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LABOUR PAYMENTS QUADRANT
Measures of labour costs should be net of any subsidies, rebates or allowances from governments for wage and salary payments to employees, or for other labour costs borne by employers.
The definition of labour costs from the 1966 International Conference of Labour Statisticians, paragraph 39 is ‘...remuneration for work performed, payments in respect of time paid for but not worked, bonuses and gratuities, the cost of food, drink and other payments in kind, cost of workers' housing borne by employers, employers' social security expenditures, cost to the employer for vocational training, welfare services and miscellaneous items, such as transport of workers, work clothes and recruitment together with taxes...’.
LABOUR PAYMENTS SOURCES
Source data for quarterly estimates of Labour Payments
Labour Payments data are primarily sourced from underlying data from two ABS National Accounts publications: Australian System of National Accounts (ABS cat. no. 5204.0) and the Australian National Accounts: National Income, Expenditure and Product (ABS cat. no. 5206.0). Please refer to Chapter 11 of the Australian System of National Accounts: Concepts, Sources and Methods (ABS cat. no. 5216.0) for details on how data are compiled for National Accounts.
Data components of other labour related costs to employers are sourced from the Australian National Accounts: Input-Output Tables, Product Details (ABS cat. no. 5215.0.55.001) and underlying information from ABS Supply-Use tables.
Table 10.3 below summarises data sources used in compiling quarterly estimates in the Labour Payments quadrant.
Table 10.3: Description of quarterly data sources and uses for the Labour Payments Quadrant
Source data for annual estimates of Labour Payments
Source data for the annual estimates of Labour Payments are the same as those described above for quarterly estimates.
LABOUR PAYMENTS METHODS
METHODS FOR THE COMPILATION OF QUARTERLY AND INDUSTRY ESTIMATES OF LABOUR PAYMENTS
Total Labour Income
Total Labour Income is the sum of:
Total Labour Income is the sum of:
Estimates of Compensation of Employees at a total economy and industry division level are derived from underlying Australian National Accounts data. Division level data from the Australian National Accounts is further disaggregated to industry subdivision, using Compensation of Employees information from the ABS Supply-Use tables for most industries. For some industries, the Supply-Use industries are more aggregated than industry subdivision. For these industries, information from the annual Economic Activity Survey or the proportion of filled jobs from business sources is used to disaggregate data to industry subdivision. One exception is Division S (Other Services), which uses information relating to earnings in all jobs from the household Characteristics of Employment Survey to disaggregate data to industry subdivision, as subdivision 96 (Private Households Employing Staff) is out of scope of all business collections.
Labour Income from self-employment is an estimate of the share of Gross Mixed Income (GMI) attributable to the provision of labour. GMI is the surplus or deficit accruing from production by unincorporated enterprises that includes both the return on labour and return on capital.
The calculation of the labour share of GMI on an annual basis for each industry follows the method described in compiling Productivity Statistics outlined in Chapter 19 (Productivity Measures) of the Australian System of National Accounts: Concepts, Sources and Methods (ABS cat. no. 5216.0). This method assumes that self-employed proprietors receive the same average compensation per hour as wage and salary earners, and can be summarised as comprising the following steps:
As productivity statistics are not compiled for Division P (Education and Training) and Division Q (Health Care and Social Assistance), the scaled labour share of GMI for Division M (Professional, Scientific and Technical Services) is applied to total quarterly GMI for these industries. In addition, the scaled labour share of GMI for Division I (Transport, Postal and Warehousing) is used to represent Division A (Agriculture, Forestry and Fishing) while the scaled labour share of GMI for Division A is further investigated.
As industry productivity statistics are only compiled annually, the same annual scaled labour share of GMI is applied to each quarterly GMI measure for the financial year.
To disaggregate estimates of labour income from self-employment for each industry division to subdivision level, Gross Operating Surplus information from the ABS Supply-Use tables is used for most industries. For some industries, the Supply-Use industries are more aggregated than industry subdivision. For these industries, information from the annual Economic Activity Survey is used.
Other Employment Costs
Other Employment Costs are the sum of
Employers Payroll Taxes
Estimates for employers’ payroll taxes at industry division level are taken from underlying Australian National Accounts estimates. Division level data from the Australian National Accounts is further disaggregated to industry subdivision, using Compensation of Employees information from the ABS Supply-Use tables for most industries. For some industries, the Supply-Use industries are more aggregated than industry subdivision. For these industries, information from the annual Economic Activity Survey is used.
Payment for Recruitment Services and Training Costs
Estimates of annual total expenditure on recruitment services are calculated as the sum of Intermediate Use (purchase price) and Government Final Consumption Expenditure sourced from the Australian National Accounts: Input-Output Tables, Product Details (ABS cat. no. 5215.0.55.001) for Input-Output Product Classification (IOPC) 72110010 (Employment placement and recruitment services). Total quarterly job vacancies from Job Vacancies, Australia (ABS cat. no. 6354.0) are used as a quarterly indicator series to distribute this annual total across the four financial year quarters.
Training Costs are similarly derived and sourced from the Input-Output tables, using the following IOPC codes:
Total wages and salaries for Division P (Education and Training) from Business Indicators, Australia (ABS cat. no. 5676.0) are used as a quarterly indicator series to distribute this annual total across the four financial year quarters.
As Input-Output tables are only available infrequently for earlier periods and with a significant time lag for more recent periods, estimates of total annual expenditure on recruitment services and training costs for the intervening and out years are compiled using underlying data from the Supply-Use tables, based on applying movements in the following Supply Use Product Classification (SUPC) codes:
Supply-Use tables also provide proportions used to allocate total quarterly expenditure on recruitment services and training costs to industry subdivision. These proportions are based on total intermediate use of these products for each Supply-Use industry, with information from the Economic Activity Survey used for those industries where Supply-Use industries are more aggregated than industry subdivision.
Employment subsidies represent payments made by the government to employers who hire eligible job seekers including mature age, disabled, indigenous, youth, parents, long-term unemployed job seekers, etc. This information is sourced from data provided to the ABS by the Department of Finance to compile estimates for the publication Government Finance Statistics, Australia (ABS cat. no. 5512.0). If data for the current year employment subsidies estimate is not available at the time of publication of the Australian Labour Account, annual data for the current year are modelled based on previous years movements.
As data from Government Finance Statistics, Australia (ABS cat. no. 5512.0) are annual data, quarterly estimates of employment subsidies are derived by evenly distributing the annual estimate across the four quarters.
To allocate total quarterly employment subsidies to industry subdivision, underlying data from the Supply-Use tables for subsidies on production by Supply-Use industry are used to derive industry proportions, with information from the Economic Activity Survey used for those industries where Supply-Use industries are more aggregated than industry subdivision.
METHOD FOR THE COMPILATION OF ANNUAL ESTIMATES OF LABOUR PAYMENTS
As all data contained in the Labour Payments quadrant are flow data, which represent a measure of activity over a given period, data across time periods are additive. Therefore, annual data in the Labour Payments quadrant are derived as the sum of the four quarterly estimates.
It should be noted that the Labour Payments quadrant includes derived measures such as Average Labour Income per Employed Person. These are calculated using a flow as the numerator (e.g. Labour Income), divided by a stock for the denominator (e.g. Labour Account Employed Persons). Where these data are presented in annual terms, caution must be exercised when comparing this result with other estimates measured at the same point in time, such as estimates of Average Weekly Earnings. This data is intended for comparison across time and industries within the Australian Labour Account, and to provide a link between the Persons and Labour Payments quadrants.
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