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1301.0 - Year Book Australia, 2009–10  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 04/06/2010   
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Contents >> National accounts >> National income, expenditure and product accounts

NATIONAL INCOME, EXPENDITURE AND PRODUCT ACCOUNTS

The Australian national income, expenditure and product accounts are compiled and published each quarter, in ABS Australian National Accounts: National Income, Expenditure and Product (5206.0), and in greater detail once a year, in ABS Australian System of National Accounts (5204.0).


GDP account

The GDP account indicates changes in Australian economic activity over time. Table 30.3 shows annual time series from 2003-04 to 2007-08. Table 30.4 shows expenditure on GDP in volume terms.

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 3.7% in 2007-08. This was higher than the 3.3% recorded in the previous year.

30.3 GDP ACCOUNT, Current prices

2003-04
2004-05
2005-06
2006-07
2007-08
$m
$m
$m
$m
$m

Final consumption expenditure
General government
150 378
162 499
173 139
186 205
200 129
Households
492 681
521 028
547 458
584 875
626 793
Total final consumption expenditure
643 059
683 527
720 597
771 080
826 921
Gross fixed capital formation
Private
183 059
197 385
220 823
238 948
269 851
Public
30 701
34 354
39 939
45 758
50 201
Total gross fixed capital formation
213 760
231 739
260 762
284 707
320 052
Changes in inventories
6 036
5 000
612
2 652
4 694
Gross national expenditure
862 854
920 266
981 972
1 058 438
1 151 668
Exports of goods and services
147 219
167 562
196 274
215 695
234 862
less Imports of goods and services
168 714
190 188
210 794
228 452
254 783
Statistical discrepancy(a)
-
-
-
-
425
Gross domestic product
841 351
897 642
967 454
1 045 674
1 132 172
Compensation of employees
400 124
431 118
464 511
501 011
539 020
Gross operating surplus
264 078
284 467
312 417
338 626
373 684
Gross mixed income
78 358
80 260
83 064
93 151
97 495
Total factor income
742 560
795 845
859 992
932 788
1 010 199
Taxes less subsidies on production and imports
98 791
101 800
107 458
112 886
121 672
Statistical discrepancy(b)
-
-
-
-
301
Gross domestic product
841 351
897 642
967 454
1 045 674
1 132 172

- nil or rounded to zero (including null cells)
(a) Expenditure-based.
(b) Income-based.
Source: ABS Australian System of National Accounts, 2007–08 (5204.0).


30.4 EXPENDITURE ON GDP, Volume measures(a)(b)

2003-04
2004-05
2005-06
2006-07
2007-08
$m
$m
$m
$m
$m

Final consumption expenditure
General government
170 057
176 447
180 839
186 205
192 582
Households
524 580
547 884
562 093
584 875
606 435
Total final consumption expenditure
694 560
724 303
742 908
771 080
799 017
Gross fixed capital formation
Private
198 166
209 562
227 868
238 948
263 571
Public
35 314
38 400
42 042
45 758
48 666
Total gross fixed capital formation
233 564
247 997
269 936
284 707
312 237
Domestic final demand
928 276
972 418
1 012 854
1 055 785
1 111 254
Changes in inventories
6 209
6 102
2 298
2 652
4 346
Gross national expenditure
933 984
977 468
1 014 831
1 058 437
1 115 600
Exports of goods and services
197 382
203 407
207 886
215 695
225 345
less Imports of goods and services
173 993
195 124
209 246
228 452
257 374
Statistical discrepancy(c)
-
-
-
-
585
Gross domestic product
956 017
982 786
1 012 269
1 045 674
1 084 156

- nil or rounded to zero (including null cells)
(a) Reference year is 2006–07.
(b) Volume measures for years other than 2006–07 and 2007–08 are not additive.
(c) Expenditure-based.
Source: ABS Australian System of National Accounts, 2007–08 (5204.0).


The GDP 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 30.5 and 30.6 show how the shares of total factor income accruing to wages 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 wages share of total factor income was 62.4% in 1974-75. The wages share in 2007-08 was 53.4%, slightly lower than the previous year (53.7%), and one of the lowest levels recorded in time series presented. The profits share of total factor income has been growing steadily since 1998-99. In 2007-08 profits share was 26.5%, the highest share recorded.

30.5 Wages share of total factor income
Graph: 30.5 Wages share of total factor income


30.6 Profits share of total factor income
Graph: 30.6 Profits share of total factor income



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 which is not spent in this way is saving. Table 30.7 shows annual time series from 2003-04 to 2007-08.

Graph 30.8 shows net saving by institutional sector as a proportion of GDP for the years 1965-66 to 2007-08. Household net saving as a percentage of GDP generally fluctuated between 6% and 8% between 1965-66 and 1971-72. It then rose to a peak of 11.5% in 1974-75. The series then gradually decreased, eventually reaching its lowest at -1.8% of GDP in 2003-04. Household net saving as a proportion of GDP remained negative until 2004-05 and since then has turned positive and in 2007-08 it was 0.4% of GDP, and household income exceeded consumption by $4.0 billion (b) (table 30.9).

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 has remained positive since 1997-98. In 2007-08 general government net saving was positive at 2.9% of GDP ($32.9b). In 2007-08 net saving of non-financial corporations was 0.1% of GDP ($0.6b). Net saving of financial corporations has been positive at about 1% to 2% of GDP for virtually all of its history. In 2007-08 net saving of financial corporations was 3.8% of GDP ($43.0b).

30.7 NATIONAL INCOME ACCOUNT, Current prices

2003-04
2004-05
2005-06
2006-07
2007-08
$m
$m
$m
$m
$m

Income

Compensation of employees
400 124
431 118
464 511
501 011
539 020
Gross operating surplus
264 078
284 467
312 417
338 626
373 684
Gross mixed income
78 358
80 260
83 064
93 151
97 495
Taxes less subsidies on production and imports
98 791
101 800
107 458
112 886
121 672
Net primary income from non-residents
-23 840
-33 330
-37 670
-45 903
-50 197
Gross national income
817 511
864 315
929 780
999 771
1 081 674
Net secondary income from non-residents
-255
-369
-649
-296
-141
Gross disposable income
817 256
863 946
929 131
999 475
1 081 533

Use of gross disposable income

Final consumption expenditure
General government
150 378
162 499
173 139
186 205
200 129
Households
492 681
521 028
547 458
584 875
626 793
Total final consumption expenditure
643 059
683 527
720 597
771 080
826 921
Net saving(a)
45 847
45 491
62 407
69 293
82 306
Consumption of fixed capital
128 350
134 927
146 126
159 102
172 306
Total use of gross disposable income
817 256
863 946
929 131
999 475
1 081 533

(a) Net saving is derived as a balancing item.
Source: ABS Australian System of National Accounts, 2007–08 (5204.0).

30.8 Net saving, Releative to GDP
Graph: 30.8 Net saving, Releative to GDP



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. If, as is currently the case for Australia, the nation's saving and consumption of fixed capital are not sufficient to pay for all the fixed capital needed for Australian production, 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 30.9 shows the annual time series from 2003-04 to 2007-08.

Graph 30.10 shows gross fixed capital formation (investment) by institutional sector as a proportion of GDP. Investment by non-financial corporations generally fell during the late 1970's but stablised in the 1980s and 1990s (it has generally been above 10% of GDP). In 2007-08 investment by non-financial corporations was 14.7% of GDP. Household investment as a proportion of GDP remained steady at around 10% of GDP throughout the time series and in 2007-08 the ratio to GDP was 10.3%. General government investment as a proportion of GDP peaked at 4.6% in 1975-76 and 1986-87, and has generally fallen since then to around 2.5% of GDP. It was 2.6% of GDP in 2007-08. The highest ever level of Financial corporations investment, expressed as a proportion of GDP, was recorded in 1989-90 (2.0%). It has generally fallen since and was 0.7% of GDP in 2007-08.

Graph 30.11 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.

30.9 NATIONAL CAPITAL ACCOUNT, Current prices

2003-04
2004-05
2005-06
2006-07
2007-08
$m
$m
$m
$m
$m

Net saving
Non-financial corporations
23 011
14 016
11 689
4 882
609
Financial corporations
21 660
22 205
21 033
24 277
42 975
General government
16 546
21 094
29 522
28 651
32 894
Households
-15 380
-10 497
138
11 093
4 007
Total net saving
45 847
45 491
62 407
69 293
82 306
Consumption of fixed capital
128 350
134 927
146 126
159 102
172 306
Net capital transfers receivable from non-residents
1 444
1 523
1 729
1 960
2 250
Gross saving and capital transfers
175 641
181 942
210 263
230 355
256 862
Gross fixed capital formation
Private
183 059
197 385
220 823
238 948
269 851
Public corporations
11 957
14 038
16 941
18 756
20 675
General government
18 744
20 316
22 999
27 002
29 526
Total gross fixed capital formation
213 760
231 739
260 762
284 707
320 052
Changes in inventories
Private non-farm
6 204
4 761
-386
2 923
4 625
Farm and public authorities
-168
239
998
-271
69
Total changes in inventories
6 036
5 000
612
2 652
4 694
Acquisitions less disposals of non-produced non-financial assets
72
-71
3
-423
-8
Statistical discrepancy(a)
-
-
-
-
124
Net lending to non-residents
-44 218
-54 731
-51 113
-56 573
-68 001
Total capital accumulation and net lending
175 641
181 942
210 263
230 355
256 862

- nil or rounded to zero (including null cells)
(a) Expenditure-based discrepancy less income-based discrepancy.
Source: ABS Australian System of National Accounts, 2007–08 (5204.0).

30.10 Investment, Relative to GDP
Graph: 30.10 Investment, Relative to GDP


30.11 Net lending, Relative to GDP
Graph: 30.11 Net lending, Relative to GDP


The household sector has been a net lender for most years. As a proportion of GDP, net lending by households peaked in 1974-75 at 8.4%. Since then it has trended downwards and the household sector changed from a net lender to a net borrower in 1988-89,1994-95 and 1997-98. Since 1997-98 it has been a net borrower and in 2007-08 household net borrowing was 4.1%. Non-financial corporations have been net borrowers over the entire period 1965-66 to 2007-08 (except for 1993-94), and the amounts borrowed have fluctuated significantly from year to year. As a proportion of GDP, their net borrowing was 7.4% in 2007-08.

In 2007-08 net lending of financial corporations represented 3.7% of GDP, the highest recorded level. After recording a record level of borrowing as a proportion of GDP in 1992-93 (5.7%), general government borrowing steadily declined. From 1997-98 to 1999-2000 the sector was a net lender and in 2000-01 general government was a net borrower before returning to being a net lender from 2001-02 to 2007-08. In 2007-08 general government net lending represented 1.6% of GDP.


External account

The external account is derived from the detailed balance of payments current and capital accounts (see the International accounts and trade chapter). 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 30.12 shows the external account for the last five years.

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. 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 2007-08 was 6.0%, up from 5.4% in 2006-07. Graph 30.13 shows net lending to non-residents as a proportion of GDP since 1965-66.
30.12 EXTERNAL ACCOUNT: Current prices

2003-04
2004-05
2005-06
2006-07
2007-08
$m
$m
$m
$m
$m

Income Account

Income of non-residents
Imports of goods and services
168 714
190 188
210 794
228 452
254 783
Primary income receivable
Compensation of employees
1 906
1 331
1 563
1 863
2 302
Property income receivable
38 935
53 740
62 581
80 028
88 524
Total primary income receivable
40 841
55 071
64 144
81 891
90 826
Secondary income receivable
4 446
4 637
5 251
5 451
5 400
Total income of non-residents
214 001
249 896
280 189
315 794
351 009
Uses of income of non-residents
Exports of goods and services
147 219
167 562
196 274
215 695
234 862
Primary income payable
Compensation of employees
1 024
1 127
1 220
1 309
1 382
Property income payable
15 977
20 614
25 254
34 679
39 247
Total primary income payable
17 001
21 741
26 474
35 988
40 629
Secondary income payable
4 191
4 268
4 602
5 155
5 259
Balance on external income account
45 590
56 325
52 839
58 956
70 259
Total use of income of non-residents
214 001
249 896
280 189
315 794
351 009

Capital Account

Balance on external income account
45 590
56 325
52 839
58 956
70 259
Capital transfers receivable
1 127
1 151
944
1 035
1 132
less Capital transfers payable
2 571
2 674
2 673
2 995
3 382
Total net capital transfers
-1 444
-1 523
-1 729
-1 960
-2 250
Gross saving and capital transfers
44 146
54 802
51 110
56 996
68 009
Acquisitions less disposals of non-produced non-financial assets
-72
71
-3
423
8
Net lending (+) / net borrowing (-)
44 218
54 731
51 113
56 573
68 001
Total capital accumulation and net lending (+) / net borrowing (-)
44 146
54 802
51 110
56 996
68 009

Source: ABS Australian System of National Accounts, 2007–08 (5204.0).

30.13 Net lending to overseas, Relative to GDP
Graph: 30.13 Net lending to overseas, Relative to GDP


30.14 Exports and Imports, Relative to GDP
Graph: 30.14 Exports and Imports, Relative to GDP


The growing importance of international trade to the Australian economy is illustrated by graph 30.14 which shows the ratios of exports and imports of goods and services to GDP in current prices since 1965-66. In 2007-08 the imports ratio was 22.5% and the exports ratio was 20.7%. Since 2000-01 imports increased 91.8.% in volume terms compared with a 15.0% growth in volume of exports.




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