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Current price estimates - annual
Gross State product and total factor income
28.9 The estimates of gross State product are produced by summing the income components of gross State product: compensation of employees, gross operating surplus, gross mixed income, and taxes less subsidies on production and imports. Total factor income is derived by summing compensation of employees, gross operating surplus and gross mixed income. Estimates of total factor income by State and Territory are compiled by industry at the ANZSIC Division level. However, State by industry estimates are not available for gross State product as industry estimates are not available at the State level for taxes less subsidies on production and imports.
Compensation of employees
28.10 State by industry estimates of compensation of employees (COE) are derived from essentially the same data sources as those used for the national estimates. They are derived as the sum of the following five elements:
28.11 Not all the information is available on a State by industry basis, so a matrix consisting of available State by industry data is constructed for total compensation of employees. The matrix is balanced to two sets of control totals using a mathematical estimation technique known as the residual allocation system (RAS). The first control total is the total of all industries for each State or Territory, while the second is the total of each industry for all States and Territories combined. RAS is a procedure which requires the successive scaling of column and then row elements by successively prorating to column totals and row totals until the matrix elements are fully reconciled with both row and column control totals. The number of iterations required will depend on the consistency of the initial data matrix with the row and column control totals. The accuracy of the final matrix derived will depend on the suitability of the initial matrix as an indicator.
28.12 There is a minor difference in definition between COE in the gross product tables and the household income tables, for both the national and the State estimates. The reason for this difference is discussed in Chapter 19.
Gross operating surplus plus gross mixed income
28.13 Estimates of gross operating surplus (GOS) plus gross mixed income (GMI), by State and industry, are generally derived by allocating the national industry estimates of GOS plus GMI by State. However, GOS for general government is allocated by State only in total, not by industry. Consequently, the sum of GOS for non-financial corporations, financial corporations and dwellings owned by persons, and GMI for unincorporated enterprises, is allocated by State for each industry other than public administration and defence. The abbreviation 'GOSMI' will be used in the following discussion to represent the aggregate GOS (excluding GOS for general government) plus GMI.
Agriculture, forestry and fishing
28.17 Agriculture GOSMI by State is obtained as a by-product of national statistical estimation. The methods and data sources used to derive State estimates are much the same as those used to derive estimates for Australia. Except for the latest year State splits of the gross value of production and farm costs are obtained respectively from Agriculture, Australia (Cat. no. 7113.0) and the Agricultural Finance Survey. For the latest year the only State estimates that are available are volumes for major crops (from ABARE) and ABS data on livestock slaughterings. For all other components of production and for all farm costs State estimates for the latest year are based on the State distributions from the previous year. Estimates of GOSMI for forestry and fishing are allocated to States in line with income tax-based estimates of GMI for unincorporated enterprises classified to forestry and fishing. GOS for State and local public non-financial corporations classified to forestry and fishing are allocated to States directly using data provided by the ABS Public Finance Section.
28.18 ABS economic censuses and surveys data (from Mining, Electricity and Gas Operations, Australia, Preliminary (Cat. no. 8401.0) and Mining Operations Australia (Cat. no. 8415.0)) for mining value added less wages and salaries by State are used to derive State splits of the Australian total for mining GOSMI. Bass Strait and North West Shelf oil and gas production are regarded as occurring on the domestic territory of Victoria and Western Australia, respectively. Oil and gas production in the Timor Gap is divided between the Northern Territory and Western Australia on the basis of which State has administrative control under the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990.
28.19 Industry gross value added less wages and salaries by State, from Manufacturing Industry, Australia (Cat. no. 8221.0), is used to derive State splits of the Australian total for manufacturing GOSMI.
Electricity, gas and water supply
28.20 Estimates for GOS of public non-financial corporations by State are derived from the same sources as those used for the national estimates. For public non-financial corporations, government finance information, which is based on the enterprise as the statistical unit, is supplemented by information from economic censuses and surveys to transfer the coal mining activities of some State electricity authorities to the mining sector. GOS of the Snowy Mountains Hydro Electricity Authority is allocated wholly to New South Wales. The remaining portion of GOSMI is allocated to States using economic censuses and surveys data from Electricity, Gas, Water and Sewerage Industries, Australia (Cat. no. 8208.0).
28.21 The Australian total for GOSMI is allocated to States using benchmark data from Private Sector Construction Industry: Private Sector Construction Establishments, Details of Operations, Australia (Cat. no. 8772.0). Data are interpolated between benchmarks and extrapolated after the latest benchmark using a composite indicator derived from the following components:
28.22 Benchmark estimates for GOSMI for 1991-92 were derived using Retail Census data for that year, as the ABS collection for the wholesale industry in respect of that year did not provide any State information. Retail turnover from Retail Trade, Australia (Cat. no. 8501.0) is used to extrapolate the 1991-92 State estimates of GOSMI.
28.23 Benchmark data to allocate the Australian total for GOSMI across States for 1991-92 were obtained from Retail Industry, State and Territory Summary (Cat. no. 8625.0). These benchmarks are extrapolated on the basis of indicator data comprising retail turnover from Retail Trade, Australia (Cat. no. 8501.0).
Accommodation, cafes and restaurants
28.24 State indicator data are obtained from Accommodation Industry, Australia (Cat. no. 8695.0) and Clubs, Pubs, Taverns and Bars, Australia (Cat. no. 8687.0). A composite indicator is derived to allocate GOSMI for Australia by State.
Transport and storage
28.25 GOS for State and local public non-financial corporations is directly allocated to States using data supplied by the ABS Public Finance Section. Because the activity of national public non-financial corporations crosses State borders, indirect indicators are used to allocate GOS of this subsector to States. The remaining GOSMI is split into components of transport and storage which are then allocated to States using a variety of activity indicators. Examples of these indicators include domestic and international passenger traffic through Australian airports from the Department of Transport and Regional Services, overseas shipping and cargo movements, appropriate components of household final consumption expenditure by State, household income by State and in some cases mean population by State.
28.26 Public non-financial corporations GOS is split by State using wages and salaries data for Telstra and Australia Post. The remaining portion of GOSMI is allocated to States using appropriate components of household final consumption expenditure.
Finance and insurance
28.27 Labour force employment data by State by ANZSIC Subdivision for this industry are used for the State allocation of Australian control totals for GOSMI.
Property and business services
28.28 State ratios for allocating GOSMI were derived using turnover from the following ABS publications covering business and professional services: Legal and Accounting Services, Australia (Cat. no. 8678.0); Real Estate Agents Industry, Australia (Cat. no. 8663.0); Technical Services, Australia (Cat. no. 8676.0); Computing Services Industry, Australia (Cat. no. 8669.0); and Consultant Engineering Services, Australia (Cat. no. 8693.0).
28.30 Household final consumption expenditure on education by State is used to split the Australian total for GOSMI by State.
Health and community services
28.31 Australian estimates of GOSMI are calculated separately for health and for community services. Household final consumption expenditure by State for doctors, hospitals and dentists is used to split the Australian estimate for health GOSMI by State. Movements in mean population are used to extrapolate 1995-96 benchmarks for community services by State which were derived from Community Services, Australia, Preliminary (Cat. no. 8694.0). The respective State estimates for health and for community services are then summed to derive the State estimates for health and community services.
Cultural and recreational services
28.32 Public non-financial corporations GOS is allocated to States using data supplied by ABS Public Finance Section. The private sector portion of GOSMI is allocated to States using a variety of economic activity indicators. These indicators include HFCE admissions data by State, HFCE other recreation data by State, HFCE gambling data by State, and radio and television stations GOS by State from the Australian Broadcasting Tribunal Annual Report.
Personal and other services
28.33 Public non-financial corporations GOS is allocated to States using data supplied by ABS Public Finance Section. HFCE on other services is used as an indicator to derive the State split of private sector GOSMI.
Ownership of dwellings
28.34 State estimates of GOS for ownership of dwellings are derived using the same data sources and methodology as used for the national estimates (see Chapter 20).
28.35 General government GOS comprises only consumption of fixed capital (COFC) and is allocated to States in two parts. The total State and local government component of COFC is allocated to individual States using a simple model based on an accumulation of State and local government gross fixed capital formation since 1961-62. The allocation of national general government COFC to individual States is based on a similar model of accumulated gross fixed capital formation since 1961-62.
Taxes less subsidies on production and imports
28.36 Taxes and subsidies on production and imports relating to the State and local general government sector are allocated directly to the State in which they are collected or paid. It is assumed that all production taxes collected by a particular State government are paid by entities resident in that State, and that any subsidies paid by a State government are paid to resident entities of that State.
28.38 State estimates of agricultural GOSMI and agricultural income are derived by dissecting the Australian estimates for the relevant components. Gross value of production is available by State in Agriculture, Australia (Cat. no. 7113.0). Production costs (marketing, seed and fodder, and other costs) and the production valuation adjustment are distributed by State using area and production statistics in Agriculture, Australia (Cat. no. 7113.0), and in Livestock Products, Australia (Cat. no. 7215.0). Compensation of employees is available by State from the Agricultural Finance Survey. Estimates of consumption of fixed capital, interest and land rent are allocated to States using information from Taxation Statistics as an indicator. The taxes less subsidies on production and imports component is split by State using gross value of production data for relevant commodities.
28.39 State estimates of household income and uses of income are derived by aggregating separate State estimates for each of the components. Except for COE and GOS from dwellings owned by persons, State estimates are derived by dissecting the Australian estimates, using a variety of indicators.
Household final consumption expenditure
28.44 Annual estimates of household final consumption expenditure by State are the sum of the quarterly estimates described in paragraphs 28.55 and 28.56.
Private gross fixed capital formation
28.45 Annual estimates of private gross fixed capital formation by State are the sum of the quarterly estimates described in paragraphs 28.57 and 28.58.
National general government final consumption expenditure and gross fixed capital formation
28.46 The treatment of national general government final consumption expenditure in regional accounting is rather problematic. Alternative treatments are to attribute final expenditures to the region in which the expenditure was incurred, or to the region in which the beneficiaries reside, or even to consider the national general government consumer unit as extraterritorial and therefore to exclude it from all regions. For practical reasons the first approach has been adopted, although it still requires extensive use of indirect indicators. An implication is that a large proportion of the consumption of national general government services is included in State final demand (SFD) for the Australian Capital Territory, inflating the balancing item for that Territory. If data were available to allocate national general government final consumption expenditure to end users, the balancing item for the Australian Capital Territory would be a much smaller negative, or even a positive, because the provision of the services would be regarded as an interstate export instead of consumption expenditure in the Australian Capital Territory. Estimates for national general government expenditures in the States, on both an annual and a quarterly basis, must therefore be treated with considerable caution.
State and local general government final consumption expenditure and gross fixed capital formation
28.49 Data for State and local general government final consumption expenditure and gross fixed capital formation are supplied by the ABS Public Finance Section. State general government data are extracted from administrative by-product sources such as financial statements prepared for State government budget papers and Auditors'-General Reports, and supplementary departmental documents, and by direct collection from general government units. The extracted data are coded using the Government Finance Statistics (GFS) standardised classification framework, which allows data for individual units to be aggregated to the required level. For local government final consumption expenditure, an annual ABS questionnaire is used to collect data from local government authorities in some States, while in others the data are jointly collected through the Commonwealth Grants Commission or the State Department of Local Government. A joint ABS/Commonwealth Grants Commission annual return on capital formation is collected from each local government authority in Australia. Gross fixed capital formation transactions are classified by type of asset and purpose. Data are allocated directly by State on the assumption that each State's activities are confined within its own borders.
Public financial and non-financial corporations' gross fixed capital formation
28.50 For Commonwealth non-financial corporations' gross fixed capital formation on tangible fixed assets, various allocators are applied at the individual corporation level. Direct allocation is possible in a few cases where corporations operate wholly in one State. For some corporations State-level direct indicators are available from either the ABS Engineering Construction Survey or from published accounts. For other corporations, indirect allocations are used - for example, purchases of ships and aircraft are allocated using general freight and passenger activity through ports and airports in each State, consistent with the allocation of gross operating surplus for the Transport industry. Data for Commonwealth financial corporations are allocated by State on the basis of population. Data for State and local non-financial corporations are allocated directly to their State of operation. Gross fixed capital formation for State and local public financial corporations is allocated by State using data from the annual Public Financial Corporations Survey of Capital Expenditure. State dissections for capital expenditure on software are based on data from Information Technology, 1995-96 (Cat. no. 8126.0).