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APPENDIX 3 A NEW WEALTH FRAMEWORK


A NEW WEALTH FRAMEWORK

In 2013 the Organisation for Economic Co-operation and Development (OECD) released the first set of internationally agreed guidelines for producing micro statistics on household wealth, Guidelines for Micro Statistics on Household Wealth (OECD, 2013). These guidelines were produced by an ABS led OECD Expert Group on Micro Statistics on Household Income, Consumption and Wealth and fill an important gap in the existing international guidance on measuring the wealth dimension of people’ economic well-being. They address the common conceptual, definitional and practical problems that countries face in producing household wealth statistics, and help improve the comparability of the currently available country data. They are also needed to facilitate the integration of micro statistics on household wealth with those relating to the other dimensions of economic well-being, i.e. income and consumption.

The OECD Expert Group on Micro Statistics on Household Income, Consumption and Wealth undertook two complementary tasks at the same time. The first was the preparation of the wealth guidelines; the second was the preparation of the companion report, Framework for Statistics on the Distribution of Household Income, Consumption and Wealth (OECD, 2013), which presents the first internationally agreed comprehensive and integrated framework for the collection, analysis and dissemination of micro statistics on the different aspects of household economic well-being. The OECD Guidelines for Micro Statistics on Household Wealth are fully consistent with the Framework for Statistics on the Distribution of Household Income, Consumption and Wealth.

The OECD wealth guidelines complement the broad macro economy perspective articulated in the System of National Accounts (SNA). Many of the concepts in the OECD wealth guidelines and the SNA are the same, however some differences exist. The guidelines for micro data support the distributional analysis of economic well-being, and therefore include consumer durables as assets yielding services to their own households. These assets are particularly important in the analysis of the wealth of poorer households and for distributional information. On the other hand, the micro guidelines do not include some of the concepts included in the macro data that are of less relevance from a household perspective. The relationship between the OECD wealth guidelines and the SNA is described in detail in the OECD wealth guidelines, so that data prepared under the two frameworks can be analysed together in a meaningful way.

In this publication a change in the asset classification has been implemented to improve alignment with the new OECD wealth guidelines. The change impacts the presentation of net unincorporated business, this asset category is now classified as a financial asset, where it was previously classified as a non-financial asset. In previous publications the value of silent partnerships was included in net unincorporated businesses. With the adoption of the new standards in this publication, silent partnerships is now classified separately from unincorporated businesses and is included in shares and other equity as a financial asset.

Overall, net worth is not impacted by this classification change. Table A1 presents the mean values of assets and liabilities on the classification used in previous publications. it can be seen from this table that unincorporated businesses including silent partnerships has a mean value of $24,542 in 2011-12. Under the new classification this amount is now included as a financial asset, with $20,463 shown against unincorporated business and $4,079 against silent partnerships included in the value of shares. Table A1 can be used to compare the mean values of assets and liabilities in 2011-12 to their value in previous publications.

Table A2 presents the mean values of assets and liabilities on the new classification basis for 2003-04, 2005-06, 2009-10 and 2011-12. This table can be used to compare assets and liabilities over time under the new classification.

A1. Household assets and liabilities, Former wealth classification
				2011-12
				$
MEAN VALUES
ASSETS
	Financial assets
		Value of accounts held with financial institutions		36 956
		Value of shares (excl. own incorporated business)		18 160
		Trusts
			Value of public unit trusts	3 072
			Value of private trusts	23 851
			Total trusts	26 923
		Value of own incorporated business (net of liabilities)		27 595
		Superannuation
			Balance of accounts with government superannuation funds	34 913
			Balance of accounts with non-government superannuation funds	97 406
			Total superannuation	132 318
		Total financial assets(a)		247 686
	Non-financial assets
		Property assets
			Value of owner occupied dwelling	369 875
			Value of other property	129 123
			Total property assets	498 998
		Value of own unincorporated business (net of liabilities) (incl. silent partnerships)		24 885
		Value of contents of dwelling		62 588
		Value of vehicles		21 192
		Value of assets nec		2 882
		Total non-financial assets		610 545
	Total assets			858 230
LIABILITIES
	Property loans
		Principal outstanding on loans for owner occupied dwelling		74 741
		Principal outstanding on other property loans		42 122
		Total property loans		116 862
	Other liabilities
		Debt outstanding on study loans		2 423
		Amount owing on credit cards		2 726
		Principal outstanding on loans for vehicle purchases (excl. business loans)		2 734
		Principal outstanding on investment loans (excl. business and rental property loans)		4 228
		Principal outstanding on loans for other purposes (excl. business and investment loans)		1 118
	Total liabilities			130 092
NET WORTH OF HOUSEHOLD				728 139
(a) Includes the value of other financial investments, debentures and bonds, children's assets, loans to persons not in the same household, and offset accounts

A2. Household assets and liabilities(a), New wealth classification
				2003-04	2005-06	2009-10	2011-12
				$	$	$	$
MEAN VALUES
ASSETS
	Financial assets
		Value of accounts held with financial institutions(b)		21 115	24 811	32 908	36 956
		Value of shares (excl. own incorporated business)		18 221	22 739	22 314	18 160
		Trusts
			Value of public unit trusts	-	-	3 734	3 072
			Value of private trusts	-	-	17 832	23 851
			Total trusts	9 158	10 032	21 565	26 923
		Value of own incorporated business (net of liabilities)		22 836	45 238	39 499	27 595
		Value of own unincorporated business (net of liabilities)		15 571	14 339	21 547	20 622
		Superannuation
			Balance of accounts with government superannuation funds	16 994	19 490	26 781	34 913
			Balance of accounts with non-government superannuation funds	46 467	65 029	89 101	97 406
			Total superannuation	63 462	84 519	115 882	132 318
		Total financial assets(c)		152 072	207 382	256 260	272 571
	Non-financial assets
		Property assets
			Value of owner occupied dwelling	249 032	286 056	364 895	369 875
			Value of other property	70 799	90 663	136 364	129 123
			Total property assets	319 830	376 719	501 260	498 998
		Value of contents of dwelling		47 353	50 936	60 758	62 588
		Value of vehicles		17 220	19 406	20 454	21 192
		Value of assets nec		586	886	645	2 882
		Total non-financial assets		384 988	447 946	583 116	585 660
	Total assets			537 060	655 328	839 376	858 230
LIABILITIES
	Property loans
		Principal outstanding on loans for owner occupied dwelling		40 013	49 932	68 354	74 741
		Principal outstanding on other property loans		19 862	29 188	36 635	42 122
		Total property loans		59 875	79 120	104 989	116 863
	Other liabilities
		Debt outstanding on study loans		1 205	1 472	2 004	2 423
		Amount owing on credit cards		1 863	2 164	2 640	2 726
		Principal outstanding on loans for vehicle purchases (excl. business loans)		2 679	2 842	2 282	2 734
		Principal outstanding on investment loans (excl. business and rental property loans)		2 363	5 124	6 880	4 228
		Principal outstanding on loans for other purposes (excl. business and investment loans)		1 450	1 747	1 021	1 118
	Total liabilities			69 434	92 470	119 816	130 092
NET WORTH OF HOUSEHOLD				467 626	562 859	719 561	728 139
- nil or rounded to zero (including null cells)
(a) Wealth values are not adjusted for inflation
(b) Prior to 2011-12, this estimate may have included some of the value of offset accounts
(c) Includes the value of other financial investments, debentures and bonds, children's assets, loans to persons not in the same household, offset accounts, and silent partnerships. The value of offset accounts was collected separately from other financial accounts for the first time in 2011-12