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7.1. The services component covers services rendered by Australian residents to non-residents (credits) and by non-residents to residents (debits). Table 7.1 shows the main services components and their contribution to the balance of payments in 1996-97. Services in total are virtually in balance. However, Australia has a large travel surplus which tends to balance the large deficits on some other components, mainly transportation, royalties and licence fees, and other business services. Travel credits account for almost 50 per cent of services credits, and travel debits 32 per cent of services debits. Transportation debits account for just over 35 per cent of services debits and almost 28 per cent of services credits. Other important components are communications and insurance services.

	7.1 SERVICES CREDITS AND DEBITS, 1996-97
			Credits ($m)	Debits ($m)
	SERVICES		24,384	- 24,103
	Transportation		6,648	- 8,439
	Travel		11,926	- 7,769
		Business	665	- 2,286
		Education	2,962	- 492
		Other personal	8,299	- 4,991
	Communications		910	- 1,049
	Construction		70	0
	Insurance		820	- 1,148
	Financial		508	- 325
	Computer and information		278	- 253
	Royalties and licence fees		346	- 1,369
	Other business		1,870	- 2,673
	Personal, cultural, and recreational		448	- 559
	Government services n.i.e.		560	- 519
	Source: Balance of Payments and International Investment Position, Australia, March quarter 1998 (Cat. no. 5302.0).

	7.2 MOVABLE GOODS INCLUDED IN SERVICES
	Movable goods which, for convenience in compilation, are included in services are:
	goods acquired for their own use by non- residents while travelling, working or studying in Australia and by residents while travelling, working or studying abroad - these goods are included in travel services; goods purchased in Australia by foreign governments for their use in Australia and equivalent expenditure abroad by Australian governments - these goods are included in government services n.i.e.; goods purchased in Australia by foreign government employees and their dependants while stationed in Australia and similarly goods purchased abroad by Australian government employees and their dependants while stationed abroad - these goods are included in government services n.i.e.; goods acquired abroad by an Australian construction enterprise for the purpose of providing on site construction services, or acquired from abroad or in Australia by a foreign construction enterprise for the purpose of providing on site construction services in Australia (provided that the construction site office is not treated as a branch in the country of construction) - these goods are included in other business services.(For more detail see paragraphs 7.17 - 7.19.); and goods which are included incidentally to the main transaction, which is the provision of a service.