Australian National Accounts: Finance and Wealth

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National, public and private corporations, government and household financial and capital accounts, and household balance sheets.

Reference period
September 2023
Released
21/12/2023

Key statistics

  • Household wealth increased $339.4b (2.3%) to $15,305.3b.
  • Demand for credit was $90.2b. 
  • Australia returned to a net borrowing position of $3.4b this quarter, following a net lending position of $16.9b in the previous quarter.
  • Capital investment as a proportion of GDP rose to 24.4%.

Main features

Financing resources and investment table

Financial market summary table

Flow of funds diagrams

National investment

National investment decreased by $5.8b to $156.4b in the September quarter.

  • General government investment decreased by $10.9b to $23.5b driven by decreases in gross fixed capital formation for both state and local general government and national general government.
  • Non-financial corporations' investment increased by $5.5b to $79.5b, driven by an increase in private non-financial corporations' change in inventories.
  • Households' investment decreased by $0.2b to $50.3b, driven by a decrease in change in inventories. 

Financial investment

Australia was a net borrower of $3.4b from rest of world (ROW). The main contributors were a:

  • $18.0b acquisition by ROW of equity issued by Australia.
  • $14.3b acquisition by ROW of debt securities issued by Australia.
  • $7.2b placement of deposits by ROW.
  • Partly offset by $24.4b acquisition by Australia of debt securities issued by ROW.
  • $7.9b repayment of loans borrowed by Australia from ROW.

Banks continued issuing both one-name paper and long-term debt securities this quarter to meet funding requirements with acquisition by ROW reflecting their participation in that issuance activity. Acquisition of equity issued by Australia reflected that ongoing export revenues earned by foreign-owned resource companies were being reinvested, as well as merger and acquisition activity. The acquisition by Australia of long-term debt securities issued by ROW reflected increased demand for overseas bonds by ADIs and pension funds.

Households

Households $57.2b net lending position was due to a $75.5b acquisition of financial assets, offset by $18.4b incurrence of liabilities. The acquisition of assets was driven by:

  • $50.6b in deposits
  • $26.4b in net equity in superannuation

While liabilities were driven by:

  • $14.0b in loan borrowings

Deposit assets grew strongly this quarter with households receiving proceeds from tax returns and favoured placing excess funds in deposit accounts to take advantage of higher interest rates. Contributions into pension funds rose year on year, reflecting legislative changes to compulsory superannuation and strength in employment. 

General government

General government’s $25.4b net borrowing position was due to $7.8b disposal of financial assets and $17.6b incurrence of liabilities.

Assets were driven by:

  • $10.9b withdrawal of deposits
  • $4.9b disposal of short-term debt securities

Liabilities were driven by:

  • $9.7b issuance of bonds
  • $7.9b in loan borrowings 

The national general government drew down on its deposits to fund increased social benefits paid to households and the payment of tax returns. Bond issuance remains below the rate of issuance during the pandemic, reflecting the improvement in the national general government’s balance sheet. State and territory governments borrowed funds from their respective central borrowing authorities to fund investment into health and transport infrastructure.

Demand for credit

Demand for credit table

Demand for credit was $90.2b in the September quarter, of which:

  • other private non-financial corporations borrowed $46.5b
  • general government borrowed $18.5b
  • households borrowed $13.9b

Credit market outstanding increased by $49.2b, comprised of demand for credit and partly offset by revaluation losses of $40.9b. Holding losses on the shares of other private non-financial corporations were $40.0b, in line with a decrease in equity prices on the Australian Securities Exchange (ASX). Higher bond yields also resulted in holding losses on Commonwealth government bonds of $7.7b.

Other private non-financial corporations

Business credit growth was driven by investment in private engineering construction projects. Elevated export revenue was also reinvested in foreign-owned resource companies to grow share capital. Business financing activity comprised:

  • equity raising of $27.0b
  • loan borrowings of $21.2b
  • and partly offset by $4.3b net maturity of corporate bonds

Households

Housing credit growth slowed in the September quarter as housing market activity moderated, in a high interest rate environment where house prices are elevated and borrowing capacity remains constrained. Households borrowed:

  • $14.6b in long term loans
  • and repaid $618m in short term loans

General government

Public sector debt expanded as the Commonwealth government's funding requirements rose in the September quarter in line with increased spending on social benefits to household. State government demand for credit continues to be driven by investment in health and transport infrastructure. The government financed its operations through:

  • $9.4b of bonds issued by national general government 
  • $8.2b in loan borrowings by state and local general governments

"Other" includes private non-financial investment funds and public non-financial corporations.

Households

Balance sheet

Financial assets

Liabilities

Household wealth grew 2.3% ($339.4b) to $15,305.3b at the end of the September quarter. The increase in net worth was driven by strength in the housing market.

Non-financial assets

Non-financial assets owned by households increased by 2.5% ($278.7b), driven by: 

  • $250.4b rise in residential land and dwellings

House prices continued to increase despite rising interest rates, as supply is still unable to meet current demand.

Financial assets

Financial assets of households increased by 1.3% ($87.1b), with a:

  • $53.1b rise in currency and deposits
  • $33.8b rise in shares and other equity 
  • $5.0b rise in superannuation reserves

Total deposits increased by 3.4% driven by seasonal tax refunds. Transferable deposit account balances rose $24.7b, including offset accounts which rose $16.5b. Other deposit accounts (which include term deposit and savings accounts) rose $28.1b.

Shares and other equity increased by 2.6%, driven by equity overseas as the Australian Dollar depreciated against many of the major international currencies.

Total superannuation reserves increased by 0.1% this quarter, as contributions to super outweighed losses in revaluation.

Liabilities

Household liabilities increased by 0.9% ($26.4b), with a: 

  • $17.5b rise in housing loans
  • $618m drop in short term loans

The growth in housing loans was the weakest since September quarter 2020, as growth in owner-occupier and investor loans remained subdued due to elevated interest rates.

Private non-financial corporations

Financial assets

Liabilities

Other private non-financial corporations demand for credit

Other private non-financial corporations demand for credit of $46.5b was driven by:

  • equity raising of $27.0b, and
  • $21.2b of loan borrowings.

Partly offset by:

  • $4.3b of bond maturities.

The debt to equity ratio (adjusted for price changes) increased to 0.61. This reflects private non-financial corporations increased preference for debt as well as revaluation losses on equities.

Growth in firm’s debt was driven by loan borrowing to fund investment in engineering construction. Firms’ equity fell, driven by revaluation losses on equities on the listed share market. This was partly offset by equity raising of $30.5b.

Financial corporations

Financial assets and liabilities

Authorised deposit-taking institutions (ADIs)

Financial assets

Liabilities

Financial assets of ADIs rose $114.8b, reflecting

  • a $94.8b increase in bonds;
  • a $47.9b increase in derivatives; and 
  • a $32.6b increase in loans. 

This was offset by a $53.1b fall in deposits.
The First Allowance of the The Reserve Bank of Australia's Term Funding Facility (TFF) matured on 30th September 2023. ADIs used their exchange settlement accounts to repay the TFF, driving the fall in their deposits. The majority of funding was secured with residential mortgage-backed securities, which have now shifted back on to the balance sheet of ADIs, resulting in a $74.6b increase in ADIs holdings of bonds issued by securitisers. To ensure ADIs continued to meet their liquidity requirements without this TFF support, they acquired $20.7b of semi-government bonds. 

Liabilities of ADIs grew $113.7b, with:

  • a $47.1b increase in derivatives; and
  • a $38.6b increase in deposits

ADIs also continued to return to traditional means of funding, issuing:

  • $14.0b worth on bonds domestically; and
  • $9.3b of one name paper offshore

Pension (superannuation) funds

Financial assets

Liabilities

Total financial assets of pension (superannuation funds) increased by 0.2% ($5.5b), with a:

  • $10.5b increase in bonds 
  • $5.7b increase in deposits
  • Offset by $13.4b decrease in equities.

Pension funds acquired $9.4b in bonds and $14.0b in shares and other equity this quarter. Shares and other equity experienced revaluation losses of $27.4b as domestic and overseas share prices fell during the quarter. Pension funds acquired bonds issued by rest of world and the Commonwealth government this quarter. Pension funds also took advantage of higher interest rates, placing $5.1b in deposit accounts.
 

Government

National general government financial assets

National general government liabilities

State and local general government financial assets

State and local general government liabilities

General government

General government (national, and state and local) were net borrowers of $25.4b. This was driven by a:

  • $10.9b withdrawal of deposit assets
  • $9.7b net issuance of bond liabilities
  • $7.9b borrowing of loans

National general government were net borrowers of $6.1b this quarter. The national general government's position was mainly driven by a:

  • $9.5b net issuance of bond liabilities
  • $5.0b disposal of one name paper assets
  • $3.8b withdrawal of deposit assets

While net bond issuance was the largest contributor to the net borrowing position of national general government, the total value of treasury bonds outstanding increased by only $1.7b. The market value impact of treasury bond yield rises partly offset the additional issuance.

State and local general government were net borrowers of $19.3b this quarter. The state and local general government's position was mainly driven by a:

  • $8.1b borrowing of loans
  • $7.1b withdrawal of deposit assets

Loan liabilities of state and local general governments continued to grow as state governments obtain funding for transport infrastructure and operating expenses. State and local general government also drew down on deposits this quarter, following a build up of deposits during the previous two quarters.

(a) "Other" includes gold and special drawing rights, currency, bills of exchange, derivatives, shares and equity, unfunded superannuation and accounts payable/receivable.

Capital investment

Figures in the capital investment section are in seasonally adjusted current prices.

Net lending (+) / borrowing (-)

Australia returned to a net borrowing position of $0.4b this quarter, following a net lending position of $7.5b in the previous quarter.
This was driven by a:

  • $4.7b increase in change in inventories
  • $4.0b decrease in national net savings
  • $2.8b increase in gross fixed capital formation

National lending as a proportion of GDP declined to a borrowing position this quarter driven by a fall in net savings and a rise in change in inventories.

  • Financial corporations' net lending decreased by $0.2b to $11.9b.
  • Non-financial corporations' net borrowing increased by $12.8b to $13.1b.
  • General government net borrowing decreased by $8.1b to $3.0b.
  • Households' net lending decreased by $4.5b to a net borrowing position of $1.4b.
     

Notable drivers were:

  • Financial corporations' net lending was driven by a decrease in net savings and an increase in gross fixed capital formation.
  • Non-financial corporations' net borrowing was driven by a decrease in net savings and an increase in change in inventories.
  • General government net borrowing was driven by an increase in net savings.
  • Households' net borrowing was driven by a decrease in net savings.
     

Capital Investment

National capital investment increased to 24.4% as a proportion of GDP, while increasing 1.8% in current price seasonally adjusted terms. 

Relative to GDP: 

  • Household capital investment decreased to 7.9%
  • Non-financial corporations' capital investment remained at 11.8%
  • Financial corporations' capital investment remained at 0.5%
  • General government capital investment decreased to 4.1%


In current price seasonally adjusted terms:

  • Non-financial corporations' capital investment increased, driven by an increase in public non-financial corporations
  • General government capital investment decreased, driven by decreases in national and state and local general government

Data downloads

Time series spreadsheets

Data files

Previous catalogue number

This release previously used catalogue number 5232.0

Revisions and changes

Revisions in this issue

There have been revisions to previously published aggregates due to:

  • Quality assurance reviews affecting the published aggregates after September quarter 2021, in addition to amendments to data collected in the ABS Survey of Financial Information, ABS Survey of International Investment and to data derived from Australian Prudential Regulation Authority (APRA) administrative data sets.
  • Incorporation of revisions from the Australian System of National Accounts throughout the time series

Note

The adoption of the AASB 17 accounting standard for insurance contracts by the insurance industry has resulted in changes to reported data. Consequently, some of the estimates for life and non-life insurance corporations in the September quarter 2023 have been modelled. While these series continue to be published, users are advised to apply caution. In line with the ABS implementation strategy, the impacts of the new accounting standard to reported data will be quarantined until further analysis is completed.

Post release changes

21 December 2023 - net borrowing/lending figures in Key statistics was corrected. This error was exclusive to the commentary, no data in content has been affected

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