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COMPONENTS OF THE INTERNATIONAL ACCOUNTS
Australia’s international merchandise trade statistics are compiled in broad agreement with the UN recommendations for the compilation of international merchandise trade statistics. More information on the concepts, sources and methods used is included in International Merchandise Trade, Australia: Concepts, Sources and Methods (5489.0).
International trade in services
International trade in services covers all services rendered by Australian residents to non-residents (exports) and by non-residents to residents (imports). Services are broadly defined as products other than tangible goods, although they also include transactions in certain goods such as those purchased by travellers.
As international trade in services covers a diverse range of activities, a variety of data sources and methods are used to compile estimates of the different service types.
Australia’s international trade in services statistics are compiled in accordance with the International Monetary Fund’s Balance of Payments Manual, fifth edition. This framework has been further elaborated in the ‘Extended Balance of Payments Services Classification’, as detailed in the UN publication Manual on Statistics of International Trade in Services, 2002. International trade in services statistics are compiled for transportation, travel, communications, construction, computer and information services, royalties and licence fees, other business services, personal, cultural and recreational services and government services. Some information is also available by partner country and state.
More information on the concepts, sources and methods used to produce Australia’s international trade in services statistics is included in Balance of Payments and International Investment Position, Australia: Concepts, Sources and Methods, 1998 (5331.0).
Income, comprising investment income (e.g. dividends and interest) and compensation of employees (e.g. wages), covers income earned by Australian residents from non-residents (credits) or earned by non-residents from residents (debits).
Current transfers and the capital account
Current transfers cover the offsetting entries required when resources are provided, without something of economic value being received in return. When non-residents provide resources to Australian residents, offsetting credits are required; when residents provide resources to non-residents, offsetting debits are required. General government transfers (e.g. official foreign aid) are distinguished from transfers by other sectors.
The capital account covers capital transfers (such as migrants’ funds), with general government distinguished from other sectors, and the acquisition/disposal of non-produced, non-financial assets.
Financial account and international investment position
The initial dissection of the financial account is by functional type of capital - direct investment, portfolio investment, financial derivatives, other investment and reserve assets. Where appropriate, these components are further dissected into assets and liabilities. Within the asset and liability categories, details are presented of instruments of investment and resident sectors (for other than direct investment), and in some cases the contractual maturity of the instruments.
The primary distinction used in international investment position statistics is between assets and liabilities. Assets primarily represent Australian investment abroad, and liabilities primarily represent foreign investment in Australia. The difference between the two represents the net international investment position (graph 31.14 and table 31.17). Australian investment abroad refers to the stock of foreign financial assets owned by Australian residents, after netting off any debt liabilities of Australian direct investors to their direct investment enterprises abroad. Conversely, foreign investment in Australia refers to the stock of financial assets in Australia owned by non-residents, after netting off any debt claims of Australian direct investment enterprises on their foreign direct investors. The breakdown below this asset/liability presentation is by functional type of capital (table 31.16).
While many types of instruments of investment can be identified, similar instruments are combined for analytical reasons and ease of reporting.