1001.0 - Annual Report - ABS Annual Report, 2005-06  
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Contents >> Section 3 - National Statistical System >> Chapter 4 - Economic statistics

Chapter 4 - Economic statistics

INTRODUCTION

The Economic Statistics program provides a range of statistics that are used by governments, businesses and community groups to: formulate and assess economic policies (at both macro and micro level); evaluate economic performance; understand the drivers of economic growth; and understand the structure of, and the emerging trends in, the Australian economy. State, territory and regional dimensions of these issues are important, and emphasis is given to servicing these statistical needs. Further, the international comparability of economic statistics is a key aspect in which the ABS plays an active role.

The Economic Statistics program also provides a range of environment and energy statistics and provides a focal point for the ABS to meet the growing need for information in this area. These data directly assist in the management of the nation's environmental and natural resources. Regional dimensions of the data are of particular importance and the ABS has invested in methods aimed at improving regional environmental data.

The full list of the areas within the Economic Statistics program is included at the end of this section.

The ABS framework for economic statistics is based on the United Nations System of National Accounts 1993 (SNA). The SNA provides a comprehensive framework for compiling economic data in a coherent and consistent manner for the purposes of economic analysis and the compilation of national accounts in particular. A range of other connected international standards are also used including the Balance of Payments Manual (BPM), the standards on Government Finance Statistics, manuals on Consumer and Producer Price Indexes and Research and Development Expenditure.

For environmental statistics, the ABS is engaged in international collaboration on the implementation of a framework to support environment and energy statistics known as the System of Environmental-Economic Accounts (SEEA). The SEEA is aligned with the SNA and will meet the needs of users for a coherent and consistent data system that allows for integrated environmental-economic analyses (for example, links of resource use and emissions to economic growth and distribution of income and wealth).

The main economic indicators released by the Economic Statistics program are the quarterly national accounts (containing the latest estimates of gross domestic product (GDP) and household saving) the quarterly consumer, producer and house price indexes, the quarterly balance of payments, the quarterly wage price index, the quarterly business indicators publication and the monthly retail trade publication. These sub-annual releases provide a comprehensive picture of Australia's economic performance and form the basis for economic commentary, analysis and policy development.

A wide range of other statistics are also produced. The sub-annual statistics focus on more targeted areas of the economy such as capital expenditure, building activity, government finance statistics, housing finance and tourist accommodation. Annual publications provide more detailed structural information on the Australian economy, including areas such as innovation and research and development.

STATISTICAL DEVELOPMENTS IN 2005–06

Considerable effort is made to continually improve those statistics produced regularly, either to enhance the range or quality of the statistics or to improve the standards, methods and ways in which the statistics are produced. This section highlights the significant statistical improvements and developments during 2005–06.

1. RELEASE OF THE 15TH SERIES CONSUMER PRICE INDEX

The Consumer Price Index (CPI) measures the change over time in the total price of a fixed basket of goods and services acquired by household consumers and is a core statistic for many policy and indexation purposes. To ensure its relevance, it is important to update the basket and item weights periodically to reflect changes in the range of goods and services available and changes in household spending patterns. The previous basket (14th series) was introduced in the September quarter 2000. The 15th series was linked into the CPI in the September quarter 2005.

When new expenditure weights are introduced, the ABS typically undertakes a review of the CPI to ensure that it continues to serve its purpose as the best measure of household inflation. The 15th series was a minor review. The main changes introduced were to:

    • update the CPI basket and weighting patterns
    • introduce financial services into the CPI in a new group for financial and insurance services, and
    • introduce a hedonic price index (endnote 1) for computers.
More information on the changes was published in Information Paper: Introduction of the 15th series Australian Consumer Price Index, 2005 (cat. no. 6462.0).

2. PUBLICATION OF AN UPGRADED HOUSE PRICE INDEX

In response to widespread concern about the quality of data on changes in house prices, the ABS developed and released an upgraded price index for established houses in December 2005. The main aims in producing the new index were to obtain greater consistency in the methods used to compile the series for each of the eight capital cities, to better control for the effects on prices of the change in the mix of the types of houses sold each quarter, and to record the prices on the date that contracts are exchanged rather than the date of settlement of contracts. The new indexes for established house prices are based on medians aggregated for a number of strata (suburbs or groups of suburbs) within each capital city, and the number of strata within each city has been increased significantly compared with the old series.

Details on the developments were published in Information Paper: Renovating the Established House Price Index (cat. no. 6417.0)
    1. Using the statistical relationship between observed price changes and changes in the characteristics and qualities of the goods, a hedonic price index is developed that measures relative price changes while holding quality and underlying characteristics constant.
3. RELEASE OF THE UPDATED INDUSTRY CLASSIFICATION, ANZSIC 2006

Industry classifications play a key role in providing a common base by which data compilers and analysts can consider the structure of the economy. As economic structures change, new classifications are required and a new edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC) was released in February 2006 (cat. no 1292.0). This was the culmination of three years extensive consultation, by the ABS and Statistics New Zealand, with users and providers of economic statistics in both countries and takes account of developments in the International Standard Industrial Classification (ISIC), which is due for release next year. At the 2 digit level, it will fully concord with ISIC.

For further details, see chapter 7 (special article on ANZSIC 2006 development and implementation).

4. INCORPORATION OF IMPROVED TAX DATA AND OTHER CHANGES INTO THE NATIONAL ACCOUNTS

A wide range of information is used to produce estimates of economic growth (GDP) within the national accounts framework. One of the most important data sources is Business Income Tax (BIT) data. The new tax system afforded opportunities to improve the incorporation of BIT data for use in the national accounts, including data sources used for the national accounts, and these improved data were initially used in 2005.

At the same time as implementing this change, which affected the estimated size of GDP, various other changes were introduced to improve methods and data sources for components of GDP. These included updating benchmarks for expenditure on alterations and additions made to houses, improving measures of information and communication technology related estimates, changing methods for measuring compensation of employees and improving approaches to measuring the value added by the construction and agriculture industries.

5. COLLABORATIONS IN THE ANALYSIS OF BUSINESS SURVEY MICRODATA

Five trial collaborations were undertaken during 2005–06 to explore scope for engaging researchers from other government agencies and to assist the ABS conduct research and analysis of business survey microdata. These collaborations operated under strict legislative provisions of the Census and Statistics Act 1905. The five trial projects were with:
    • Australian Bureau of Agricultural and Resource Economics – Identifying changes to farm management behaviour as a result of the 2002–03 drought
    • Bureau of Transport and Regional Economics – Investigating the disparities of Survey of Motor Vehicle Usage data, compared with other assessments of transport activity, and recommending improvements to survey methodology
    • Productivity Commission – Examining the link between water use, salinity, land management and farm performance, to assess the effectiveness of water use in agricultural activity
    • Department of Industry, Tourism and Resources (DITR) – Increasing knowledge of the innovation dataset and the techniques and tools best applied to analyse the data
    • University of South Australia – Examining the drivers of business innovation in Australia
The collaboration with DITR resulted in a joint ABS/DITR publication (Patterns of Innovation in Australian Businesses, 2003 (cat. no. 8163.0)) and a DITR publication (Collaboration and other factors influencing innovation novelty in Australian businesses – an econometric analysis).

6. FINALISATION OF A STRATEGY FOR THE BUSINESS LONGITUDINAL DATABASE AND THE ASSOCIATED INTEGRATED BUSINESS CHARACTERISTICS SURVEY

Following approval in the 2005–06 Australian Government Budget for the building of a Business Longitudinal Database (BLD), the ABS consulted extensively with users regarding its design and sources of data for the survey, including existing and new ABS surveys, and administrative sources. Data for the first stage are being collected and compiled, and initial results are expected to be released in December 2006. The new Integrated Business Characteristics Survey, which combines existing Innovation and Business Use of IT surveys with other data required for the BLD, will be implemented from 2007.

7. RELEASE OF INFORMATION AND COMMUNICATION TECHNOLOGY SATELLITE ACCOUNT

Information and communication technology (ICT) goods and services play a central role in the Australian economy. However, they are difficult to define and measure. The development of a satellite account has brought together the available information in a framework that considers both the supply and the use of these products and seeks to reconcile the various pieces of data. The satellite account presents information on the contribution of ICT to GDP and shows the relative importance of key ICT industries and products.

The ICT satellite account was released in March 2006 (Australian National Accounts: Information and Communication Technology satellite account, 2002–03 (cat. no. 5259.0)) and it is only the second of its type in the world. It continues a strong tradition of producing detailed analysis of particular sectors of the economy using satellite accounts techniques.

8. DEVELOPMENT OF IMPROVED TRADE IN SERVICES STATISTICS

The frame and benchmarks used for the Survey of International Trade in Services were improved following an extensive coverage exercise. In addition, a number of new methodologies and data sources were introduced into the travel series including:
    • a new methodology and a new data source for education related travel credits
    • a new data source for traveller expenditure in business and other personal travel (excluding education) debits
    • a reclassification of data for conference and convention travellers for both credits and debits, and
    • a change to the treatment of data for visitors on prepaid package tours (credits).
9. RELEASE OF INFORMATION ON BUSINESS DEMOGRAPHICS

The past year saw the release of the following publications, which together significantly advanced users' understanding of the demographic characteristics of businesses:
    • Information Paper: A Statistical View of Counts of Businesses in Australia (cat. no. 8162.0)
    • Australian Bureau of Statistics Business Register, Counts of Businesses (cat. no. 8161.0.55.001)
    • Experimental Estimates: Entries and Exits of Business Entities (cat. no. 8160.0.55.001)
    • Characteristics of Small Business (cat. no. 8127.0)
10. DEVELOPMENT AND AGREEMENT WITH USERS ON A FRAMEWORK FOR FOREIGN AFFILIATES STATISTICS

There is an on-going strong demand for statistics measuring the economic activities of Australian controlled companies operating overseas and foreign controlled enterprises operating in Australia, including Australian resident parents of foreign affiliates. These statistics are called Foreign Affiliates Statistics, and major policy departments and analysts have identified them as vital to improving trade and investment policy decisions and negotiations. The ABS has developed a framework underpinning the collection and production of these that is consistent with the established Balance of Payments framework, addresses the major policy needs, and places the ABS in a position to provide leadership in the international development of Foreign Affiliates Statistics.

11. COLLECTION OF NATURAL RESOURCE MANAGEMENT STATISTICS

In response to a demand for a more extensive range of Natural Resource Management (NRM) statistics, the ABS commenced a biennial collection of statistics on a range of NRM topics. Native vegetation, weeds, pest, land and soil, and water were the five priority topics included in the 2004–05 NRM survey. The survey asked farmers to identify the extent and type of NRM issues present on their land and the activities they undertook to prevent or manage them. The results provide an important perspective into NRM issues and activities occurring on Australian farms, a perspective that may differ from scientific or satellite assessment.

12. TRIALS OF LAND PARCEL METHODOLOGY

An alternate survey methodology was trialled for collecting data about land-based activities, especially in relation to natural resource management issues. The land parcel survey project published results from two trials undertaken during 2005–06 – Land Management: Eurobodalla Shire NSW 2003–2004 (cat. no. 4651.0) and Land Management: Fitzroy and Livingstone Shires Queensland 2004–2005 (cat. no. 4651.0). The trials demonstrated the potential for using digital land parcel maps to provide a basic framework for land ownership that, when combined with land owner, land area and land use detail, can create a land cadastre suitable for use as a survey framework. In response to the success of these trials and the interest generated in the approach, the Environment and Energy Statistics program is considering how best to introduce the land parcel methodology into the regular ABS survey program.

13. PREPARATION FOR THE 2005–06 AGRICULTURAL CENSUS USING A FRAME FROM THE AUSTRALIAN BUSINESS REGISTER

Significant preparations for the 2005–06 Agricultural Census were undertaken during the year. A feature of the 2005–06 Agricultural Census is that it will be based on a business survey frame drawn from the Australian Business Register for the first time. The Census is the largest business collection undertaken by the ABS. Approximately 190,000 survey forms have been mailed to agricultural businesses. This is a significant increase in size from previous Censuses, and will result in a welcome increase in coverage for many users of agricultural statistics.

14. ADVANCES IN WATER ACCOUNTING

Water is a key theme of the Environment and Energy Statistics program. The second in a series of publications presenting detailed estimates on agricultural water use and management was released. Water use data were collected and a new Water Supply and Sewerage Services Survey was conducted in order to compile the Water Account, 2004–05. A Water Resource Accounting Workshop was jointly hosted by the National Water Commission and the ABS in late June 2005. The workshop recognised that water accounting to support the National Water Initiative is about integrated national accounting, measurement and monitoring, and is fundamental to achieving better water use and management in Australia. The workshop clearly recognised the importance of using standard definitions and systems for the production of water accounts.

DEVELOPMENTS IN CLIENT ENGAGEMENT AND OUTPUT ENHANCEMENT

The Economic Statistics program has been increasing its engagement with clients to better understand the policy drivers and analytical requirements and better explain the decisions the ABS makes on statistical priorities. This has been an increasing focus for senior staff, particularly those located in National Statistical Centres. One important output of these activities is the articulation of Information Development Plans in selected fields.

REVIEW OF THE SERVICE INDUSTRY SURVEY PROGRAM

An example of this engagement was the review of the service industry survey program which was undertaken as part of an overall strategy to provide relevant statistics about the service industries. Over forty submissions were received from stakeholders of the survey program. The information provided became important input into determining the relative priorities within the survey program. A survey program for the 2006–07, 2007–08 and 2008– 09 reference years was established and discussions have commenced on the development of the Cafes and Restaurants, Accommodation, Film and Video Production, Television, Music and Theatre Production and Performing Arts Venues topics scheduled for 2006–07.

MESH BLOCK CODING FOR THE AGRICULTURAL CENSUS

A major initiative to expand the amount of data available was announced at the launch of the 2005–06 Agricultural Census. The Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry gave notice that the Department of Agriculture, Fisheries and Forestry, together with the Department of the Environment and Heritage, will provide one million dollars through the National Heritage Trust to progress the coding of farm businesses to new ABS geographical building blocks known as mesh blocks. The National Water Commission has announced that it too will provide one million dollars for the project. By coding farm businesses in the Agricultural Census to mesh blocks, the ABS will be able to meet the needs of users to disseminate results for more flexible geographical areas such as Natural Resource Management regions, river basins and water catchments. An address coder being developed by the ABS will assist with consistent coding across ABS and non-ABS data sources.

CONTRIBUTION TO ENVIRONMENT REPORTING

There is considerable support for the ABS to take a more prominent role in environment reporting in Australia. Several fora have highlighted the need for an enduring environmental reporting system that is based on datasets that are collected in a nationally consistent way over a long period of time. In March 2006, the Environment and Energy Statistics program advisory board discussed a proposal on how the ABS could contribute to such a system. A key aspect of the ABS proposal was that the custodian of the underlying data sets will not change (unless there is agreement to do so).

As part of the support being given to the ABS to take a more prominent role, the ABS were invited to join a Working Group on Improved Environmental Reporting Systems in Australia. Chaired by the Department of the Environment and Heritage, the group includes members from the Department of Agriculture, Fisheries and Forestry, National Land and Water Resources Audit, the 2006 State of the Environment Committee Chair, and representatives from Queensland and South Australian government agencies.

TABLE 4.1: ECONOMIC STATISTICS PROGRAMS

National AccountsThe National Accounts program provides quarterly and annual data about the level of economic activity and the structure of the Australian and state economies within a coherent system of concepts and classifications.

International AccountsThe International Accounts program provides statistics on Australia's balance of payments (BOP) and international investment position and periodic information on the activities of non-resident affiliates of Australian enterprises and Australian affiliates of non-resident enterprises.

International TradeThe International Trade program provides statistics on Australia's exports and imports of goods and services. Statistics on merchandise (goods) exports and imports are derived from records lodged by exporters and importers with the Australian Customs Service.

Financial StatisticsThe Financial Statistics program compiles statistics on the financial assets, liabilities, borrowing and lending of financial institutions, and on the stocks and flows of finance for the various sectors of the economy.

Public Sector AccountsThe Public Sector Accounts program provides Government Finance Statistics (GFS) in respect of the Australian government, state and territory governments, their public non-financial corporations and public financial corporations, universities and local governments. The statistics are compiled predominantly from administrative data sources.

Prices Program The Prices program compiles the Consumer Price Index (CPI), the House Price Indexes (HPI), the Labour Price Index (LPI), which is an annual series comprising a quarterly Wage Price Index (WPI) and an annual non-wage price index, and a range of Producer and International Trade Price Indexes (PPIs and ITPIs).

Business IndicatorsThe Business Indicators program is responsible for the provision of a range of sub-annual main economic indicators. The indicators include:
    • monthly statistics of turnover by retail and selected service industries
    • quarterly statistics of company profits, inventories, sales and labour costs
    • quarterly statistics of actual and expected new capital expenditure
    • quarterly statistics of actual and expected mineral and petroleum exploration.
These data are essential inputs into the compilation of quarterly and annual national accounts and Input-Output tables.

Economy Wide StatisticsThe Economy Wide Statistics program is responsible for the provision of annual statistics that measure changes in the operations, structure and performance of all private and public trading enterprises (with the exception of finance and insurance). These statistics are derived from an annual economic activity survey and Business Income Tax data from the Australian Taxation Office.

Business Demographics The Business Demographics program is responsible for the provision of a range of information about the structure, characteristics and performance of the economy and conceptual developments regarding business definitions and classifications. This information is part of a consistent framework for all ABS business statistics and includes the development of an Integrated Business Characteristics Strategy. A particular but not exclusive focus of the program is on providing information about small businesses.

Innovation and Technology Statistics The Innovation and Technology Statistics program provides data to assist the understanding of the impact of research, experimental development, innovation and new technologies on economic and social outcomes. It provides measures of the penetration of selected new technologies, particularly information and communication technology (ICT), within Australia.

AgricultureThe Agriculture program aims to satisfy the statistical needs of agricultural policy makers and other key users of agricultural statistics by providing reliable and relevant information on commodity production, as well as the economic and environmental aspects of agricultural operations. The main collections include an annual agricultural survey, a five-yearly agricultural census, and a range of monthly, quarterly and ad hoc surveys covering specific aspects of agriculture and related activity.

MiningThe Mining program provides annual data about the structure, performance and production of the mining, electricity, gas, water and sewerage industries, as well as quarterly data on private sector exploration for minerals and petroleum in Australia.

Manufacturing The Manufacturing program provides statistics on the structure, financial operations, performance and production of the manufacturing industry.

Construction The Construction program provides regular data on levels of activity in residential building, non-residential building and engineering construction. It also provides periodic statistics on the structure, performance and characteristics of the construction industry.

Transport The Transport program provides statistics about transport related activities particularly relating to the composition and use of the road fleet in Australia. It also produces periodic statistics on the structure, performance and characteristics of the transport industry.

Service Industries The Service Industries program provides detailed information about the operations, performance and structure of Australia's service industries, including the not-for-profit sector, through a comprehensive program of periodic collections and use of non-ABS collected data. Statistics are produced for particular industries and activities in the following sectors of the economy: retail; wholesale; accommodation and restaurants; transport; telecommunications; property and business services; health; community services; culture; recreation; and personal services.

Tourism The Tourism program is responsible for producing regular, timely and coherent data on tourism activities. Data include the Australian Tourism Satellite Account, overseas arrivals and departures, tourism related exports and imports indicators, Survey of Tourist Accommodation and data collected under the Service Industries program.

Environment and Energy The Environment and Energy program provides a focal point for the ABS to meet the growing need for environment and energy information by integrating environmental, economic and social data.


Endnote 1 Using the statistical relationship between observed price changes and changes in the characteristics and qualities of the goods, a hedonic price index is developed that measures relative price changes while holding quality and underlying characteristics constant.

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