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1301.0 - Year Book Australia, 2007  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 24/01/2007   
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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 in some detail every 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 29.3 shows annual time series from 2000-01 to 2004-05. Table 29.4 shows expenditure on GDP in volume terms.


29.3 GDP ACCOUNT, Current prices

2000-01
2001-02
2002-03
2003-04
2004-05
$m
$m
$m
$m
$m

Final consumption expenditure
General government
125,264
132,301
141,564
150,328
162,993
Households
411,024
434,552
462,095
493,287
522,551
Total final consumption expenditure
536,288
566,853
603,659
643,615
685,544
Gross fixed capital formation
Private
126,443
141,152
165,081
181,019
193,320
Public
25,031
27,679
28,708
30,704
33,590
Total gross fixed capital formation
151,474
168,831
193,788
211,722
226,910
Changes in inventories
818
-102
2,829
5,944
2,123
Gross national expenditure
688,580
735,582
800,276
861,282
914,577
Exports of goods and services
154,669
154,778
149,691
144,676
163,845
less Imports of goods and services
153,910
154,580
167,170
167,706
189,156
Statistical discrepancy(a)
-
-
-
-
2,258
Gross domestic product
689,340
735,783
782,798
838,251
891,524
Compensation of employees
339,301
356,095
377,268
398,662
426,419
Gross operating surplus
210,199
225,841
242,162
263,623
286,978
Gross mixed income
59,088
69,645
70,698
76,849
76,971
Total factor income
608,588
651,581
690,128
739,134
790,368
Taxes less subsidies on production and imports
80,752
84,202
92,670
99,117
103,281
Statistical discrepancy(b)
-
-
-
-
-2,125
Gross domestic product
689,340
735,783
782,798
838,251
891,524

(a) Expenditure-based.
(b) Income-based.
Source: Australian System of National Accounts, 2004-05 (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 2.3% in 2004-05. This was lower than the 4.0% recorded in the previous year.


29.4 EXPENDITURE ON GDP, Volume measures(a)(b)

2000-01
2001-02
2002-03
2003-04
2004-05
$m
$m
$m
$m
$m

Final consumption expenditure
General government
136,601
140,386
145,139
150,329
155,940
Households
438,348
451,190
467,551
493,287
514,349
Total final consumption expenditure
574,915
591,545
612,663
643,615
670,289
Gross fixed capital formation
Private
130,842
143,672
167,019
181,019
189,283
Public
25,429
27,704
28,630
30,704
33,071
Total gross fixed capital formation
156,317
171,424
195,653
211,722
222,354
Domestic final demand
730,552
762,580
808,291
855,338
892,644
Changes in inventories
2,195
31
1,030
5,944
2,485
Gross national expenditure
732,193
763,405
810,358
861,282
895,129
Exports of goods and services
144,862
143,763
142,674
144,676
148,587
less Imports of goods and services
129,787
131,621
148,809
167,706
188,216
Statistical discrepancy(c)
-
-
-
-
2,264
Gross domestic product
752,434
780,817
806,161
838,251
857,765

(a) Reference year is 2003-04.
(b) Volume measures for years other than 2003-04 and 2004-05 are not additive.
(c) Expenditure-based.
Source: Australian System of National Accounts, 2004-05 (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 29.5 and 29.6 show how the shares of total factor income accruing to wages and to profits have changed since 1968-69. (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 62.6% in 1974-75. The wages share in 2004-05 was 54.0%, relatively unchanged from the previous year. The wages share has not been at this level since 1988-89. The profits share of total factor income has been growing steadily since 1998-99. In 2004-05 profits share was 26.2%, the highest share recorded.

29.5 WAGES SHARE OF TOTAL FACTOR INCOME 29.5 WAGES SHARE OF TOTAL FACTOR INCOME

29.6 PROFITS SHARE OF TOTAL FACTOR INCOME 29.6 PROFITS SHARE OT 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 29.7 shows annual time series from 2000-01 to 2004-05.


29.7 NATIONAL INCOME ACCOUNT, Current prices

2000-01
2001-02
2002-03
2003-04
2004-05
$m
$m
$m
$m
$m

INCOME

Compensation of employees
339,301
356,095
377,268
398,662
426,419
Gross operating surplus
210,199
225,841
242,162
263,623
286,978
Gross mixed income
59,088
69,645
70,698
76,849
76,971
Taxes less subsidies on production and imports
80,752
84,202
92,670
99,117
103,281
Net primary income from non-residents
-18,737
-19,667
-22,491
-23,734
-31,216
Gross national income
670,603
716,116
760,307
814,517
862,433
Net secondary income from non-residents
32
-17
-214
-269
-420
Gross disposable income
670,635
716,099
760,093
814,248
862,013

USE OF DISPOSABLE INCOME

Final consumption expenditure
General government
125,264
132,301
141,564
150,328
162,993
Households
411,024
434,552
462,095
493,287
522,551
Total final consumption expenditure
536,288
566,853
603,659
643,615
685,544
Net saving(a)
26,709
33,452
34,405
42,384
41,698
Consumption of fixed capital
107,638
115,794
122,029
128,249
134,771
Total use of gross disposable income
670,635
716,099
760,093
814,248
862,013

(a) Net saving is derived as a balancing item.
Source: Australian System of National Accounts, 2004-05 (5204.0).


Graph 29.8 shows net saving by institutional sector as a proportion of GDP for the years 1968-69 to 2004-05. Household net saving as a percentage of GDP generally rose between 1968-69 and 1974-75. Since then it has fallen from a high of 11.4% in 1974-75 to a position in 2002-03 where consumption by households exceeded income and, consequently, household net saving was negative for the first time. In 2004-05 consumption exceeded household income, by $18.4 billion (b) (table 29.9).

29.8 NET SAVING, Relative to GDP 29.8 NET SAVING, Relative to GDP


General government net saving was negative from 1974-75 to 1996-97 (except for 1988-89). In 2004-05 it was positive at 2.4% of GDP ($21.4b). In 2004-05 net saving of non-financial corporations was 1.6% of GDP ($14.1b). Net saving of financial corporations was negative from 1981-82 to 1986-87, the only period for which this sector has recorded negative net saving. In 2004-05 net saving of financial corporations was 2.8% of GDP ($24.6b).

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 29.9 shows annual time series from 2000-01 to 2004-05.


29.9 NATIONAL CAPITAL ACCOUNT, Current prices

2000-01
2001-02
2002-03
2003-04
2004-05
$m
$m
$m
$m
$m

Net saving
Non-financial corporations
1,788
12,275
13,190
19,095
14,135
Financial corporations
12,413
9,040
14,579
19,667
24,557
General government
2,206
6,652
16,870
18,951
21,413
Households
10,303
5,486
-10,235
-15,329
-18,416
Total net saving
26,709
33,452
34,405
42,384
41,698
Consumption of fixed capital
107,638
115,794
122,029
128,249
134,771
Net capital transfers receivable from non-residents
1,182
1,186
1,103
1,167
1,203
Gross saving and capital transfers
135,529
150,432
157,537
171,800
177,672
Gross fixed capital formation
Private
126,443
141,152
165,081
181,019
193,320
Public corporations
8,763
10,126
10,939
11,655
13,917
General government
16,268
17,553
17,769
19,048
19,673
Total gross fixed capital formation
151,474
168,831
193,788
211,722
226,910
Changes in inventories
Private non-farm
1,342
-300
3,347
6,281
1,940
Farm and public authorities
-524
198
-518
-337
182
Total changes in inventories
818
-102
2,829
5,944
2,123
Acquisitions less disposals of non-produced non-financial assets
73
170
112
72
3
Statistical discrepancy(a)
-
-
-
-
4,383
Net lending to non-residents
-16,837
-18,470
-39,193
-45,938
-55,747
Total capital accumulation and net lending
135,529
150,432
157,537
171,800
177,672

(a) Expenditure-based discrepancy less income-based discrepancy.
Source: Australian System of National Accounts, 2004-05 (5204.0).


Graph 29.10 shows gross fixed capital formation (investment) by institutional sector as a proportion of GDP. For non-financial corporations this proportion has generally been in the range 10-12% of GDP since 1968-69. In 2004-05 investment by non-financial corporations was 11.5% of GDP. Household investment has generally remained at around 9% of GDP since the mid-1970s. However, over the past three years household investment has risen to over 10% of GDP. In 2004-05 the ratio of household investment to GDP was 10.8%. General government investment as a proportion of GDP peaked at 4.6% in 1975-76. It has generally fallen since and was 2.2% of GDP in 2004-05. Financial corporations investment peaked in 1989-90 at 2.0% of GDP, and was 0.9% of GDP in 2004-05.

29.10 INVESTMENT, Relative to GDP 29.10 INVESTMENT, Relative to GDP


Graph 29.11 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 has changed from a net lender to a net borrower. In 2004-05 household lending was -7.1%. Non-financial corporations have been net borrowers over the whole period from 1967-68 to 2004-05 (except for 1993-94), and the amounts borrowed have fluctuated significantly from year to year. As a proportion of GDP, their net borrowing was 2.9% in 2004-05.

In 2004-05 financial corporations net lending represented 2.5% 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 in 2002-03. In 2004-05 general government net lending represented 1.7% of GDP.

29.11 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 29.12 shows the external account for the last five years.


29.12 EXTERNAL ACCOUNT, Current prices

2000-01
2001-02
2002-03
2003-04
2004-05
$m
$m
$m
$m
$m

INCOME ACCOUNT

Income of non-residents
Imports of goods and services
153,910
154,580
167,170
167,706
189,156
Primary income receivable
Compensation of employees
1,057
1,196
1,324
1,619
1,743
Property income receivable
33,958
34,057
36,666
38,901
49,991
Total primary income receivable
35,015
35,253
37,990
40,520
51,734
Secondary income receivable
4,421
4,297
4,447
4,542
4,689
Total income of non-residents
193,346
194,130
209,607
212,768
245,579
Uses of income of non-residents
Exports of goods and services
154,669
154,778
149,691
144,676
163,845
Primary income payable
Compensation of employees
912
902
900
989
1,108
Property income payable
15,366
14,684
14,599
15,797
19,410
Total primary income payable
16,278
15,586
15,499
16,786
20,518
Secondary income payable
4,453
4,280
4,233
4,273
4,269
Balance on external income account
17,946
19,486
40,184
47,033
56,947
Total use of income of non-residents
193,346
194,130
209,607
212,768
245,579

CAPITAL ACCOUNT

Balance on external income account
17,946
19,486
40,184
47,033
56,947
Capital transfers receivable
1,260
1,357
1,301
1,404
1,546
less Capital transfers payable
2,442
2,543
2,404
2,571
2,749
Total net capital transfers
-1,182
-1,186
-1,103
-1,167
-1,203
Gross saving and capital transfers
16,764
18,300
39,081
45,866
55,744
Acquisitions less disposals of non-produced non-financial assets
-73
-170
-112
-72
-3
Net lending (+) / net borrowing (-)
16,837
18,470
39,193
45,938
55,747
Total capital accumulation and net lending (+) / net borrowing (-)
16,764
18,300
39,081
45,866
55,744

Source: Australian System of National Accounts, 2004-05 (5204.0).


Australia has generally been a net borrower of funds from overseas. The only exception to this pattern was in 1972-73. Net borrowing from non-residents (i.e. negative net lending to non-residents), expressed as a proportion of GDP, increased significantly during the early-1980s and has remained at relatively high levels since then. Graph 29.13 shows net lending to non-residents as a proportion of GDP since 1968-69.

29.13 NET LENDING TO OVERSEAS, Relative to GDP 29-13 NET LENDING TO OVERSEAS, Relative to GDP


The importance of foreign trade to the Australian economy is illustrated by graph 29.14, which shows the ratios of imports and exports of goods and services to GDP. In 2004-05 the import ratio was 21.2% and the export ratio, which had fallen for the previous three years, was 18.4%.

29.14 EXPORTS AND IMPORTS, Relative to GDP 29.14 EXPORTS AND IMPORTS, Relative to GDP

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