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5368.0 - International Trade in Goods and Services, Jul 2000  
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Feature Article - The Sydney Olympic Games Update


This article originally appeared in International Trade in Goods and Services (Cat. no. 5368.0) - July 2000 issue.

INTRODUCTION

The statistical treatment of the economic activity for the Olympic Games and the Paralympic Games is consistent across all of the macro-economic statistics published by the Australian Bureau of Statistics. A detailed explanation of the treatment of the economic activity on the balance of payments (BOP) and international investment position (IIP) was published in the September quarter 1999 issue of Balance of Payments and International Investment Position, Australia (Cat. no. 5302.0). That article provided the reasons for the BOP treatments that are being adopted and for the sources of the information to be used. This article provides an update on the statistical impacts of the measurement of Olympic Games effects in Australia's BOP and IIP.


SUMMARY IMPACTS OF THE OLYMPICS ON BOP AND IIP

The significant impacts in the international accounts arise from the international transactions of Sydney Olympic Games Organising Committee (SOCOG) and the movement of athletes and tourists to participate in or watch the Olympics. There are other activities associated with the lead up to the Games that are less significant for the balance of payments, such as importing materials for construction of Games facilities. A summary of the treatment of various games effects on BOP and IIP items is provided in table F1.

F1. TREATMENT OF MAJOR GAMES EFFECTS IN INTERNATIONAL ACCOUNTS

TREATMENT IN BOPTREATMENT IN IIP POSITION ESTIMATES

Games effectsItemTimingInstrumentTiming


Olympic ticket sales Trade credit liabilities -As soldTrade credit liabilities -Total sales to date
to non-residentslong term drawingslong term
Olympic ticket usage byTravel creditsSept to
overseas visitorsOct 2000
Trade credit liabilities -Sept andTrade credit liabilities -Reduction in Sept qtr,
long term repaymentsDec qtrs 2000long termextinguished in Dec qtr
Other expenditure in Australia ofTravel creditsAug to
Olympics athletes and other visitorsOct 2000
Receipt by SOCOG of TV rightsTrade credit liabilities -As receivedTrade credit liabilities -Total receipts to date
payments from non-residentslong term drawingslong term
Delivery of TV broadcastsAudio-visual andSept to
to rights holdersrelated services creditsOct 2000
Trade credit liabilities -Sep andTrade credit liabilities -Reduction in Sept qtr,
long term repaymentsDec qtrs 2000long termextinguished in Dec qtr
Receipt by SOCOG of sponsorshipRoyalties andAs received
payments from non-residentslicence fees credits
Airfare payments to the variousCurrent transfers debitsAs paid
National Olympic Committees
SOCOG payments to IOCRoyalties andAs paid
licence fees debits
Other international goods orRecorded in the relevantAs acquired
services acquired by SOCOGgoods or services
commodity groups
Goods imported permanently toMerchandise goods debitsAs imported
support operation of the Games
Airfares earned by resident carriers fromTransportation creditsAug to
non-resident visitors coming to the GamesOct 2000
Sporting equipment brought inExcluded
by visiting teams
Goods imported temporarily toExcluded
support operation of the Games



TRAVEL CREDITS


Most of the direct Games-related travel credits will be concentrated in August to October 2000. Initially, source data will not be available on either the number of Olympics visitors or their expenditures in Australia to enable the direct measurement of this impact.Therefore, the following additional amounts will be included in the initially published estimates in
International Trade in Goods and Services, Australia (Cat no. 5368.0):
    • for August, $10 million;
    • for September, $450 million; and
    • for October, $100 million.


The above amounts include both the usage of tickets to attend Olympic events and all other expenditures of overseas Olympic visitors while in Australia.

As overseas arrivals and departures statistics become available late in 2000, and as traveller expenditure estimates become available in 2001, these direct-effect Olympics estimates will be revised.


AUDIO-VISUAL AND RELATED SERVICES CREDITS


There is $390 million identified in the Games budget in SOCOG's 1999 Annual Report as being received up until June 1999 for television rights. That amount, together with the amounts received during 1999-2000, will be included in the outstanding trade credit liabilities of Australia at 30 June 2000. Further pre-payment liabilities will build up during the September quarter as further payments are made. All of this liability will be run down in September and October as the Games are broadcast. The split of the likely delivery of the services associated with the broadcast rights that will be used in the estimation of audio-visual and related services credits will be:
    • $973 million in September; and
    • $60 million in October 2000.


The exact amounts used in BOP compilation will reflect any revisions reported by SOCOG.


ROYALTIES AND LICENCE FEES CREDITS


The sponsorship payments received from non-resident sponsors, a component of total SOCOG sponsorship revenue, have been included in the BOP over the past 3 years under royalties and copyrights credits. Final payments will be recorded in the September quarter 2000. These amounts are not separately available.


OTHER GAMES-RELATED BOP AND IIP ENTRIES


The trade credit liabilities associated with ticket sales to non-residents are not separately publishable by the ABS. Nor are the Games-related goods imports separately published. The other minor BOP items such as IOC payments were detailed in the article in the September 1999 issue of 5302.0.


SEASONAL ADJUSTMENT AND TREND ESTIMATES


All of the Olympics-related credits and debits will be included in seasonally adjusted aggregates in
International Trade in Goods and Services, Australia (Cat no. 5368.0). However, some of the Olympics impact will be treated as an extreme irregular in deriving trend estimates of services credits for September and October 2000. For the month of September 2000 an extreme irregular adjustment of $1,473 million will be made to exclude Olympics travel ($450 million) and audio-visual services credits ($973 million) from the trend estimates. In October, $160 million will be treated as an
extreme irregular.

The forward seasonal factors to be used for September and October have been estimated without account for the Olympics and need no further adjustment.

During the 2001 annual seasonal reanalysis, the identified extreme irregulars (re-estimated where necessary) will be taken into account in re-estimating the monthly seasonal factors for services credits.

The other Olympic effects are either dispersed over time, such as sponsorship receipts, or are too small to warrant special treatment in the seasonal adjustment process or in deriving trend estimates.

In the September quarter 2000 issue of 5302.0, the September quarter extreme irregular adjustment applied in deriving trend estimates for services credits will be $1,483 million (including both the September amounts identified above as well as the $10 million to be included in travel in August which does not warrant separate monthly adjustment).

In the December quarter issue of 5302.0, the extreme irregular adjustment to the trend estimate for services credits will be $160 million.

The 2001 reanalysis for quarterly seasonal factors for travel credits and "other" services will account for the relevant components of these extreme irregulars in re-estimating seasonal factors for the series.



OTHER RELATED INFORMATION


Feature Article, The Sydney Olympic Games, Balance of Payments and International Investment Position, Australia
(cat no. 5302.0), September quarter 1999.


Feature Article, The Sydney Olympic Games, Australian National Accounts, National Income, Expenditure and Product
(cat no. 5206.0), September quarter 1999.


Feature Article, The Sydney Olympic Games, Australian Economic Indicators
(cat no. 1350.0), August 2000.


Tourism Impacts of the Athletes' Games, Forecast
, Tourism Forecasting Council, November 1998.


FURTHER INFORMATION


For enquiries about the BOP and IIP treatment of Games-related transactions contact Bob McColl on Canberra 02 6252 6688, fax 02 6252 7219 or email
bob.mccoll@abs.gov.au.


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