Agricultural income is the income accruing from agricultural production during an accounting period. It is equal to total agricultural factor income less consumption of fixed capital, compensation of employees, and net rent and interest payments. The cash income for a year may be substantially different from this because of time lags in payments brought about by the special marketing arrangements for certain agricultural products. Some agricultural products are marketed through marketing boards, co-operatives and other bodies which act as agents for producers. These bodies hold, on the producers' behalf, large stocks of unsold produce for which, in some cases, advance payments are made in the year of delivery while the balance of the ultimate proceeds of sale, less charges, is paid in a subsequent year. Such differences between accrued and actual receipts of agricultural producers are reflected in the item increase in assets with marketing organisations which is a deduction made from agricultural income in order to represent more closely the flow of cash income realised by producers in each year. The amounts deducted are the estimated increases in liabilities of marketing organisations to producers. The marketing organisations for which the dates of delivery of primary produce, sale and payment to producers differ most significantly from each other are the Australian Wheat Board Ltd, the Australian Barley Board and wool selling brokers. The item is measured as the estimated gross selling value of products received by these organisations, plus subsidies, less taxes on production and imports, marketing costs and payments to producers. Any excess of accrued over actual receipts is included in the increase in assets with marketing organisations.
Agricultural production costs (other than compensation of employees and consumption of fixed capital) include all costs incurred in current production, but exclude net rent and interest payable which are treated as appropriations out of operating surplus. In general, marketing costs are as shown in the statistical publication Agriculture, Australia (Cat. no. 7113.0), and represent the difference between the value at the farm or other place of production and at the wholesale markets. Other costs include taxes on production and imports, fertilisers, fuel, costs associated with inter-farm transfers of livestock and fodder, maintenance and other miscellaneous items.
Assets are entities functioning as stores of value and over which ownership rights are enforced by institutional units, individually or collectively, and from which economic benefits may be derived by their owners by holding them, or using them, over a period of time (the economic benefits consist of primary incomes derived from the use of the asset and the value, including possible holding gains/losses, that could be realised by disposing of the asset or terminating it). See also Financial assets; Non-financial assets.
Base period refers to the period that provides the weights for an index. See also Reference period.
Basic prices The basic price is the amount receivable by the producer from the purchaser for a unit of a good or service produced as output minus any tax payable, and plus any subsidy receivable, on that unit as a consequence of its production or sale. It excludes any transport charges invoiced separately by the producer. Output sold at prices that are not economically significant (see also Economically significant prices) is not valued at these prices. Rather, such output is valued at its cost of production. See also Purchasers’ prices.
Benchmarking can have two meanings. The first refers to the practice of extrapolating from a high quality observation for a particular period, or interpolating between two or more high quality observations, using a lesser quality, but more frequent indicator. The second meaning refers to the practice of imputing quarterly values for a statistic by using a quarterly indicator, such that the resulting quarterly estimates are constrained to sum to the annual estimates.
Capital account The capital account records the values of the non-financial assets that are acquired, or disposed of, by resident institutional units by engaging in transactions, and shows the change in net worth due to saving and capital transfers or internal bookkeeping transactions linked to production (changes in inventories and consumption of fixed capital).
Capital productivity estimates are indexes of real GDP per unit of capital services used in production. They have been derived by dividing the index of the chain volume measure of market sector GDP by an index of capital services. The capital productivity indexes reflect not only the contribution of capital to changes in production, but also the contribution by labour and other factors affecting production.
Capital transfers are transactions in which the ownership of an asset (other than cash and inventories) is transferred from one institutional unit to another, in which cash is transferred to enable the recipient to acquire another asset or in which the funds realised by the disposal of another asset are transferred. Examples include general government capital transfers to private schools for the construction of science blocks or libraries, and transfers to charitable organisations for the construction of homes for the aged.
Chain price indexes are obtained by first weighting together elemental price indexes from the previous financial year to the current financial year to produce annual indexes, or to quarters in the current financial year to produce quarterly indexes, where the weights are calculated using expenditure shares of the previous financial year. Second, the resulting aggregate year-to-year or year-to-quarter price indexes are linked (compounded) together to form a time series. Third, the time series is referenced to 100.0 in the reference year. All quarterly indexes are benchmarked to annual indexes.
Chain volume measure For certain types of economic analysis it is useful to examine estimates of the principal flows of goods and services in the economy revalued in such a way as to remove the direct effects of changes in their prices over the period under review. Chain volume measures for GDP and other aggregates are obtained by linking together (compounding) movements in volumes, calculated using the average prices of the previous financial year, and applying the compounded movements to the current price estimates of the reference year.
Changes in inventories represent the difference in value between inventories held at the beginning and end of the reference period by enterprises and general government. For national accounting purposes, physical changes in inventories should be valued at the prices current at the times when the changes occur. For these purposes, changes in inventories are obtained after adjusting the increase in book value of inventories by the inventory valuation adjustment. The need for the latter arises because the changes in the value of inventories as calculated from existing business accounting records do not meet national accounting requirements. The inventory valuation adjustment is the difference between the change in (book) value of inventories and the physical changes valued at current prices. The physical changes at average current quarter prices are calculated by applying average quarterly price indexes to the changes in various categories of inventories in volume terms.
Coefficient table A coefficient (input-output) table records the amount of each product (or the amount of output by each industry) used as input per unit of output of the various products/industries. See also Input-output table; Supply and use tables.
Collective consumption refers to services provided simultaneously to all members of the community or to all members of a particular section of the community, such as all households living in a particular region. Collective services are automatically acquired and consumed by all members of the community, or group of households in question, without any action on their part. Typical examples are public administration and the provision of security, either at a national or local level. Collective services are the ‘public goods’ of economic theory. By their nature, collective services cannot be sold to individuals on the market, and they are financed by government units out of taxation or other incomes. The defining characteristics of collective services are as follows: collective services can be delivered simultaneously to every member of the community or of particular sections of the community, such as those in a particular region; the use of such services is usually passive and does not require the explicit agreement or active participation of all the individuals concerned; and the provision of a collective service to one individual does not reduce the amount available to others in the same community or section of the community. There is no rivalry in acquisition. See also Individual consumption.
Compensation of employees is the total remuneration, in cash or in kind, payable by an enterprise to an employee in return for work done by the employee during the accounting period. It is further classified into two sub-components: wages and salaries; and employers’ social contributions. Compensation of employees is not payable in respect of unpaid work undertaken voluntarily, including the work done by members of a household within an unincorporated enterprise owned by the same household. Compensation of employees excludes any taxes payable by the employer on the wage and salary bill (e.g. payroll tax, fringe benefits tax). See also Employers’ social contributions; Wages and salaries.
Computer software refers to computer programs, program descriptions and supporting materials for both systems and applications software. Included are purchased software and, if the expenditure is large, software developed on own-account. Large expenditures on the purchase, development or extension of computer databases that are expected to be used for more than one year, whether marketed or not, are also included. See also Intangible fixed assets.
Consumption of fixed capital is the value, at current prices, of the reproducible fixed assets used up during a period of account as a result of normal wear and tear, foreseen obsolescence and the normal rate of accidental damage. Unforeseen obsolescence, major catastrophes and the depletion of natural resources are not taken into account.
Cultivated assets include livestock raised for breeding, dairy, wool, etc., and vineyards, orchards and other plantations of trees yielding repeat products that are under the direct control, responsibility and management of institutional units. Immature cultivated assets are excluded unless produced for own use. See also Livestock; Tangible fixed assets; and Vineyards, orchards and other plantations of trees yielding repeat products.
Current taxes on income, wealth, etc. include taxes on the incomes of households or the profits of corporations, and taxes on wealth that are payable regularly every tax assessment period (as distinct from capital taxes that are levied infrequently).
Current transfers are transactions, other than those classified as capital transfers, in which one institutional unit provides a good, service or cash to another unit without receiving from the latter anything of economic value in return.
Current transfers to non-profit institutions are transfers for non-capital purposes to private non-profit institutions serving households, such as hospitals, independent schools, and religious and charitable organisations.
Dividends from public (financial and non-financial) corporations paid to general government represent property income earned by general government on its equity investment in these corporations. They are payable by public corporations from operating surpluses generated through the production process. Included are amounts in the nature of dividends such as transfers of profit, income tax equivalents and wholesale sales tax equivalents.
Dwellings are buildings that are used entirely or primarily as residences, including any associated structures, such as garages, and all permanent fixtures customarily installed in residences. Houseboats, barges, mobile homes and caravans used as principal residences of households are also included, as are historic monuments identified primarily as dwellings. The costs of site clearance and preparation are also included in the value of dwellings. See also Tangible fixed assets.
Economically significant prices are prices which have a significant influence on both the amounts producers are willing to supply and the amounts purchasers wish to buy. See also Basic prices; Purchasers’ prices.
Employees’ social contributions are social contributions payable by employees to private funded social insurance schemes. See also Employers’ contributions to superannuation; Employers’ imputed social contributions; Employers’ social contributions; Social assistance benefits; Social benefits; Social contributions; and Social insurance benefits.
Employers’ contributions to superannuation consist of social contributions payable by employers, for the benefit of their employees, to superannuation funds or other institutional units responsible for the administration and management of social insurance schemes. Although they are paid by the employer directly to the superannuation fund, the payments are made for the benefit of the employees. Accordingly, employees are treated as being remunerated by an amount equal to the value of the social contributions payable. See also Employees’ social contributions; Employers’ imputed social contributions; Employers’ social contributions; Social assistance benefits; Social benefits; Social contributions; and Social insurance benefits.
Employers’ imputed social contributions Some employers provide social benefits directly to their employees, former employees or their dependants from their own resources without involving an insurance enterprise or autonomous pension fund, and without creating a special fund or segregated reserve for the purpose. In the Australian context, employers’ imputed social contributions primarily relate to unfunded superannuation schemes operated by the Commonwealth Government and State Governments. The remuneration imputed for such employees is equal in value to the amount of social contributions that would be needed to secure the de facto entitlements to the social benefits they accumulate. See also Employees’ social contributions; Employers’ contributions to superannuation; Employers’ social contributions; Social assistance benefits; Social benefits; Social contributions; and Social insurance benefits.
Employers’ social contributions are payments by employers which are intended to secure for their employees the entitlement to social benefits should certain events occur, or certain circumstances exist, that may adversely affect their employees’ income or welfare -- namely work-related accidents and retirement.
Entertainment, literary or artistic originals are original films, sound recordings, manuscripts, tapes, models, etc., on which drama performances, radio and television programming, musical performances, sporting events, literary and artistic output, etc. are recorded or embodied. Included are works produced on own-account. In some cases there may be multiple originals (e.g. films). See also Intangible fixed assets.
Entrepreneurial income for a corporation, quasi-corporation, or an institutional unit owning an unincorporated enterprise engaged in market production, is defined as its operating surplus (or mixed income), plus property income receivable on the assets owned by the enterprise, less interest payable on the liabilities of the enterprise and rents payable on land or other tangible non-produced assets rented by the enterprise. See also Gross operating surplus; Gross mixed income of unincorporated enterprises.
Exports of goods and services The value of goods exported and amounts receivable from non-residents for the provision of services by residents.
Final consumption expenditure - general government Net expenditure on goods and services by public authorities, other than those classified as public corporations, which does not result in the creation of fixed assets or inventories or in the acquisition of land and existing buildings or second-hand assets. It comprises expenditure on compensation of employees (other than those charged to capital works, etc.), goods and services (other than fixed assets and inventories) and consumption of fixed capital. Expenditure on repair and maintenance of roads is included. Fees, etc., charged by general government bodies for goods sold and services rendered are offset against purchases. Net expenditure overseas by general government bodies and purchases from public corporations are included. Expenditure on defence assets that are used in a fashion similar to civilian assets is classified as gross fixed capital formation; expenditure on weapons of destruction and weapon delivery systems is classified as final consumption expenditure.
Final consumption expenditure - households Net expenditure on goods and services by persons and expenditure of a current nature by private non-profit institutions serving households. This item excludes expenditures by unincorporated businesses and expenditures on assets by non-profit institutions (included in gross fixed capital formation). Also excluded are maintenance of dwellings (treated as intermediate expenses of private enterprises), but personal expenditure on motor vehicles and other durable goods and the imputed rent of owner-occupied dwellings are included. The value of 'backyard' production (including food produced and consumed on farms) is included in household final consumption expenditure and the payment of wages and salaries in kind (e.g. food and lodging supplied free to employees) is counted in both household income and household final consumption expenditure.
Financial account The financial account records the net acquisition of financial assets and net incurrence of liabilities for all institutional sectors, by type of financial asset.
Financial assets are mostly financial claims. Financial claims entitle the owner to receive a payment, or a series of payments, from an institutional unit to which the owner has provided funds. The exceptions are monetary gold, Special Drawing Rights (SDRs), and shares, which are treated as financial assets even though there is no financial claim on another institutional unit. See also Assets; Insurance technical reserves; Long-term debt securities; Monetary gold and SDRs; Other accounts receivable/payable; Prepayments of premiums and reserves against outstanding claims; Securities other than shares; Shares and other equity; and Short-term debt securities.
Financial derivatives are financial instruments that are linked to a specific financial instrument or indicator or commodity, and which provide for market financial risk in a form that can be traded or otherwise offset in the market. Financial derivatives are used for a number of purposes including risk management, hedging, and speculation. Unlike with debt instruments, no principal amount is advanced to be repaid, and no investment income accrues. The value of the financial derivative derives from the price of the underlying items.
Financial intermediation services indirectly measured (FISIM) Banks and some other financial intermediaries are able to provide services for which they do not charge explicitly, by paying or charging different rates of interest to borrowers and lenders (and to different categories of borrowers and lenders). For example, they may pay lower rates of interest than would otherwise be the case to those who lend them money and charge higher rates of interest to those who borrow from them. The resulting net receipts of interest are used to defray their expenses and provide an operating surplus. This scheme of interest rates avoids the need to charge their customers individually for services provided and leads to the pattern of interest rates observed in practice. However, in this situation, the national accounts must use an indirect measure, namely FISIM, of the value of the services for which the intermediaries do not charge explicitly.
Whenever the production of output is recorded in the national accounts, the use of that output must be explicitly accounted for elsewhere in the accounts. Hence, FISIM must be recorded as being disposed of in one or more of the following ways: as intermediate consumption by enterprises; as final consumption by households or general government; or as exports to non-residents.
Fixed assets are produced assets that are used repeatedly or continuously in production processes for more than one year. Fixed assets consist of tangible and intangible fixed assets. See also Intangible fixed assets; Produced assets; and Tangible fixed assets.
Gross disposable income - households is gross household income less income tax payable, other current taxes on income, wealth etc., consumer debt interest, interest payable by unincorporated enterprises and dwellings owned by persons, net non-life insurance premiums and other current transfers payable by households.
Gross domestic product is the total market value of goods and services produced in Australia within a given period after deducting the cost of goods and services used up in the process of production, but before deducting allowances for the consumption of fixed capital. Thus gross domestic product, as here defined, is 'at market prices'. It is equivalent to gross national expenditure plus exports of goods and services less imports of goods and services. 'Gross farm product' is that part of gross domestic product which derives from production in agriculture and services to agriculture. 'Gross non-farm product' arises from production in all other industries.
Gross fixed capital formation - general government Expenditure on new fixed assets plus net expenditure on second-hand fixed assets, whether for additions or replacements (other than weapons of destruction and weapon delivery systems). Expenditure on new roadworks (or on upgrading existing roads) is included, but expenditure on road repair and maintenance is classified as government final consumption expenditure.
Gross fixed capital formation - private Expenditure on fixed assets broken down into dwellings, other buildings and structures, machinery and equipment, livestock, intangible fixed assets and ownership transfer costs. The machinery and equipment category includes plant, machinery, equipment, vehicles, etc. Expenditure on repair and maintenance of fixed assets is excluded, being chargeable to the production account. Additions to fixed assets are regarded as capital formation. Also included is compensation of employees paid by private enterprise in connection with own-account capital formation. Expenditure on dwellings, other buildings and structures, and machinery and equipment is measured as expenditure on new and second-hand assets, less sales of existing assets. Ownership transfer costs comprise stamp duty, real estate agents' fees and sales commissions, conveyancing fees and miscellaneous government charges.
Gross fixed capital formation - public corporations Expenditure on new fixed assets plus net expenditure on second-hand fixed assets and including both additions and replacements. Also included is compensation of employees paid by public corporations in connection with capital works undertaken on own account.
Gross income - households is the total income, whether in cash or kind, receivable by persons normally resident in Australia. It includes both income in return for productive activity (such as compensation of employees, the gross mixed income of unincorporated enterprises, gross operating surplus on dwellings owned by persons, and property income receivable) and transfers receivable (such as social assistance benefits and non-life insurance claims).
Gross mixed income of unincorporated enterprises is the term reserved for the surplus accruing to owners of unincorporated enterprises from processes of production (as defined for gross operating surplus) before deducting any explicit or implicit interest, rents or other property incomes payable on the financial assets, land or other tangible non-produced assets required to carry on the production and before deducting consumption of fixed capital. The owners, or other members of their households, may work without receiving any wage or salary. Mixed income therefore includes both gross operating surplus for unincorporated enterprises and returns for the proprietors' own labour (akin to wages and salaries). In practice, all unincorporated enterprises owned by households that are not quasi-corporations are deemed to fall into this category, except owner-occupiers in their capacity as producers of housing services for own final consumption, and households employing paid domestic staff (an activity which is deemed to generate zero surplus).
Gross national expenditure is the total expenditure within a given period by Australian residents on final goods and services (i.e. before allowances for goods and services used up during the period in the process of production). It is equivalent to gross domestic product plus imports of goods and services less exports of goods and services.
Gross national disposable income is equivalent to gross national income plus all secondary income in cash or in kind receivable by resident institutional units from the rest of the world, less all secondary income in cash or in kind payable by resident institutional units to the rest of the world.
Gross national income (GNI) is the aggregate value of gross primary incomes for all institutional sectors, including net primary income receivable from non-residents. GNI was formerly called gross national product (GNP).
Gross operating surplus is a measure of the surplus accruing to owners from processes of production before deducting any explicit or implicit interest charges, rents or other property incomes payable on the financial assets, land or other tangible non-produced assets required to carry on the production and before deducting consumption of fixed capital. It excludes the amount described as gross operating surplus - unincorporated enterprises in SNA68, but now referred to as gross mixed income. Gross operating surplus is also calculated for general government, where it equals general government's consumption of fixed capital.
Gross value added is defined as the value of output at basic prices minus the value of intermediate consumption at purchasers' prices. The term is used to describe gross product by industry and by sector. Basic prices valuation of output removes the distortion caused by variations in the incidence of commodity taxes and subsidies across the output of individual industries. See also Intermediate consumption.
Implicit price deflator (IPD) An IPD is obtained by dividing a current price value by its real counterpart (the chain volume measure). When calculated from the major national accounting aggregates, such as gross domestic product, IPDs relate to a broader range of goods and services in the economy than that represented by any of the individual price indexes published by the Australian Bureau of Statistics. Movements in an implicit price deflator reflect both changes in price and changes in the composition of the aggregate for which the deflator is calculated.
Imports of goods and services The value of goods imported and amounts payable to non-residents for the provision of services to residents.
Individual consumption An individual consumption good or service is one that is acquired by a household and used to satisfy the needs and wants of members of that household. Individual goods and services can always be bought and sold on the market, although they may also be provided free, or at prices that are not economically significant, or as transfers in kind. Individual goods and services are essentially ‘private’, as distinct from ‘public’. See also Collective consumption.
Input-output table An input-output table is a means of presenting a detailed analysis of the process of production and the use of goods and services (products) and the income generated in the production process; they can be either in the form of (a) supply and use tables or (b) symmetric input-output tables. See also Coefficient table; Supply and use tables.
Institutional sectors The residential units that make up the total economy are grouped into four mutually exclusive institutional sectors, namely: the non-financial corporations sector; the financial corporations sector; the general government sector; and the household sector, which includes non-profit institutions serving households. See also Institutional units.
Institutional units An institutional unit is an economic entity that is capable, in its own right, of owning assets, incurring liabilities, and engaging in economic activities and in transactions with other entities. There are two main types of institutional units, namely persons or groups of persons in the form of households, and legal or social entities whose existence is recognised by law or society independently of the persons, or other entities, that may own or control them. The individual members of multi-person households are not treated as separate institutional units. Legal or social entities that engage in economic activities in their own right, such as a corporation, NPI or government unit, are considered institutional units as they are responsible and accountable for the economic decisions or actions they take. See also Institutional sectors.
Insurance technical reserves comprise financial assets that are reserves against outstanding risks, reserves for with-profit insurance, prepayments of premiums and reserves against outstanding claims. Insurance technical reserves may be liabilities not only of life or non-life insurance enterprises (whether mutual or incorporated) but also of autonomous pension funds, which are included in the insurance enterprise sub-sector, and certain non-autonomous pension funds that are included in the institutional sector that manages the funds. Insurance technical reserves are subdivided between net equity of households on life insurance reserves and on pension funds, and prepayments of premiums and reserves against outstanding claims. See also Net equity of households on life insurance reserves and on pension funds; Prepayment of premiums and reserves against outstanding claims.
Intangible fixed assets are fixed assets that consist of mineral exploration, computer software, entertainment, literary or artistic originals, and ownership transfer costs, and which are intended to be used for more than one year. See also Computer software; Entertainment, literary or artistic originals; and Mineral exploration.
Intangible non-produced assets are assets that are constructs of society. They are evidenced by legal or accounting actions, such as the granting of a patent or the conveyance of some economic benefit to a third party. Some entitle their owners to engage in certain specific activities and to exclude other institutional units from doing so except with the permission of the owner. These assets consist of patented entities, leases and other transferable contracts, purchased goodwill and other intangible non-produced assets. See also Non-produced assets.
Intermediate consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding the consumption of fixed capital. See also Gross value added.
Inventories consist of stocks of outputs that are held at the end of a period by the units that produced them prior to their being further processed, sold, delivered to other units or used in other ways, and stocks of products acquired from other units that are intended to be used for intermediate consumption or for resale without further processing.
Labour productivity estimates are indexes of real GDP per person employed or per hour worked. They have been derived by dividing the chain volume measure of GDP by hours worked. Labour productivity indexes not only reflect the contribution of labour to changes in product per labour unit, but are also influenced by the contribution of capital and other factors affecting production.
Liability A liability is an obligation which requires one unit (the debtor) to make a payment or a series of payments to the other unit (the creditor) in certain circumstances specified in a contract between them.
Livestock assets are classified as either fixed assets or inventories. Those livestock which are used in production of other products (e.g. breeding stock, animals for entertainment, sheep for wool and dairy cattle) are fixed assets. Inventories cover all other livestock types and include those animals raised for meat or other one-off products (e.g. leather).
Long-term debt securities are debt securities with an original term to maturity of more than one year. They include Treasury bonds, semi-government securities, corporate securities, asset backed bonds and convertible notes prior to conversion. Long-term debt securities also include subordinated debt. See also Financial assets.
Machinery and equipment includes transport equipment and other machinery and equipment, other than that acquired by households for final consumption. Tools that are relatively inexpensive and purchased at a relatively steady rate, such as hand tools, are excluded. Also excluded are machinery and equipment integral to buildings such as lifts, these being included in dwellings and non-residential buildings.
Machinery and equipment acquired by households for final consumption (e.g. motor vehicles) are not treated as fixed assets. However, they are included in the memorandum item ‘consumer durables’ in the balance sheet for households. Houseboats, barges, mobile homes and caravans used by households as principal residences are included in dwellings. See also Dwellings; Tangible fixed assets.
Mineral exploration is the value of expenditures on exploration for petroleum and natural gas and for non-petroleum mineral deposits. These expenditures include pre-licence costs, licence and acquisition costs, appraisal costs and the costs of actual test drilling and boring, as well as the costs of aerial and other surveys, transportation costs etc., incurred to make it possible to carry out the tests. See also Intangible fixed assets.
Monetary gold and SDRs (Special Drawing Rights) are financial assets for which there is no corresponding financial liability.
Monetary gold is gold owned by monetary authorities (or others subject to effective control by monetary authorities) that is held as a financial asset and as a component of official reserves. Other gold held by any entity (including non-reserve gold held by monetary authorities and all gold held by financial institutions other than the central bank) is treated as a commodity.
SDRs are international reserve assets created by the International Monetary Fund (IMF) and allocated to its member States to supplement existing reserve assets. They are held exclusively by official holders, which are normally central banks. See also Financial assets.
Multifactor productivity estimates are indexes of real GDP per combined unit of labour and capital. They have been derived by dividing chain volume estimates of market sector GDP by a combined measure of hours worked and capital services.
Net equity of households on life insurance reserves and on pension funds refers to reserves held against life insurance and annuity policies by insurance enterprises, whether mutual or incorporated, and by pension funds. These reserves are considered to be assets of the policyholders and not of the institutional units that manage them.
Net lending to non-residents is the excess of net acquisition of financial assets in the rest of the world by resident institutional units over their net incurrence of liabilities in the rest of the world.
Net saving - corporations is equal to the gross income receivable by corporations less income payable and consumption of fixed capital. Income receivable by corporations includes gross operating surplus, property income and current transfers receivable. Income payable includes property income and current transfers (including income taxes) payable.
Net saving - general government is the surplus of general government gross income over current use of income. Current use of income includes final consumption expenditure and current transfers (interest and other property income payable, social assistance benefits payments to residents, transfers to non-profit institutions, subsidies, etc.).
Net saving - households is equal to gross household disposable income less household final consumption expenditure and consumption of fixed capital. Household saving is estimated as the balancing item in the households income account. It includes saving through life insurance and superannuation funds (including net earnings on these funds), increased equity in unfunded superannuation schemes and the increase in farm assets with marketing boards.
Net secondary income from non-residents comprises all transfers to or from non-residents to resident government or private institutional units which are not payments for goods and services, compensation of employees or property income.
Net worth In the national and sectoral balance sheets, net worth represents the difference between the stock of assets (both financial and non-financial) and the stock of liabilities (including shares and other equity).
Non-financial assets are assets for which no corresponding liabilities are recorded. See also Assets; Financial assets; Non-produced assets; and Produced assets.
Non-produced assets are non-financial assets that come into existence other than through processes of production. Non-produced assets consist of tangible assets and intangible assets. See also Intangible non-produced assets; Tangible non-produced assets.
Other accounts receivable/payable This term is used in two ways. Firstly it is the financial asset consisting of two subordinate classifications: ‘trade credit and advances’, and ‘other accounts receivable/payable’. Alternatively, the item can refer to the actual classification ‘other accounts receivable/payable’.
Accounts receivable and payable include items other than those in the previous paragraph (e.g. in respect of taxes, dividends, purchases and sales of securities, rent, wages and salaries and social contributions). Interest accruing that is not capitalised in the underlying asset may be included. See also Financial assets.
Other buildings and structures consist of non-residential buildings and other structures. ‘Non-residential buildings’ are buildings other than dwellings, including fixtures, facilities and equipment that are integral parts of the structures and costs of site clearance and preparation.
‘Other structures’ are structures other than buildings, including streets, sewers and site clearance and preparation other than for residential or non-residential buildings. Also included are shafts, tunnels and other structures associated with mining subsoil assets. Major improvements to land, such as dams, are also included. See also Tangible fixed assets.
Other subsidies on production consist of all subsidies, except subsidies on products, which resident enterprises may receive as a consequence of engaging in production. Other subsidies on production include: subsidies related to the payroll or workforce numbers, including subsidies payable on the total wage or salary bill, on numbers employed, or on the employment of particular types of persons, e.g. persons with disabilities or persons who have been unemployed for a long period. The subsidies may also be intended to cover some or all of the costs of training schemes organised or financed by enterprises. Subsidies aimed at reducing pollution are also included. See also Subsidies on products.
Other taxes on production consist of all taxes that enterprises incur as a result of engaging in production, except taxes on products. Other taxes on production include: taxes related to the payroll or workforce numbers excluding compulsory social security contributions paid by employers and any taxes paid by the employees themselves out of their wages or salaries; recurrent taxes on land, buildings or other structures; some business and professional licences where no service is provided by the Government in return; taxes on the use of fixed assets or other activities; stamp duties; taxes on pollution; and taxes on international transactions. See also Current taxes on income; Taxes on production and imports; and Taxes on products.
Output consists of those goods and services that are produced within an establishment that become available for use outside that establishment, plus any goods and services produced for own final use.
Ownership transfer costs The costs of ownership transfer consist of the following kinds of items: all professional charges, taxes payable or commissions incurred by the units acquiring and disposing of the asset (e.g. fees paid to lawyers, architects, surveyors, engineers, valuers, etc., and commissions paid to estate agents, auctioneers, etc.). The assets on which ownership transfer costs may apply include dwellings, non-dwelling buildings and land.
Perpetual inventory method (PIM) The PIM is a method of constructing estimates of capital stock and consumption of fixed capital from time series of gross fixed capital formation. It allows an estimate to be made of the stock of fixed assets in existence and in the hands of producers which is generally based on estimating how many of the fixed assets, installed as a result of gross fixed capital formation undertaken in previous years, have survived to the current period.
Prepayments of premiums and reserves against outstanding claims are reserves in the form of prepayments of premiums which result from the fact that, in general, insurance premiums are paid in advance. Such reserves are assets of the policyholders.
Reserves against outstanding claims are reserves that insurance enterprises hold in order to cover the amounts they expect to pay out in respect of claims that are not yet settled or claims that may be disputed. Reserves against outstanding claims are considered to be assets of the beneficiaries. See also Financial assets.
Primary incomes are incomes that accrue to institutional units as a consequence of their involvement in processes of production or ownership of assets that may be needed for purposes of production. They are payable out of the value added created by production. The primary incomes that accrue by lending or renting financial or tangible non-produced assets, including land, to other units for use in production are described as ‘property incomes’. Receipts from taxes on production and imports are treated as primary incomes of governments even though not all of them may be recorded as payable out of the value added of enterprises. Primary incomes exclude social contributions and benefits, current taxes on income, wealth, etc. and other current transfers.
Produced assets are non-financial assets that have come into existence as outputs from production processes. Produced assets consist of fixed assets and inventories. See also Fixed assets; Inventories.
Producer's prices The producer's price is the amount receivable by the producer from the purchaser for a unit of a good or service.
Property income is the income receivable by the owner of a financial asset or a tangible non-produced asset in return for providing funds to, or putting the tangible non-produced asset at the disposal of, another institutional unit. Property incomes are received by the owners of financial assets and tangible non-produced assets (mainly land and subsoil assets). Institutional units with funds to invest do so by lending them to other institutional units. As a result, financial assets are created the owners of which are entitled to receive property incomes in the form of interest and dividends. Owners of land and subsoil assets may put these assets at the disposal of other units by arranging contracts or leases under which the tenants, or users of the assets, agree to pay to the owners property incomes in the form of rent.
Purchasers’ prices The purchaser's price is the amount paid by the purchaser, excluding any deductible tax, in order to take delivery of a unit of a good or service at the time and place required by the purchaser. The purchaser’s price of a good includes any transport charges paid separately by the purchaser to take delivery at the required time and place. See also Basic prices; Economically significant prices.
Quasi-corporations are unincorporated enterprises that function as if they were corporations. Three main kinds of quasi-corporations are recognised by SNA93, namely: an unincorporated enterprise owned by government units engaged in market production and operated in a similar way to publicly owned corporations; unincorporated enterprises, including unincorporated partnerships, owned by households, which are operated as if they were privately owned corporations; and unincorporated enterprises which belong to institutional units resident abroad such as permanent branches, or offices of production units belonging to foreign enterprises which engage in significant amounts of production over long, or indefinite, periods of time.
Real gross domestic income is equal to the chain volume measure of gross domestic product adjusted for changes in Australia's terms of trade.
Real gross national income (RGNI) is the real aggregate value of gross primary incomes for all institutional sectors, including net primary income receivable from non-residents. RGNI was formerly called real gross national product. It is derived as the sum of the chain volume estimate of GDP (using the income approach) and real net primary income receivable from non-residents. The latter is derived by deflating the nominal measure with the implicit price deflator for domestic final demand.
Reference period In connection with price or volume indices, the reference period means the period to which the indices relate. It is typically set equal to 100 for price indexes and to the corresponding current price values of the reference year for volume indexes and it does not necessarily coincide with the base period. See also Base period.
Secondary income consists of receipts and payments of current transfers.
Securities other than shares are financial assets that are normally traded in the financial markets and that give the holders the unconditional right to receive stated fixed sums on a specified date (such as bills) or the unconditional right to fixed money incomes or contractually determined variable money incomes (bonds and debentures). With the exception of perpetual bonds, bonds and debentures also give holders the unconditional right to fixed sums as repayments of principal on a specified date or dates. See also Financial assets.
Examples include securities such as bills, bonds, debentures, financial derivatives, negotiable certificates of deposit, bankers’ acceptances, commercial paper, negotiable securities backed by loans or other assets, preferred stocks or shares that pay a fixed income but do not provide for participation in the residual earnings or value of a corporation, and bonds that are convertible into shares. ‘Securities other than shares’ may be subdivided between short-term and long-term. See also Financial assets; Long-term debt securities; and Short-term debt securities.
Shares and other equity are financial assets that are instruments and records acknowledging, after the claims of all creditors have been met, claims to the residual value of incorporated enterprises. Equity securities do not provide the right to a predetermined income or to a fixed sum on dissolution of the incorporated enterprise. Ownership of equity is usually evidenced by shares, stocks, participation, or similar documents. Preferred stocks or shares which also provide for participation in the distribution of the residual value on dissolution of an incorporated enterprise are included.
Proprietors’ net equity in quasi-corporate enterprises is one of the components of 'shares and other equity' although it is not distinguished as a separate category in the classification. Shares are subdivided between those listed and those not listed on the Australian Stock Exchange. See also Financial assets.
Short-term debt securities are debt securities with an original maturity of one year or less. They include bills of exchange, promissory notes (also called ‘one name paper’), Treasury notes and bank certificates of deposit. See also Financial assets.
Social assistance benefits are current transfers payable to households by government units to meet the same needs as social insurance benefits, but which are not made under a social insurance scheme incorporating social contributions and social insurance benefits. They may be payable in cash or in kind. In Australia, they include the age pension and unemployment benefits. See also Employees’ social contributions; Employers’ contributions to superannuation; Employers’ imputed social contributions; Employers’ social contributions; Social benefits; Social contributions; and Social insurance benefits.
Social assistance benefits in cash to residents include current transfers to persons from general government in return for which no services are rendered or goods supplied. Principal components include: scholarships; maternity, sickness and unemployment benefits; child endowment and family allowances; and widows', age, invalid and repatriation pensions.
Social benefits are current transfers received by households and are intended to provide for needs arising from certain events or circumstances, e.g. sickness, unemployment, retirement, housing, education or family circumstances. There are two kinds of social benefits: social insurance benefits; and social assistance benefits. See also Employees’ social contributions; Employers’ contributions to superannuation; Employers’ imputed social contributions; Employers’ social contributions; Social assistance benefits; Social contributions; and Social insurance benefits.
Social contributions are actual or imputed payments to social insurance schemes to make provision for social insurance benefits to be paid. They may be made by employers on behalf of their employees; or by employees, self-employed or non-employed persons on their own behalf. See also Employees’ social contributions; Employers’ contributions to superannuation; Employers’ imputed social contributions; Employers’ social contributions; Social assistance benefits; Social benefits; and Social insurance benefits.
Social insurance benefits are transfers provided under organised social insurance schemes. Organised social insurance schemes provide benefits through general social security schemes, privately funded social insurance schemes, or unfunded schemes managed by employers for the benefit of their existing or former employees without involving third parties in the form of insurance enterprises or pension funds. See also Employees’ social contributions; Employers’ contributions to superannuation; Employers’ imputed social contributions; Employers’ social contributions; Social assistance benefits; Social benefits; and Social contributions.
Statistical discrepancy (I), (E) and (P) For years in which a balanced supply and use table is available to benchmark the national accounts, the same measure of GDP is obtained regardless of whether one sums incomes, expenditures or gross value added for each industry. For other years, however, statistical discrepancies between the measures remain. The differences between those three separate estimates and the single measure of GDP for those years are called statistical discrepancy (I), statistical discrepancy (E) and statistical discrepancy (P), respectively.
Subsidies on products A subsidy on a product is a subsidy payable per unit of a good or service. The subsidy may be a specific amount of money per unit of quantity of a good or service, or it may be calculated ad valorem as a specified percentage of the price per unit. A subsidy may also be calculated as the difference between a specified target price and the market price actually paid by a purchaser. A subsidy on a product usually becomes payable when the product is produced, sold or imported, but it may also become payable in other circumstances, such as when a product is exported, leased, transferred, delivered or used for own consumption or own capital formation. See also Other subsidies on production.
Supply and use tables are in the form of matrices that record how supplies of different kinds of goods and services originate from domestic industries and imports and how those supplies are allocated between various intermediate or final uses, including exports. See also Coefficient table; Input-output table.
Tangible fixed assets consist of dwellings; other buildings and structures; machinery and equipment; and cultivated assets. See also Dwellings; Other buildings and structures; Machinery and equipment; and Cultivated assets.
Tangible non-produced assets are non-produced assets that occur in nature and over which ownership may be enforced and transferred. Environmental assets over which ownership rights have not, or cannot, be enforced, such as international waters or air space, are excluded. Tangible non-produced assets consist of land, subsoil assets, non-cultivated biological resources and water resources. See also Non-produced assets.
Taxes on production and imports consist of ‘taxes on products’ and ‘other taxes on production’. These taxes do not include any taxes on the profits or other income received by an enterprise. They are payable irrespective of the profitability of the production process. They may be payable on the land, fixed assets or labour employed in the production process, or on certain activities or transactions. See also Current taxes on income and wealth; Other taxes on production; and Taxes on products.
Taxes on products A tax on a product is a tax that is payable per unit of some good or service. The tax may be a specific amount of money per unit of quantity of a good or service (quantity being measured either in terms of discrete units or continuous physical variables such as volume, weight, strength, distance, time, etc.), or it may be calculated ad valorem as a specified percentage of the price per unit or value of the goods or services transacted. A tax on a product usually becomes payable when it is produced, sold or imported, but it may also become payable in other circumstances, such as when a good is exported, leased, transferred, delivered, or used for own consumption or own capital formation. See also Current taxes on income and wealth; Other taxes on production; and Taxes on production and imports.
Terms of trade represent the relationship between export and import prices. Australia's terms of trade are calculated by dividing the implicit price deflator for exports by the implicit price deflator for imports.
Total agricultural factor income is that part of total factor incomes arising from production in agriculture and services to agriculture, and is equal to the estimated gross value of production (after the inventory valuation adjustment) less estimated production costs other than compensation of employees and consumption of fixed capital, for all enterprises engaged in agriculture and services to agriculture. It includes agricultural output produced by the household sector for its own consumption.
Total factor income is that part of the cost of producing the gross domestic product which consists of gross payments to factors of production (labour and capital). It represents the value added by these factors in the process of production, and is equivalent to gross domestic product less taxes plus subsidies on production and imports.
Trade credits and advances Trade credit is credit for the purchase of goods and services extended directly to corporations, to government, to NPIs, to households and to the rest of the world, and also includes advances for work that is in progress (if classified as such under inventories) or is to be undertaken. See also Financial assets; Other accounts receivable.
Vineyards, orchards and other plantations of trees yielding repeat products comprise trees (including vines and shrubs) cultivated for products that they yield year after year, including those cultivated for fruits and nuts, for sap and resin, and for bark and leaf products.
Wages and salaries payable in cash include the value of any social contributions, income taxes, etc., payable by the employee even if they are actually withheld by the employer for administrative convenience or other reasons and paid directly to social insurance schemes, tax authorities, etc., on behalf of the employee. Wages and salaries may be paid as remuneration in kind instead of, or in addition to, remuneration in cash. Separation, termination and redundancy payments are also included in wages and salaries. Wages and salaries are also measured as far as possible on an accrual rather than a strict cash basis. See also Employers’ social contributions; Compensation of employees.