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Key impacts on ABS publications
The reclassification will redistribute financial assets and liabilities between the two subsectors within the Depository Corporations sector. Where the Depository Corporations sector financial assets and liabilities are revised this will be driven by improved measurement from EFS rather than the impact of the reclassification.
For more information, including more detail on what items will change and information on the new table formats and series identifiers, please see Information Paper: Product changes to the Australian National Accounts: Finance and Wealth, 2019 (cat. no. 5232.0.55.005).
Impacts on Lending to households and businesses (cat. no. 5601.0)
The first EFS release of this monthly lending product, using data from Phase 2 of the new collection, will be on 17 December 2019 (for the October 2019 issue). To reflect the new content, the publication will be renamed Lending Indicators, Australia (cat. no. 5601.0).
Overall, there will be more housing data available in the new publication, Lending Indicators, Australia (cat. no. 5601.0), compared with Lending to households and businesses, Australia (cat. no. 5601.0) but fewer data on business loan commitments. Some existing series will no longer be collected and some existing data series will be suspended from publication pending further analysis of the newly collected data. The ABS plans to increase the content of Lending Indicators, Australia (cat. no. 5601.0) over time.
The changes to the concepts and classifications are significant. There is a high likelihood of revisions in future reporting periods as APRA, the ABS and the RBA continue to work with the financial sector to ensure consistent reporting. It is expected data quality will continue to improve over time.
Where new concepts are similar to the current concepts, the ABS will produce an historic series back to July 2002 (i.e. a ‘backcast’ series) to avoid breaks in series.
Household lending indicators
For household lending indicators, the new data items available from the EFS collection will include:
The key changes to existing housing data will include:
Business lending indicators
There will be significant changes to new loan commitments to businesses, including:
The changes listed above mean there will be fewer data items than previously available on business loan commitments. Some series published in Lending to households and businesses, Australia (cat. no. 5601.0) will be suspended pending further assessment of data quality and the effect of EFS changes such as the inclusion of internal refinancing.
In addition, some items such as the total lending to businesses for purchase of property and construction will no longer be available at the state level.
There will be some new items available including fixed term lending to small and medium sized businesses by detailed purpose in original terms.
For more information, including more detail on what items will change and information on the new table formats and series identifiers, please see Information Paper: Upcoming changes to Lending to Households and Businesses, Australia, 2019 (cat. no. 5601.0.55.002).
Impacts on ABS’s international accounts releases
EFS data is not directly used in compiling Balance of Payments and International Investment Position (cat. no. 5302.0) and International Investment Position, Australia: Supplementary Statistics (cat. no. 5352.0). The ABS Survey of International Investment (SII) is used. However, there is a small amount of overlap between data collected from EFS and SII. During a parallel run process in 2019 the ABS reconciled the overlapping data, for authorised deposit-taking institutions and registered financial corporations’ interaction with non-residents, from the two collections. The ABS then worked with data providers to resolve any significant reporting issues and ensure coherence between the two sources (please see the final section of this information paper, ‘Quality assurance of the new EFS data’ for more information).
Longer term impacts on ABS’s national accounts releases
EFS won’t flow through to published estimates of GDP, and therefore Gross State Product (GSP), until late 2021, when the ABS has data from all EFS phases and will do historical revisions in the Australian System of National Accounts (beyond the regular annual revisions which are limited to the previous four years of data).
This timing of the implementation in 2021 gives the ABS time to thoroughly assess the impacts ahead of implementing the EFS data in Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0), Australian System of National Accounts (cat. no. 5204.0) and Australian National Accounts: State Accounts (cat. no. 5220.0). At this stage, the ABS expects impact on total GDP to be minor. We also expect minimal impact to GSP. The national impact will be distributed using employment indicators from the Labour Force Survey. Within the sectoral income accounts, we expect some redistribution between household interest paid on dwellings and consumer debt. The size of this redistribution is not yet known. The lag in implementing EFS data will mean there’s a period of incoherence between estimates published in Australian National Accounts: Finance and Wealth (cat. no. 5232.0) and the other Australian national accounts and international accounts products referenced in this paper, between late 2019 and 2021.
If needed for data quality reasons (e.g. to ensure significant economic events are captured in the estimates), the ABS may make some adjustments to the national accounts products listed above from late 2020 to reflect some of the new data from the first phase of EFS.
The ABS will publish more information on the expected impacts on the ABS’s other national accounts releases closer to the time of release.
Quality assurance of the new EFS data
The ABS will complete, and in some cases has already completed, multiple parallel runs to assess the data for each phase of the new EFS collection before publishing the new data. During parallel runs the financial sector provides data to APRA on both the current basis and the new basis and the ABS analyses the data from the new EFS collection while continuing to collect and publish data on the current basis.
As part of the parallel run process for Australian National Accounts: Finance and Wealth (cat. no. 5232.0), the ABS undertook checks to ensure coherence between the small amount of overlapping data from the new EFS collection and the SII. The result of this quality assurance process has no implications for the SII now or going forward. The SII remains the key statistical input for estimates of Australia’s financial interaction with non-residents in the Australian National Accounts: Finance and Wealth (cat. no. 5232.0) publication.
One of the most important changes in the new EFS collection is the increased detail and precision in definitions of the data to be reported. These definitions are accompanied by comprehensive guidance to assist ADIs and other reporting institutions to provide consistent data. APRA, RBA and the ABS have worked, and continue to work, with the financial sector to resolve queries about what to report through EFS and have produced answers to several frequently asked questions to ensure high quality reporting.
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