CHANGES TO INTERNATIONAL STANDARDS
The international framework for economic statistics is centred around two key documents, the System of National Accounts, 1993 (SNA93) and the fifth edition of the Balance of Payments Manual (BPM5), both of which were released in 1993. Since the release of these key standards, a number of new economic phenomena has arisen or assumed greater importance as economies continue to develop in their complexity. In response to this, relevant international organisations and a range of national statistical agencies, including the ABS, have reviewed a range of conceptual and measurement issues that were either not clarified completely at the time of the release of SNA93 and BPM5, or have emerged as important measurement issues since that time. These issues are described in the Information Paper: Introduction of revised international standards in ABS economic statistics in 2009, 2007 (cat. no. 5310.0.55.001) released 6 September 2007.
The international standards for national and international accounts were updated concurrently and the standards are compatible. The new standards are presented in the System of National Accounts, 2008 (SNA08) and the Balance of Payments and International Investment Position Manual, sixth edition (BPM6). The other major changes to the Australian System of National Accounts (ASNA) are due to the implementation of the Australian and New Zealand Standard Industrial Classification, 2006 (ANZSIC06) and changes brought about to the Standard Economic Sector Classification of Australia, 2008 (SESCA08).
The revised international standards have changed the measurement of a number of components of the ASNA, though there has been no major change to the structure of the accounts. The main changes are:
- Introduction of Research and Development as capital formation;
- Capitalisation of Expenditure on Defence Weapons Platforms; and
- The inclusion of reinvested earnings of investment funds.
A number of other changes are included and will be mentioned later in this paper. There are a number of changes stated in the SNA08 that the ABS is not implementing. These are:
- Basic Prices defined according to the System of National Accounts, 1968 (SNA68) concepts will continue to be applied through the Input-Output tables. The ABS intends to move to the SNA68 definition throughout other economic outputs over the coming years, as described in the Information Paper: Introduction of revised international standards in ABS economic statistics in 2009, 2007 (cat. no. 5310.0.55.001).
- Repurchase Agreements where the ABS will continue to treat repurchase agreements as security trades rather than the treatment continued in the standards, which is as a loan.
- Recording of Interest on Debt Securities where the ABS will continue to measure interest in accordance with the creditor principle (interest flows are calculated with reference to market yields on the market value of the debt securities in question) and not the treatment continued in the standards, the debtor principle (interest flows calculated with reference to contractual or "coupon" rates on the nominal value of the debt securities in question).
- Ancillary Units (Holding Companies) where the ABS is proposing to maintain its current practice, which is in line with the spirit of the recommendations but deviates in the treatment of holding companies.
- Financial Instrument Classification where there are no plans to compile separate markets for shares and units. This detail is largely covered (implicitly) by the changes to the sectoral classifications within SESCA08.
- Reclassifications for Transactions between non-residents, as the ABS considers that by issuing a tradeable instrument, the issuer is implicitly a counterparty to any secondary trading in the instrument and that a transaction should be recorded between the vendor and the issuer extinguishing the position, and a second transaction between the purchaser and the issuer creating the position. The ABS will therefore not treat the exchange as a reclassification.
Investigation is continuing into the estimation of capital services for assets owned by the General Government sector. The results of the investigation will be published in an information paper and potentially included in the accounts, initially as a memorandum item.
More information on these areas of non-compliance can be found in the introductory Information paper: Introduction of revised international standards in ABS economic statistics in 2009, 2007
(cat. no. 5310.0.55.001).
In addition, the ABS will incorporate the results of a number of changes that were not included from SNA93 implementation in 1998, including:
- implementation of orchard growth in the capital and production accounts which is generally included in the category 'Cultivated biological resources'; and
- moving Financial Auxiliaries to the financial sector.
The ABS is incorporating changes arising from SNA into Australian Standards and Classifications. The changes to SNA08 have introduced some new elements to the Standard Economic Sector Classification for Australia, 2008 (SESCA08). The change is mainly from the introduction of Money Market Funds and Non-Money Market Funds in the Standard Institutional Sector Classification for Australia (SISCA08). Further information can be found in Discussion Paper: Proposed Standard Economic Sector Classifications of Australia (SESCA), 2008
(cat. no. 1218.0.55.001).