5514.0.55.001 - Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 10/10/2003   
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2.17. The term ‘scope’ is used to denote the group of statistical units that defines the intended boundary of a statistical system. The aim of a statistical system is to record a defined set of information relating to all of the statistical units defined as falling within the scope of that system. The term ‘in-scope units’ is often used to describe the group of units falling within the scope of a statistical system. The term ‘coverage’ is used to denote the extent to which the defined scope of a statistical system is actually achieved in practice. Ideally, scope and coverage would be identical but in practice there are many reasons why it may not be feasible to achieve full coverage.


SCOPE OF THE GFS SYSTEM

2.18. The scope of the ABS GFS system is defined as all enterprise units comprising the public sector of Australia. The public sector is defined in the ABS Public/Private classification, which is one of the standard sector classifications defined in Standard Economic Sector Classifications of Australia (SESCA) 2002 available in the Statistical Concepts Library. The SESCA defines the public sector as comprising:

  • all resident units that are classified in the standard institutional sector classification of Australia (SISCA) to the general government sector;
  • all resident corporations and quasi-corporations that are classified in the SISCA to the non-financial corporations sector and are controlled by government units - such corporations and quasi-corporations are described in the system as public non-financial corporations, and
  • all resident corporations and quasi-corporations that are classified in the SISCA to the financial corporations sector and are controlled by government units - such corporations and quasi-corporations are described in the system as public financial corporations.

The SISCA is another of the sector classifications included in the SESCA. The institutional sectors included in the SISCA and the units of which they are comprised are defined in detail in the section below headed ‘Classification of units’.

2.19. It will be noted that the scope is defined in terms of ‘resident’ units. The concept of residence is based on the concept of the economic territory of a country, rather than legal or political concepts. The economic territory of a country is defined in the SNA93 as ‘the geographic territory administered by a government within which persons, goods and capital circulate freely’ (SNA93, paragraph 14.9). The economic territory of Australia includes the Cocos (Keeling) Islands and Christmas Island. It does not include the external territory of Norfolk Island. The economic territory includes ‘territorial enclaves’ in the rest of the world (i.e. clearly demarcated areas of land which are located in other countries and which are used by the government which owns or rents them for diplomatic, military, scientific or other purposes). Thus, the scope of the GFS system includes overseas operations at Australia’s embassies, consulates, trade offices, etc.

2.20. The criterion for recognising government-controlled corporations and quasi-corporations is based on the SNA93 definition of control, which is ‘… the ability to determine general corporate policy by appointing appropriate directors, if necessary. Owning more than half the shares of a corporation is evidently a sufficient, but not a necessary, condition for control …' (SNA93, paragraph 4.30). Thus, a government controls a corporation when a government unit owns more than 50% of the shares in the corporation. However, in some cases, government control can also exist when a government unit owns 50% or less of the shares of a corporation. For example, government control can exist where special legislation or regulations empower a government to determine corporate policy or to appoint the directors of a corporation. Corporations controlled by other government-controlled corporations are considered to be government controlled.

2.21. For the purposes of the Public/Private classification, government control of corporations does not include a government’s ability to exercise general legislative or regulatory powers over corporations as a group. Government authority to determine the general policy of a corporation usually comes from legislation that is specific to the individual corporation over which control is exercised.

2.22. In some cases, the existence of government control may not be clear. In Australia, such is the case with universities (see paragraphs 2.35 - 2.38), and superannuation funds that governments have established for the benefit of their employees. Legislation places responsibility for the day-to-day operation of the superannuation funds with a board of trustees that is created as a separate legal entity. The establishing governments generally receive no monetary benefits from the funds. Although the establishing government has the power, under the legislation, to appoint and dismiss some or all of the trustees, the boards of trustees are typically not under the direction of government and are required to act in the beneficiaries’ interests, and not those of the government. Accordingly, the funds are not considered to be under government control. Although the circumstances of individual funds may vary, in the interest of uniformity, all superannuation funds with arrangements broadly similar to those described are included in the private sector.

2.23. Instances can arise in which the public and private sectors share ownership of a corporation. In such cases, the corporation is allocated to the sector that has effective control over the determination of the activities and policy of the corporation.


COVERAGE

2.24. For practical reasons, the ABS does not attempt to cover all economic activity of the public sector in its GFS system. Undercoverage can arise because units are omitted in their entirety or because some activities of some units are not covered. Units are omitted entirely from coverage only when the economic activity of the units is judged to be relatively insignificant and not worth the cost of collection. Units are omitted partially from coverage only when indirect sources of measuring the major part of the units’ activities are available and it is not worth the cost of collecting the missing information directly.

2.25. Units omitted entirely from coverage are few in number and consist mainly of small commodity marketing boards. Units for which partial coverage is achieved are restricted to units that are entirely or mainly funded from Commonwealth, State or Territory budgets. Budget documents provide information about such units’ budget allocations, which can be used to impute measures of the units’ economic activity. However, this methodology does not cover any revenues that the units may raise in addition to their budget allocations and any activity that the units may fund from such revenues. Units for which this type of methodology is currently used include public hospitals and schools and many small statutory authorities with regulatory or advisory roles that are likely to be funded entirely from government budget allocations.

2.26. The ABS takes steps to ensure that undercoverage is not increased by changing circumstances. In particular, care is taken to ensure that there is not an increase in the level of activity of units that are not covered or an increase in the capacity of indirectly covered units to fund economic activity from their own resources. The non-coverage and indirect coverage of units does not affect the overall accuracy of GFS significantly (see chapter 6).



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