QUALITY DECLARATION - SUMMARY
Balance of payments and international investment position statistics are produced using information from a wide range of data sources. These include administrative data from various government organisations and ABS survey data. Typically, administrative data are collected for reasons other than statistical analysis, such as administration and enforcement of government policy. Data are extensively analysed by the ABS to ensure they are of appropriate quality for inclusion in ABS statistics.
For further information on the institutional environment of the ABS, financing and governance arrangements, and mechanisms for scrutiny of its operations, see ABS Institutional Environment.
Australia's balance of payments is a statistical statement providing a systematic record of Australia's economic transactions with the rest of the world. It may be described as a system of consolidated accounts where the accounting entity is the Australian economy and the entries are the transactions between residents of Australia and non-residents. Australia's international investment position summarises the level of Australia's foreign financial assets and liabilities at a point in time, together with details of changes in these levels since the previous reference point. The changes in level result from financial transactions, changes in prices and exchange rates and other adjustments. The international investment position is fully integrated with Australia's balance of payments.
A number of data sources are used in compiling balance of payments statistics across the current, capital and financial accounts. Sources include business surveys, Australian Customs and Border Protection Service (Customs) records and other administrative by-products. The main source of Australia's financial account and international investment position data is the Survey of International Investment conducted quarterly by the ABS.
Australian balance of payments and international investment position (BoP/IIP) statistics are used in a variety of ways. The main users are economic and industry analysts and policy advisers in Australian government agencies, private sector economic analysts and dealers, academics, the media and international organisations.
The statistics are used to analyse Australia's external performance, formulate and evaluate macro-economic policy (including trade policy, trade treaties and foreign investment policy), analyse trends in income, capital flows and patterns of investment into and out of the economy, and to undertake international comparisons. The international accounts are inputs to the Australian national accounts, providing the external transactions accounts and the external assets and liabilities components of the national balance sheet.
The quarterly balance of payments and international investment position is released about 43 working days (or two months) after the end of each quarter. In general, source data used in the compilation of the balance of payments statistics are timely. The main data sources for goods, some services, income, financial account and the international investment position provide timely information relating to the latest quarter. Some data are collected with a lag of one or two quarters (e.g. expenditure by travellers), are available annually (e.g. fees paid by foreign students studying in Australia) or less frequently (e.g. information about embassies and consulates in Australia).
The ABS uses several estimation methods to account for the less timely source data. Extrapolation methods are used to project particular series forward until survey or administrative results are available. Similarly, when data sources or data models provide data on a less frequent basis than quarterly, data are interpolated between periods to obtain sufficiently frequent estimates.
Sound data collection and methodological systems, conformity to international standard frameworks, and the use of analytical tools all contribute to high quality outputs. The ABS ensures that survey based information are designed, tested and evaluated to a high quality standard. Data based on administrative data sources are subject to classification, processing, coverage and timing adjustments and modelling as appropriate. Where possible, data are validated against independent sources both within the ABS and externally to ensure significant transactions are reflected appropriately. For example, the financial press is monitored for large international transactions relating to the export and import of goods and services, change of ownership and direct and portfolio investments. Announced profits and dividends for investment income components, share market movements and interest rate movements for price changes, and movements in exchange rates for exchange rate impacts are also monitored. The statistics are investigated to ensure that these transactions are reflected appropriately. Data confrontation studies are used to compare and reconcile data items from different collections on an enterprise basis if possible.
Despite the quality assurance undertaken, the data may not be completely accurate for a number of reasons. Sampling error occurs when estimates are derived from a sample survey and the whole population is not enumerated. Estimation methods are applied to incomplete source data. Extrapolation methods are used to project particular series forward until survey or administrative results become available, and for data provided on an irregular basis.
The general policy adopted in relation to revisions is to incorporate more accurate data for recent quarters into the estimates as they become available. However, to minimise disruption to the historical time series, revisions affecting periods prior to the previous financial year are usually applied once a year - in the June quarter issue for income, financial account and international investment position and in the September quarter issue for goods, services and capital account.
For more information please refer to Balance of Payments and International Investment Position, Australia: Concepts, Sources and Methods (cat. no. 5331.0).
The conceptual framework and classification structure of the Australian international accounts follow both the International Monetary Fund (IMF) Balance of Payments and International Investment Position Manual, Sixth Edition, 2008 (BPM6) and the System of National Accounts, 2008 (SNA08) and other relevant international frameworks. Modifications and extensions take account of domestic user requirements for additional details and views of the data. The other international frameworks include the Organisation of Economic Cooperation and Development (OECD) Benchmark Definition of Foreign Direct Investment, 4th Edition, 2008 and the Manual on Statistics of International Trade in Services (MSITS).
The ABS provides aggregated statistics (by partner country where possible) to international organisations like the IMF and the OECD, which reconcile information across countries.
The ABS makes available historical time series dating back to 1959. Some quarterly balance of payments series are available in original, seasonally adjusted, and trend terms. When changes in source data, methodology or statistical techniques are introduced, historical time series are revised back as far as reasonably possible.
Balance of payments and international investment position statistics are consistent and reconcilable with the international merchandise trade, national accounts, monetary, financial and external debt statistics. For further information please refer to Balance of Payments and International Investment Position, Australia: Concepts, Sources and Methods (cat. no. 5331.0).
The analytic presentation of balance of payments provides balances for the current, capital and financial accounts, with subsidiary balances for goods, services, primary income and secondary income. In the current account, gross credits and debits series for goods, services, income and current transfers are distinct from each other. The current account series, in current prices, are provided in original, seasonally adjusted and trend estimates terms. Implicit price deflators, chain Laspeyres price indices and terms of trade are also included. The capital account presents balances for capital transfers and acquisition/disposal of non-produced, non-financial assets. Balances of net asset and liability for direct investment, portfolio investment, financial derivatives, other investment, and international reserve assets are published in the financial account.
For more information on seasonal adjustment and trend estimation, please refer to the Information Paper: A Guide to Interpreting Time Series - Monitoring Trends, 2003 (cat. no. 1349.0).
Analytic presentations of international investment position data provide Australia's net international investment position as the difference between the levels of gross foreign financial assets and liabilities, as well as the sum of net foreign equity and net foreign debt. International investment statistics align with BPM6. Data are presented in time series and reconciliation formats.
The 'Notes' and 'Analysis and Comments' sections of the publication provide advice on any changes which may occur. If major changes are anticipated to any of the classifications, information papers associated with the publication are released in advance to advise the change and implementation plans. Although out of date in some details, the Balance of Payments and International Investment Position, Australia: Concepts, Sources and Methods (cat. no. 5331.0) gives a good description of the scope, methods and concepts underpinning the balance of payments and international investment position statistics.
Comprehensive quarterly balance of payments and international investment position statistics are available free of charge from the ABS website. The publication is available in pdf format along with time series and data cubes for major data series. The publication and ABS website contain analysis of the latest data and supporting graphs and charts.
The Balance of Payments and International Investment Position, Australia: Concepts, Sources and Methods (cat. no. 5331.0) publication provides users with detailed information on the international accounts. It describes in detail the conceptual framework underlying the international accounts statistics, classification of data items, presentations and publications. Information is also presented on data sources, compilation methodologies, data quality, relationships with national accounts and emerging issues.
There are a range of information papers, notes, publications and feature articles that provide information on a number of data quality issues. These include changes to the classifications, systems, concepts, standards or methodology, major data revisions and changes in data dissemination practices. The purpose of this information is to supplement and update the concepts, sources and methods.