4.1. A range of initiatives to improve the quality of the balance of payments are either under way or planned. These improvements are generally targeted at areas that the analyses in this paper highlight as issues of accuracy or reliability.
4.2. As an illustration of the results already achieved for international services statistics, an article on Developments in Measuring Australia's International Trade in Services, published in International Trade in Services, Australia, 1992-93 (5354.0) describes the data sources currently used, changes made in the collection strategy, data quality initiatives being pursued and the future developments that are expected. The negative bias in initial estimates for services credits and debits, as revealed in the analyses in this paper, largely reflects the success which the improvements noted in that article have already had in producing better measures of international trade in services.
4.3. Another significant area for quality improvement identified in the analyses is in the measurement of reinvested earnings. The degree of estimation that is currently based on extrapolations of annual survey results contributes significantly to revisions to both the income credits and income debits series as well as to the associated capital account series. A quarterly survey methodology is currently being developed and it is expected that quarterly survey data will be incorporated into the accounts in the near future.
4.4. A range of other initiatives have been implemented to monitor quality and indicate areas for improvement in the current account. Work already undertaken in bilateral comparisons of data by region with our trading partners, both within the framework of the Asia Pacific Economic Cooperation initiative and more generally, has reaffirmed the quality of merchandise trade aggregates. Future work will broaden the country base for merchandise trade comparisons and extend it to cover services and investment data. A particular example of the last point will be the ABS participation, in 1997, in a global Coordinated Portfolio Investment Survey being organised by the IMF. It is expected that results from partner countries will be available to check the quality of output from existing ABS collection methodologies. The partner information may also be substituted for data from existing ABS surveys where data collection by a partner country, with better access to counterparties than can be achieved in domestic collections, can better target the required information. In a similar fashion, partner country use of ABS data from that coordinated collection may highlight further quality issues to be addressed in the Australian data.
4.5. More generally, a number of other improvements have already been made, are underway or are planned for the quarterly ABS Survey of Foreign Investment. Improvements in capturing and valuing transactions by nonresidents in securities domiciled in Australia have been undertaken. However, further work is underway to collect a significantly increased range of data quarterly to avoid the necessity for significant revisions (highlighted in the analyses in this paper) that usually flow from the more comprehensive coverage of the annual survey.
4.6. The ABS is also currently reviewing its concepts, sources and methods in light of new international standards being issued for balance of payments statistics. It is expected that the implementation of the new standards, from the September quarter 1997 and October 1997 issues of the balance of payments quarterly and monthly publications, will also bring significant improvements in data quality, particularly for the capital account. The more detailed information required by the standards regarding both transactions in financial instruments and price changes in the holdings of these instruments is expected to improve both the quality of reporting in ABS collections and the capacity of ABS compilation procedures to develop comprehensive estimates. Among the improvements will be the identification and measurement of international transactions in financial derivatives.
4.7. Other quality initiatives will be developed and implemented over time as analysis reveals the need for focus in particular areas and as resources permit identified priorities to be targeted.