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This document was added or updated on 28/08/2020.
Classifying COVID-19 electricity bills support to households
The payments are made by the general government sector directly to electricity providers for each eligible household, with the discounts then credited to household bills.
Social transfers in kind, other current transfers, or subsidies
This section outlines why these payments have been classified as social transfers in kind.
Social benefits are defined as “intended to provide for the needs that arise from certain events or circumstances, for example, sickness, unemployment, retirement, housing, education or family circumstances” (2008 SNA, para 8.17). Under this broad category, social transfers in kind are more specifically defined as “expenditures by government (or non-profit institutions serving households [NPISH]) on goods or services produced by market producers that are provided directly to households, individually or collectively, without any further processing” (2008 SNA, para 6.234). The international Government Finance Statistics (GFS) manual clarifies this further with social benefits associated with goods and services provided to households (i.e. social transfers in kind) clarified as “payments made by general government to market producers to pay entirely, or in part, for goods and services that those market producers provide directly and individually to households in the context of social risks or needs and to which the households have a right” (IMF GFSM 2014, para. 6.91).
Under this guidance, electricity is not specifically mentioned as being linked to a social need, but the ABS has determined that electricity is considered within the broader category of “housing” in the social risks or needs context. This is because utilities like electricity and gas are grouped together with housing in the Classification of Individual Consumption by Purpose (COICOP) used in the System of National Accounts 2008. Category 4 of COICOP covers ‘Housing, water, electricity, gas and other fuels'.
The state and territory governments’ electricity support to households – both support to those in hardship and general bills support to all households - meet the appropriate criteria to be classified as social transfers in kind. This is because these payments are being made to market producers to pay in part for electricity that is provided directly and individually to households, with electricity included within “housing” as a social need as per COICOP.
In the absence of social risks or needs, other current transfers (or current transfer expenses n.e.c. in GFS) may be considered which are defined as “purchases of goods and services from market producers that are distributed directly to households for final consumption other than social benefits” (IMF GFSM 2014, para. 6.91). This treatment was not appropriate for how these transfers are used as a counterparty in compiling Australia’s National Accounts, particularly as the general government sector is not directly distributing electricity to households.
1. https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/03/$1-billion-COVID-19-economic-and-health-relief-package-unveiled-.aspx <back
2. https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/03/COVID-19-economic-response-Relief-for-businesses-and-households.aspx <back
3. https://www.actewagl.com.au/en/support-and-advice/concessions-and-rebates/act-rebates/act-utilities-stimulus-payment-covid-19-support <back
4. https://www.service.nsw.gov.au/transaction/energy-accounts-payment-assistance-eapa-scheme <back
5. https://www.qld.gov.au/community/cost-of-living-support/concessions/energy-concessions/covid-19-household-utility-relief <back
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5261.0 - Economic measurement during COVID-19: Selected issues in the Economic Accounts, May 2020
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 18/05/2020 First Issue