Australian Bureau of Statistics
5256.0 - Australian National Accounts: Non-Profit Institutions Satellite Account, 1999-2000
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 28/11/2002
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Non-profit institutions play an important role in the provision of welfare, social and other services in Australia. The Australian Bureau of Statistics (ABS) has developed a non-profit institutions satellite account for Australia for the year 1999-2000 in response to demand for information on the economic impact of non-profit institutions.
The notion of a satellite account was conceived in the System of National Accounts 1993 to expand the core national accounts for selected areas of interest, while using relevant concepts and structures of the core national accounts. A non-profit institutions satellite account involves the identification of non-profit activities within the national accounting framework so that a comprehensive set of economic data on non-profit institutions can be compiled.
The concepts and methods used in the Australian non-profit institutions satellite account are based on international standards described in the Handbook on Nonprofit Institutions in the System of National Accounts. The Handbook is intended to facilitate international collection and comparison of information on non-profit institutions, and it is the culmination of many years intensive effort by partners in the Global Non-profit Information Systems Project.
This publication represents the first ABS estimates of the direct contribution that non-profit institutions make to the Australian economy and, in particular, the contribution of non-profit institutions to key macro-economic variables such as gross domestic product. As this satellite account is an integrated set of statistics on non-profit institutions within the internationally recognised System of National Accounts, it provides a valuable policy and research tool with a wide range of applications.
The Australian Bureau of Statistics welcomes user comments on this satellite account.
Comments can be directed to:
National Accounts Research
Australian Bureau of Statistics
Locked Bag 10
Belconnen, ACT, 2616.
BACKGROUND TO THE NPI SATELLITE ACCOUNT
There has been increasing interest in recent years, both in Australia and internationally, in the set of entities or institutions known variously as 'non-profit', 'voluntary' or 'non-government' organisations. In order to differentiate them from corporations and government institutional units, these entities are referred to as 'non-profit institutions' (NPIs) in the national accounts. The scale and number of such organisations has been increasing and they have taken on expanded roles as governments seek to provide social and other services in more flexible, cost-effective ways. At the same time, economic statistics covering non-profit organisations have been quite limited.
The economic value of services provided by NPIs is already included in the national accounts. It is implicitly included in key economic aggregates such as gross domestic product and household final consumption expenditure. In recognition of the growing importance of NPIs, the latest edition of the international standard for national accounting, System of National Accounts 1993 (SNA93), recommends that NPIs serving households be separately identified as an institutional sector in its own right. The ABS intends to work towards that objective, and this satellite account is part of that process.
The Australian Non-Profit Data Project (ANDP) was established in 1997 as a collaborative research project between the Centre for Australian Community Organisations at the University of Technology, Sydney, and the Australian Bureau of Statistics (ABS), to map for the first time the scale and contribution of Australia’s non-profit sector. The results from this project, mostly in respect of 1995-96, were published by Lyons and Hocking in 2000 in Dimensions of Australia’s Third Sector. Information published included data on the number and type of such organisations, their employment and numbers of volunteers, their expenditures and sources of revenue. The value of the contribution of NPIs to gross domestic product (GDP) was also calculated. A broad comparison of the results of this project for 1995-96 with the current satellite account for 1999-2000 is included as Appendix 2.
In 2000, the ABS agreed to participate in a pilot test of the Handbook on Nonprofit Institutions in the System of National Accounts (the Handbook), as part of the Global Nonprofit Institutions Systems (GNIS) project. The GNIS project was designed to develop and implement systems to provide a better and fuller representation of the non-profit sector in international and national data systems. The project is directed by the Centre for Civil Society Studies at the Johns Hopkins University (JHU), and the Centre for Civil Society at the London School of Economics. The Handbook was prepared in close collaboration between JHU and the Economic Statistics Branch of the United Nations Statistical Division.
The pilot test was designed to test definitions, classifications and accounting structures to derive empirical estimates of the contribution of NPIs to the overall economy. The ABS and a number of statistical agencies from other countries submitted reports of the pilot test, including estimates of key economic aggregates for NPIs. On completion of work for the pilot test, the ABS decided to take its involvement in the GNIS project a step further and produce and publish a NPI satellite account for Australia for the reference year 1999-2000.
Continuing community interest in the area of NPIs has sparked several initiatives that were drawn upon in the development of this satellite account. The Treasury Inquiry into the Definition of Charities looked at a range of issues impacting on charities-a subset of NPIs. The report of the Inquiry was released in July 2001. ABS has released three publications that provided valuable additional information for compiling the estimates in this satellite account. Voluntary Work, Australia, 2000 (cat. no. 4441.0) provided a range of data on volunteer services. Community Services, Australia, 1999-2000 (cat. no. 8696.0) and Sports Industries, Australia 2000-01 (cat. no. 8686.0 ), provided detailed data on an important range of services provided by NPIs.
ANALYSIS OF RESULTS
Non-profit institutions (NPIs) have the following characteristics: they are organisations, they are not-for-profit and non-profit-distributing, they are institutionally separate from government, are self-governing, and non-compulsory. In this satellite account NPIs that are classified to the general government sector (the most notable being universities and public hospitals operated by religious orders) have been excluded, even where they are self-governing and institutionally separate from government. NPIs that operate in the commercial sphere and permit the distribution of assets to members in the event that they are wound up (NPIs in the finance and insurance industry and trading co-operatives) have also been excluded. The scope of the NPI satellite account is important, as it will affect the size of the sector.
The direct value that NPIs add to the economy is measured by NPI GDP and NPI gross value added (GVA). NPIs accounted for $20.8 billion or 3.3% of total GDP in 1999-2000. When imputed wages for volunteer services are included in GDP, the NPI contribution increases to $29.7 billion or 4.7% of GDP (adjusted to include the imputed wages). NPI gross value added contributed 3.4% to industry gross value added in 1999-2000, increasing to 4.9% when the value of volunteer services are included. Gross value added measures the value of production exclusive of product taxes and is the theoretically preferred measure of a sector's value of production.
NPIs also contribute significantly to employment, accounting for 6.8% of total employed persons in 1999-2000.
NPI GROSS VALUE ADDED
NPI gross value added measures the value of output of goods and services produced by NPIs less the cost of goods and services used up in the process of production. NPI gross value added was $19.7 billion in 1999-2000. When the value added of volunteer services ($8.9 billion) is added, total adjusted gross value added for NPIs increases to $28.6 billion. Volunteer services contributed 31% of the total adjusted NPI gross value added.
With volunteering services included, education and research NPIs made the largest contribution to NPI adjusted gross value added (25%), followed by culture and recreation (23%) and social services (22%). Excluding volunteering services, education and research NPIs generated 31% of NPI gross value added, whilst culture and recreation NPIs contributed 22%. Social service NPIs made the largest contribution to volunteer services, followed by 'other' NPIs. Other NPIs include those that are religious congregations and associations, political organisations, and those involved in environmental and animal protection, advocacy, and international assistance.
Although NPIs are not an industry (they are institutional units) the contribution of NPIs to the economy can be compared against traditional industries as a point of reference. The NPI contribution of 3.4% to gross value added in 1999-2000 is greater than the contribution made by the communications; electricity, gas and water; accommodation, cafes and restaurants; personal and other services; and cultural and recreational services industries. NPI gross value added is only slightly less than agriculture, forestry and fishing (3.5%). If an imputation is also made for the value of services provided by volunteers, the adjusted gross value added of NPIs (4.9%) is greater than that for government administration and defence (4.1%) and mining (4.6%).
NPIs make a large contribution to the gross value added of service industries but a negligible or zero contribution to the gross value added of primary and goods producing industries, where for profit corporations and unincorporated enterprises are dominant. The industries where NPIs contribute 10% or more to total industry gross value added are accommodation, cafes and restaurants (22%), education (22%), health and community services (18%), cultural and recreational services (12%) and personal and other services (14%).
NPI INCOME AND EXPENSES
Total NPI income in 1999-2000 was $33.5 billion. Most NPI income was generated through sales of goods and services (58%). Sales of goods and services include school fees, hospital patient fees, gambling and hospitality income of registered clubs, business sponsorships, membership dues received by business and professional associations, and sales of goods. Transfers from other sectors was 40% of total income. Transfers were received from governments (75%), households (21%) and corporations (4%). Transfers from households and corporations includes receipts of donations and fundraising, and membership dues received from households (including union dues). The remaining 2% of income came from interest earned on financial assets less interest paid on liabilities.
NPI expenses were $32.8 billion in 1999-2000. Compensation of employees (wages, salaries, superannuation and workers compensation) was the biggest expense for NPIs (51%). This was followed by purchases of goods and services (35%).
NPIs employed 604 000 persons in 1999-2000, representing 6.8% of total employed persons in Australia. The social services sector was the highest employer representing 26% of the total, followed by education and research which employed 24% of total NPI employees.
A volunteer is someone who willingly gives unpaid help, in the form of time, service or skills, through an organisation or group. 4.4 million Australians over the age of 18 participated in some form of volunteer work with NPI or government organisations during 1999-2000. The number of volunteer involvements is greater than the number of volunteers, as some individuals are involved with a number of the same or different types of organisations. There were 6.5 million involvements in 1999-2000. Of this, 5.1 million involvements were estimated to be with non-government NPIs.
The social services activity accounted for the greatest number of volunteer involvements with NPIs (29%). This was followed by culture and recreation NPIs (26%), and 'other' NPIs (22%).
There were 558 million hours worked in NPIs by volunteers during 1999-2000, equating to 285 thousand full-time equivalent persons. The social services activity accounted for 31% of volunteer hours and full-time equivalent persons, followed by 'other' NPIs (27%) and culture and recreation (24%).
Of full-time equivalent persons in volunteer work, 54% were female. Males contributed more volunteer labour to culture and recreation and business and professional associations and unions than females.
The number of hours worked and average hourly ordinary time earnings in selected occupations in each sector have been used to impute the value of volunteer work with NPIs. In 1999-2000 the value of imputed volunteer wages was $8.9 billion. This substantially increases the output and gross value added of NPIs compared with that conventionally measured in the national accounts. As a percentage of NPI adjusted industry gross value added, volunteer services contributed 53% to 'other' NPIs and 45% to social services.
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This page last updated 17 September 2009