Australian Bureau of Statistics
1301.0 - Year Book Australia, 2007
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 24/01/2007
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NATIONAL INCOME, EXPENDITURE AND PRODUCT ACCOUNTS
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.
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.
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.
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).
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.
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.
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.
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.
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.
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%.
This page last updated 16 January 2008
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