Australian System of National Accounts historical revisions

Enhancing trade and balance of payments statistics

Released
5/10/2021

Introduction and background

Statistical revisions are carried out regularly in the Australian System of National Accounts to reflect the most current information and estimation methods. Periodically the Australian Bureau of Statistics (ABS) will revise a longer annual time series, which is often referred to as “historical revisions". These longer time series revisions focus on improving data quality (e.g. incorporating cyclical data collections such as the Census); adopting new classifications; and improving international comparability.

Through the balance of payments there are two main improvements to international trade in services:  
•    Travel services imports; and
•    Visa application charges source improvements and reclassifications

Travel Service imports

Travel debits (imports) captures the amount of money spent by Australian’s on goods and services while travelling overseas. Travel is split based on three main reasons for travel: business, education, and other personal travel. Currently there are two main data sources used in the compilation of travel debits; the National Visitor Survey (NVS, from Tourism Research Australia) and Overseas Arrivals and Departures (OAD, from ABS ). The NVS provides quarterly information on the average amount Australian’s spend while travelling overseas, while OAD data provides monthly information on the number of Australian’s travelling overseas. 

The availability of new data has allowed the ABS to adopt a new method for assessing international travel and spending patterns habits. The new methods makes use of more contemporary data sources and methods, in particular, data based on bank transactions, as published by the Reserve Bank of Australia since 2002 (Payments Statistics | RBA). This new data and method will enhance the quality of the international travel debits (imports).
 

RBA data

The RBA collects a range of transaction data from Australian financial institutions and publishes this data in aggregated form. In 2019, the RBA expanded their publication, with the number of series published expanding from 61 to 300. Data collected by the RBA covers credit and debit card systems, the direct entry system, the ATM system, and cheque payments. The 2019 update to the RBA publication ensured there was comprehensive coverage of industry activity. 

The ABS make use of six key variables regarding transactions made overseas on a card issued by an Australian financial institution. 

1.    Overseas credit and charge card cash advance transactions
2.    Overseas commercial credit and charge card purchase transactions
3.    Overseas personal credit and charge card purchase transactions
4.    Overseas debit card transactions
5.    Overseas prepaid card transactions
6.    Overseas ATM cash withdrawals by debit cards

These variables provide valuable and timely insight into the changes in both traveller behaviour and spending patterns of Australians travelling overseas. The data does not cover all travel activities, however, they cover a large portion of overseas transactions by Australian residents and are fit for purpose.

Combined, these variables provide high quality estimates for the changes in both spending patterns (i.e., Australian’s spending different amounts of money overseas in different periods) and travel patterns (i.e., Australian’s spending more time overseas in different periods). Being able to account for these changes is becoming increasingly relevant as Australia moves out of COVID-19 restrictions, with the RBA data source being a more timely data source available that captures both changes in spending patterns and travel patterns.
 

New approach to calculating travel debits

From the August 2021 reference month, travel debits will be calculated by combining the RBA, NVS, and OAD data, using the benchmarking method commonly employed across National Accounts (1504.0 - Methodological News, Sep 2012 (abs.gov.au)). The method produces high quality estimates by combining an annual benchmark – the best estimate of the annual level – and a more frequent indicator – a more timely indicator of movements. The resulting series will have an annual level equal to the benchmark and movements closer to the indicator.

This benchmarking method will be used to derive travel debits. The annual benchmark will be a combination of NVS and OAD data, like the existing travel debits formulation. The indicator will use the RBA payments data. 
 

Impacts

This new method has distinct advantages over the previous method, including:

1.    Accuracy: the new method will produce enhanced accuracy of movements that more closely reflect changes in spending and travel patterns;
2.    Accuracy: using the NVS data on an annual basis will provide a more robust level of spending and reduce large quarter on quarter fluctuations; and 
3.    Revisions: the number and size of revisions will be reduced, as the RBA data is timelier than the OAD or NVS data

While the new methodology has immediate benefits, the current reference month will continue to be projected due to the lag in data availability. RBA data is available one month after the reference month, which is timelier. From the January 2022 reference month, The ABS, will suspend the production and release of monthly international trade in services statistics, in order to focus on enhancing the quality and range of quarterly international trade in services data (see Enhancing Quality: Australia's International Trade Statistics for more details). This change will alleviate the need to project travel debits in the current reference month and will enhance the accuracy of quarterly travel statistics. 

Adoption of the new method will result in revisions in travel debits data, back to July 2005. The main impact of these revisions will be for monthly movements. The annual level of travel debits data will be consistent with previously published values. 

Reclassification of Visa Application Charges

From 2015-16 onwards, revenue obtained from visa application charges (VAC) has been reclassified to tax revenue, rather than the sale of a service.  Both Balance of Payments and National Accounts statistics will reclassify VAC to Secondary income payable - Current taxes on income, wealth, etc in the upcoming 2020-21 annual and September quarter 2021 outputs.

Additionally, investigations into new Department of Home Affairs source data showed VAC credit levels were understated and were revised to align with tax revenue. This will result in upward revisions to the current account.