5331.0 - Balance of Payments and International Investment Position, Australia, Concepts, Sources and Methods, 1998  
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Contents >> Chapter 6. Current account - goods >> Concepts and definitions

6.1. Goods include, with a few exceptions, all movable goods which change ownership between Australian residents and non-residents, whether or not they actually cross the customs frontier. A change of ownership is imputed for movable goods subject to a finance lease, goods shipped between a branch and its foreign head office, and certain goods for processing. The exceptions to the above definition of goods relate to a small number of movable goods which for convenience are treated as services in the international statistical standards; these exceptions are described in box 7.2.

6.2. The standard components of goods are general merchandise, goods for processing, repairs on goods, goods procured in ports and non-monetary gold. Table 6.1 illustrates the relative importance of the various standard components for 1996-97. As is evident from the table, goods credits and debits are largely in balance. By far the major component within goods is general merchandise, which accounts for 91 per cent of goods credits and 97 per cent of goods debits.

6.1 GOODS CREDITS AND DEBITS, 1996-97
Credits ($m)
Debits ($m)
GOODS
80,934
-79,438
General merchandise
73,379
-77,205
Goods for processing
77
-656
Repairs on goods
27
-63
Goods procured in ports by carriers
573
-625
Non-monetary gold
6,878
-889

Source: Balance of Payments and International Investment Position, Australia, March quarter 1998 (Cat. no. 5302.0).

6.3. General merchandise includes the majority of goods and, in the detailed balance of payments tables, is split into a range of export and import commodities. Merchandise includes (at their commodity transactions value rather than at face value) such items as newly-minted and unissued bank notes and coins, share scrip, debenture certificates, etc. which are produced in one country and exported to non-residents.

6.4. Goods for processing cover the value of goods entering and leaving Australia for processing and returning to the country from which they were consigned for processing. The gross value of the exports and imports is to be recorded even though there may be no change of ownership. (Goods exported for processing or re-exported after processing are separately identified in Australia’s international trade statistics. However, the recorded values of these items may be either overstated, because the goods do not return to the country from which they were consigned to Australia, or understated because the goods are wrongly included in general merchandise. In the case of goods imported for processing or re-imported after processing no items exist to identify these goods separately. The former is approximated in two ways.
      • First, the value of non-merchandise re-exports after repair in Australia (valued before the repairs are undertaken) is deducted from non-merchandise data on imports for repair and processing.
      • Second, where international trade statistics include merchandise entries flagged as being for processing and re-export, these amounts are reclassified for balance of payments purposes to goods for processing.

In neither case can the goods be separately identified from goods being re-exported to destinations other than the country from which they were consigned to Australia. Goods re-imported after processing are not separately identifiable and are included in general merchandise.)

6.5. The fee earned for processing is to be included in the gross value of the goods. Examples of such processing include oil refining, vehicle assembly and clothing manufacturing. This treatment recognises that the original good essentially loses its identity during processing, and is classified to a different commodity after processing. Goods imported to an economy for processing and not returned to the country from which they originated are to be shown, in theory, as an export from the originating country (including the value of processing), and the country undertaking the processing records a service earning fee.

6.6. Repairs on goods include repairs performed by residents on movable goods owned by non-residents, or vice versa. The value of the repair, not the gross value of the goods, is included in this component. Exceptions are:
      • repairs on computer goods, which are included under computer and information services; and
      • maintenance performed on transportation equipment in ports and airports, which is included under other transportation services.

6.7. Goods procured in ports cover items such as fuels, provisions, stores and supplies procured by resident transport operators in foreign ports or by non-resident transport operators in Australian ports.

6.8. Non-monetary gold covers exports and imports of gold. It includes gold bullion, unrefined gold, and gold coins which principally derive their worth from either the value of their gold content or, alternatively, from their value as collectors’ pieces. Gold held by monetary authorities, such as the Reserve Bank and other central banks, as part of an economy’s official reserves, is referred to as monetary gold. Transactions in monetary gold between monetary authorities (such as central banks) are treated as financial transactions. However, when the Reserve Bank sells or lends gold, which may then be exported, it is said to demonetise the gold, turning it into non-monetary gold; the export of the gold is recorded in this standard component. Likewise, when the Reserve Bank receives gold from abroad (e.g. the repayment of a gold loan), which may then be imported, it is said to monetise the gold, turning it into monetary gold; the import of the gold prior to monetisation is captured in the international trade statistics and is recorded in this standard component.






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