1360.0 - Measuring Australia's Economy, 2003  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 03/02/2003   
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Explanatory Notes

The essential function of the national accounts is to provide a systematic summary of national economic activity. The structure of the accounts provides an economically meaningful aggregation of the wide range of diverse transactions occurring in the economy.

The basic structure of the national accounts is determined by the classification of transactors into institutional sectors and the classification of transactions, firstly by economic type, and secondly, grouped to form accounts. The four domestic institutional sectors are: non-financial corporations; financial corporations; households and general government.

The main accounts in the Australian national accounts are:
      • gross domestic product (GDP) account, which records the value of production (GDP), the income from production and the final expenditures on goods and services produced;
      • income accounts, which show primary and secondary income transactions, final consumption expenditures and consumption of fixed capital. Net saving is the balancing item for these accounts;
      • capital accounts, which record the net accumulation, as the result of transactions, of non-financial assets; and the financing, by way of saving and capital transfers, of the accumulation. Net lending/borrowing is the balancing item for these accounts;
      • financial accounts, which show the net acquisition of financial assets and the net incurrence of liabilities. The balance on these accounts is the net change in financial position, which is conceptually equivalent to the net lending/borrowing balance in the capital accounts; and
      • balance sheets, which record the stock of assets, both financial and non-financial, and liabilities at a particular point in time. Net worth is the balance from the balance sheets.

The figure on the facing page shows how some of the main national accounting aggregates are related to each other. It starts with national turnover, which can be viewed as the total supply of goods and services available in Australia to final buyers in a given period. This is conceptually equivalent to the sum of all final expenditures on goods and services in the same given period. These final expenditures are defined to include changes in inventories and exports, which are considered to be final expenditures from the point of view of the domestic economy. Deduction of imports of goods and services from national turnover leaves GDP.

Australia's national accounts are essentially compiled according to the recommendations of the latest international standard - the System of National Accounts, 1993 (SNA93). SNA93 is a joint publication of the United Nations, IMF, OECD, World Bank and Commission of the European Communities (Eurostat).

Further Reading

Australian National Accounts: Concepts, Sources and Methods (5216.0)
Contains a detailed explanation of the system of Australian national accounts outlining major concepts and definitions.

System of National Accounts, 1993
Contains international standards issued by the United Nations, International Monetary Fund, World Bank, Organisation for Economic Co-operation and Development and the Commission of the European Communities (Eurostat) for the compilation of national accounts statistics. Included on the ABS CD-ROM product Statistical Concepts Library (1361.0.30.001).

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