign debt of $686.2 billion and net foreign equity of $111.4 billion.
Table 31.15 provides a reconciliation between opening and closing levels for foreign financial assets, foreign financial liabilities and Australia’s net international investment position for the past three financial years. Increases and decreases in these assets and liabilities are due to financial transactions (investment flows), price changes (share prices and interest yields), exchange rate changes and other adjustments.
FOREIGN DEBT
Australia's foreign debt liabilities include borrowing from non-residents and other non-equity liabilities to non-residents such as derivatives positions with a negative market value. Foreign debt assets include lending to non-residents and other non-equity assets such as derivatives positions with a positive market value. The majority of public sector debt assets are held by the Reserve Bank of Australia as reserve assets.
Table 31.16 shows foreign debt assets and liabilities and net foreign debt attributable to the public sector (general government plus public financial and non-financial corporations) and the private sector. At 30 June 2011, the public sector was in a net debt liability position with non-residents of $148.9 billion. Of total private sector net foreign debt of $537.3 billion at 30 June 2011, private financial corporations accounted for $354.1 billion and private non-financial corporations accounted for $183.3 billion.
LEVELS OF FOREIGN ASSETS AND FOREIGN LIABILITIES
In table 31.17, levels of investment are categorised by assets/liabilities and functional category (Direct, Portfolio, Financial derivatives, Other and Reserve assets).
Direct investment is a category of international investment that reflects the objective of obtaining a lasting interest by a resident in one economy in an enterprise in another economy, and implies a significant degree of influence by the investor in the management of the enterprise. A foreign Direct investment relationship is established when an investor, who is a resident in one economy, holds 10% or more of the ordinary shares or voting stock of an enterprise ('direct investment enterprise') in another economy. The Portfolio investment category covers investment in equity where the investor holds less than 10% of the ordinary shares or voting stock of an enterprise and investment in debt securities. The remaining categories are Financial derivatives, Other investment and Reserve assets (in the case of foreign assets).
The 2010–11 net international investment position increased by $19.8 billion over 2009–10 (table 31.15). The level of foreign liabilities rose $66.3 billion (table 31.17), while the level of foreign assets rose $46.5 billion.