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8 Australia's economic territory, on a balance of payments basis, is the area under the effective control of the Australian government. It includes the land area, airspace, territorial waters, including jurisdiction over fishing rights and rights to fuels and minerals. Australian economic territory also includes territorial enclaves in the rest of the world. These are clearly demarcated areas of land, located in other countries and which are owned or rented by the Australian government for diplomatic, military, scientific or other purposes. Specifically, the economic territory of Australia consists of:
9 Because of administrative complexities and measurement difficulties, Norfolk Island transactions with the rest of the world will not always be captured in all relevant balance of payments statistics. Most of the transactions involving Norfolk Island are not material to Australia's trade performance and not capturing these transactions will not distort these statistics. However, any significant transactions will be identified and included in the relevant statistics.
SEASONALLY ADJUSTED AND TREND ESTIMATES
10 Quarterly original estimates are volatile, being subject to calendar–related and large irregular influences. Seasonally adjusted estimates are derived by estimating and removing from the original series systematic calendar related effects, such as seasonal (e.g. Christmas), trading day and moving holiday (e.g. Easter) influences. Seasonal adjustment does not aim to remove the irregular or non–seasonal influences which may be present in any particular quarter. These irregular influences may reflect both random economic events and difficulties of statistical recording.
11 The seasonally adjusted statistics in this publication use the concurrent seasonal adjustment technique and Autoregressive Integrated Moving Average (ARIMA) modelling to estimate factors for the current and previous quarters. Under concurrent seasonal adjustment, the estimates of seasonal factors are fine–tuned as new or revised original estimates become available each period. The seasonally adjusted estimates are subject to revisions at each reference quarter as the estimates of seasonal factors are improved. In most cases chain volume measures are adequately seasonally adjusted by using the current price values' seasonal factors, however, some goods components are independently seasonally adjusted.
12 ARIMA modelling relies on the characteristics of the series being analysed to project future period data. ARIMA modelling is used on a case–by–case basis where it results in reduced revisions to seasonally adjusted series when subsequent data becomes available. The projected values are temporary, intermediate values, that are only used internally to improve the estimation of the seasonal factors. The projected data do not affect the original estimates and are discarded at the end of the seasonal adjustment process. The ARIMA model is assessed as part of the annual review for both chain volume measures and current price values and following the 2013 annual review, the majority of directly seasonally adjusted time series in the current account use an ARIMA model.
13 Trend estimates are published as the quarter–to–quarter movements of the seasonally adjusted estimates may not be reliable indicators of underlying behaviour because they include irregular or non–seasonal movements. Trend estimates reduce the effect of these movements as they are derived by applying a 7–term Henderson moving average to the seasonally adjusted series. The 7–term Henderson moving average (like all Henderson averages) is symmetric, but as the end of a time series is approached, asymmetric forms of the average are applied. While the asymmetric weights enable trend estimates for recent quarters to be produced, it does result in revisions to the estimates for the most recent three quarters as additional observations become available. Revisions to trend estimates can also occur because of revisions to the original data and as a result of the re–estimation of the seasonal factors. Trend estimates should be used with caution, especially around the time of unusual influences, until these have been appropriately taken into account.
14 Information papers and articles on time series methods are available on the ABS website:
VOLUME AND PRICE ESTIMATES
15 Volume data are in terms of chain volume estimates (see paragraph 16) and price data are in terms of implicit price deflators (see paragraph 17).
CHAIN VOLUME MEASURES
16 Chain volume measures are derived by deflating the original current price series by specially compiled measures of price change. The reference year for chain volume measures is the year prior to the latest complete financial year. The reference year is updated with the release of each September quarter issue of the publication Balance of Payments and International Investment Position, Australia (cat no. 5302.0). Prior to the reference year chain volume measures are non–additive, meaning the component chain volume measures of an aggregate will not add through to the aggregate. From September quarter 2012, chain volume measures for goods are derived by deflating the original current price series by International Trade Price Indexes. For more information on chain volume measures refer to Information Paper: Australian National Accounts, Introduction of Chain Volume and Price Indexes (cat. no. 5248.0).
IMPLICIT PRICE DEFLATOR (IPD)
17 The quarterly implicit price deflators (IPDs) are derived by dividing current price estimates by the corresponding chain volume measures. Movements in IPDs can be greatly affected by changes in the physical composition of the aggregates and their components. The quarterly IPDs derived from seasonally adjusted data are preferred to those using original data because the seasonal adjustment process removes some of the seasonal changes in the composition of this series. However, the seasonal adjustment process itself is also a possible source of distortion.
CHAIN LASPEYRES PRICE INDEXES
18 The chain Laspeyres price indexes are derived by combining individual component prices with weights which reflect the average relative importance of the components in the previous year. These are then indexed to the relevant reference year. For all periods since the latest reference year, reference year weights are used.
RELATED PRODUCTS AND PUBLICATIONS
19 The final outcomes and more detailed breakdowns of the estimates in this publication will be published in the next quarterly issue of Balance of Payments and International Investment Position, Australia (cat. no. 5302.0).
20 The current issue of Balance of Payments and International Investment Position, Australia (cat. no. 5302.0) includes unrevised estimates for prior periods.
21 Users may also wish to refer to the following publications which can be downloaded free of charge from the ABS website:
22 Current publications and other products released by the ABS are available from the Statistics tab on the ABS website. The ABS also issues a daily Release Advice on the website which details products to be released in the week ahead. Theme pages are available on the ABS website.
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