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1301.0 - Year Book Australia, 2008  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 07/02/2008   
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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 Australian National Accounts: National Income, Expenditure and Product (5206.0), and in greater detail once a year, in 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 2001-02 to 2005-06. Table 30.4 shows expenditure on GDP in volume terms.

30.3 GDP ACCOUNT, Current prices

2001-02
2002-03
2003-04
2004-05
2005-06
$m
$m
$m
$m
$m

Final consumption expenditure
Total general government
132 230
141 088
150 227
162 837
176 240
Households
433 649
461 031
492 315
520 982
547 138
Total final consumption expenditure
565 879
602 119
642 542
683 819
723 378
Gross fixed capital formation
Private
141 153
165 592
182 658
196 638
218 261
Public
27 679
28 488
30 481
34 233
37 935
Total gross fixed capital formation
168 832
194 080
213 140
230 871
256 196
Total changes in inventories
-25
1 419
6 111
4 501
1 513
Gross national expenditure
734 687
797 619
861 793
919 191
981 087
Exports of goods and services
156 102
151 790
147 205
167 562
196 117
less Imports of goods and services
155 078
167 736
168 714
190 188
210 486
Statistical discrepancy(a)
-
-
-
-
-749
Gross domestic product
735 714
781 675
840 285
896 568
965 969
Compensation of employees
356 095
375 509
399 334
428 549
460 318
Gross operating surplus
226 582
243 704
263 896
285 992
316 160
Gross mixed income
68 835
69 700
77 750
80 049
82 096
Total factor income
651 512
688 913
740 980
794 590
858 574
Taxes less subsidies on production and imports
84 202
92 761
99 305
101 978
106 034
Statistical discrepancy(b)
-
-
-
-
1 361
Gross domestic product
735 714
781 675
840 285
896 568
965 969

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

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 2.8% in 2005-06. This was higher than the 2.7% recorded in the previous year.

30.4 EXPENDITURE ON GDP, Chain volume measures(a)

2001-02
2002-03
2003-04
2004-05
2005-06
$m
$m
$m
$m
$m

Final consumption expenditure
General government
146 210
150 840
156 783
162 837
168 049
Households
458 647
474 389
499 526
520 982
534 311
Total final consumption expenditure
604 778
625 160
656 296
683 819
702 360
Gross fixed capital formation
Private
147 909
172 038
186 422
196 638
213 763
Public
28 017
29 238
31 471
34 233
36 759
Total gross fixed capital formation
176 022
201 287
217 903
230 871
250 522
Domestic final demand
780 442
826 442
874 202
914 690
952 882
Changes in inventories
156
842
5 765
4 501
1 893
Gross national expenditure
780 767
827 696
879 908
919 191
954 775
Exports of goods and services
159 887
159 183
162 583
167 562
171 053
less Imports of goods and services
132 677
150 025
169 591
190 188
203 402
Statistical discrepancy(b)
-
-
-
-
-678
Gross domestic product
813 542
839 187
873 197
896 568
921 747

- nil or rounded to zero (including null cells)
(a) Reference year is 2004-05. Measures for years other than 2004-05 and 2005-06 are not additive.
(b) Expenditure-based.
Source: Australian System of National Accounts (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 1960-61. (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 2005-06 was 53.6%, slightly lower than the previous year (53.9%), and at its lowest level since 1969-70. The profits share of total factor income has been growing steadily since 1998-99. In 2005-06 profits share was 26.9%, 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 2001-02 to 2005-06.

30.7 NATIONAL INCOME ACCOUNT, Current prices

2001-02
2002-03
2003-04
2004-05
2005-06
$m
$m
$m
$m
$m

Income

Compensation of employees
356 095
375 509
399 334
428 549
460 318
Gross operating surplus
226 582
243 704
263 896
285 992
316 160
Gross mixed income
68 835
69 700
77 750
80 049
82 096
Taxes less subsidies on production and imports
84 202
92 761
99 305
101 978
106 034
Net primary income from non-residents
-19 667
-22 190
-23 529
-32 444
-37 467
Gross national income
716 047
759 484
816 756
864 124
927 141
Net secondary income from non-residents
Current taxes on income, wealth, etc.
1 002
965
981
989
1 001
Other current transfers
-1 019
-1 179
-1 250
-1 409
-1 438
Gross disposable income
716 030
759 270
816 487
863 704
926 704

Use of gross disposable income

Final consumption expenditure
General government
132 230
141 088
150 227
162 837
176 240
Households
433 649
461 031
492 315
520 982
547 138
Total final consumption expenditure
565 879
602 119
642 542
683 819
723 378
Net saving(a)
34 891
35 625
46 190
45 362
57 850
Consumption of fixed capital
115 259
121 526
127 754
134 523
145 476
Total use of gross disposable income
716 030
759 270
816 487
863 704
926 704

(a) Net saving is derived as a balancing item.
Source: Australian System of National Accounts (5204.0).


Graph 30.8 shows net saving by institutional sector as a proportion of GDP for the years 1960-61 to 2005-06. Household net saving as a percentage of GDP generally fluctuated between 6% and 7% between 1960-61 and 1971-72. It then rose to a peak of 11.6% in 1974-75. Since then it has fallen to a position in 2002-03 when consumption by households exceeded income and, consequently, household net saving was negative for the first time. Household net saving has remained negative since 2002-03. In 2005-06 consumption exceeded household income, by $3.8 billion (b) (table 30.9).

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

General government net saving was positive from 1960-61 to 1972-73 before turning negative from 1974-75 to 1996-97 (except for 1988-89). It has remained positive since 1997-98. In 2005-06 general government net saving was positive at 2.5% of GDP ($23.9b). In 2005-06 net saving of non-financial corporations was 1.0% of GDP ($10.0b). Net saving of financial corporations has been positive at about 1% to 2% of GDP for virtually all of its history. In 2005-06 net saving of financial corporations was 2.9% of GDP ($27.7b).


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 2001-02 to 2005-06.
30.9 NATIONAL CAPITAL ACCOUNT, Current prices

2001-02
2002-03
2003-04
2004-05
2005-06
$m
$m
$m
$m
$m

National net saving
General government
7 686
15 891
15 514
18 088
23 920
Households
4 684
-12 024
-13 240
-9 719
-3 812
Non-financial corporations
13 124
13 925
21 270
11 443
10 036
Financial corporations
9 396
17 833
22 647
25 551
27 704
Total national net saving
34 891
35 625
46 190
45 362
57 850
Consumption of fixed capital
115 259
121 526
127 754
134 523
145 476
Capital transfers
Receivable from non-residents
2 543
2 404
2 571
2 674
2 648
less Payable to non-residents
1 357
1 301
1 404
1 533
1 512
Gross saving and capital transfers
151 337
158 254
175 112
181 026
204 461
Gross fixed capital formation
Private
141 153
165 592
182 658
196 638
218 261
Public corporations
10 126
10 688
11 934
14 013
17 394
General government
17 553
17 800
18 548
20 220
20 541
Total gross fixed capital formation
168 832
194 080
213 140
230 871
256 196
Changes in inventories
Private non-farm(a)
-223
1 937
6 448
4 294
482
Farm
176
-407
-31
271
683
Public authorities
22
-111
-306
-64
348
Total changes in inventories
-25
1 419
6 111
4 501
1 513
Acquisitions less disposals of non-produced non-financial assets
170
112
72
-71
4
Statistical discrepancy(b)
-
-
-
-
-2 110
Net lending to non-residents
-17 644
-37 359
-44 212
-54 278
-51 141
Total capital accumulation and net lending
151 337
158 254
175 112
181 026
204 461

- nil or rounded to zero (including null cells)
(a) Includes for all periods the privatised marketing authorities.
(b) Statistical discrepancy (E) less statistical discrepancy (I).
Source: Australian System of National Accounts (5204.0).


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 1970s and was reasonably stable up to the 1990s. It has generally been above 10% of GDP and in 2005-06 investment by non-financial corporations was 13.2% of GDP. Household investment as a proportion of GDP declined steadily between 1960-61 and 1973-74 but has since remained steady at around 10% of GDP. In 2005-06 the ratio to GDP was 10.5%. General government investment as a proportion of GDP peaked at 4.6% in 1975-76 and has generally fallen since then. It was 2.1% of GDP in 2005-06. The highest 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 0.8% of GDP in 2005-06.
30.10 Investment, relative to GDP
Graph: 30.10 Investment, relative to GDP

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.

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 8.3%. Since then it has trended downwards and the household sector changed from a net lender to a net borrower in 1997-98. In 2005-06 household net borrowing was 4.9%. Non-financial corporations have been net borrowers over the entire period 1967-68 to 2005-06 (except for 1993-94), and the amounts borrowed have fluctuated significantly from year to year. As a proportion of GDP, their net borrowing was 5.0% in 2005-06.

In 2005-06 financial corporations net lending represented 2.8% of GDP, the highest recorded level. After recording a record level of borrowing as a proportion of GDP in 1992-93 (5.9%), general government borrowing steadily declined. From 1997-98 to 1999-2000 the sector was a net lender and in 2000-01 and 2001-02 general government was a net borrower before returning to being a net lender from 2002-03 to 2005-06. In 2005-06 general government net lending represented 1.7% of GDP.
30.11 Net lending, relative to GDP
Graph: 30.11 Net lending, relative to 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.

30.12 EXTERNAL ACCOUNTS, Current prices

2001-02
2002-03
2003-04
2004-05
2005-06
$m
$m
$m
$m
$m

Income account

Income of non-residents
Imports of goods and services
155 078
167 736
168 714
190 188
210 486
Primary income receivable
Compensation of employees
1 196
1 324
1 619
1 703
1 802
Property income receivable
34 057
36 605
38 903
51 722
60 625
Total primary income receivable
35 253
37 929
40 522
53 425
62 427
Secondary income receivable
4 297
4 447
4 542
4 689
4 710
Total income of non-residents
194 628
210 112
213 778
248 302
277 623
Uses of income of non-residents
Exports of goods and services
156 102
151 790
147 205
167 562
196 117
Primary income payable
Compensation of employees
902
900
989
1 113
1 189
Property income payable
14 684
14 839
16 004
19 868
23 771
Total primary income payable
15 586
15 739
16 993
20 981
24 960
Secondary income payable
4 280
4 233
4 273
4 269
4 273
Balance on external income account
18 660
38 350
45 307
55 490
52 273
Total use of income of non residents
194 628
210 112
213 778
248 302
277 623

Capital account

Balance on external income account
18 660
38 350
45 307
55 490
52 273
Capital transfers receivable
1 357
1 301
1 404
1 533
1 512
less Capital transfers payable
2 543
2 404
2 571
2 674
2 648
Total net capital transfers
-1 186
-1 103
-1 167
-1 141
-1 136
Gross saving and capital transfers
17 474
37 247
44 140
54 349
51 137
Acquisitions less disposals of non-produced non-financial assets
-170
-112
-72
71
-4
Net lending (+) / net borrowing (-)
17 644
37 359
44 212
54 278
51 141
Total capital accumulation and net lending (+) / net borrowing (-)
17 474
37 247
44 140
54 349
51 137

Source: Australian System of National Accounts (5204.0).

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 2005-06 was 5.3%, down from 6.1% in 2004-05. Graph 30.13 shows net lending to non-residents as a proportion of GDP since 1960-61.

30.13 Net lending to overseas, relative to GDP
Graph: 30.13 Net lending to overseas, 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 1960-61. In 2005-06 the imports ratio was 21.8% and the exports ratio was 20.3%. Since 2000-01 imports increased 55.6% in volume terms compared with a 6.0% growth in exports.

30.14 Exports and imports, relative to GDP
Graph: 30.14 Exports and imports, relative to GDP




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