21.5    Gross state product (or regional product) is the equivalent of gross domestic product for a region of a national economy. This measure can be produced for a region of any size whether a state, territory, or district. In the Australian context, it is compiled for the six states and two territories and is termed Gross State Product.

21.6    The history of state or regional product is much shorter than that for the national accounts: official sub-national estimates have been produced for the last thirty years.

21.7    No country currently compiles a complete set of SNA accounts for regions of a national economy, with most countries focussing on allocating productive activities to regions. This is largely due to conceptual difficulties with the allocation of economic activity of multi-region institutional units.  

21.8    Some productive activities which operate across regions, such as finance, transport and communications, can be problematic to allocate to states and territories. Work is continuing internationally on improving the scope, quality and relevance of the state/regional accounts; Australian efforts are described throughout this chapter.

21.9    State accounts are used for the twin purposes of policy formulation and government planning. The main use is to assist in the formation of policies for industrial development and infrastructure provision, and to plan public finances. GSP is also used to explain GDP results in a regional context, as well as comparing growth across regions.

21.10    In 1987, the ABS released experimental state estimates in the publication, Australian National Accounts: State Accounts. Since that time, there has been ongoing work to improve estimates of Gross State Product, and to expand the amount of information contained within the state accounts. Key milestones include:

21.11    The state accounts are a geographic disaggregation into states and territories of national accounts data. State estimates are compiled by allocating the national economic flows and other transactions to the state in which they occur. These estimates are then aggregated to produce the state accounts. The state accounts are consistent with the 2008 SNA, given the relationship to national accounts. It is worth noting that there are currently no international standards regarding the compilation of regional accounts.

21.12    The state accounts are compiled for the production accounts, as well as the household income account.

21.18    Gross State Product is the aggregate which details the total economic production of a state economy and is the state equivalent to GDP. In the ASNA, GSP for the eight state and territories add to GDP in current prices, in line with the top-down approach.

21.19     As with GDP, there are three approaches to measuring GSP.  The major difference between compilation of GDP and GSP is that the income and expenditure approaches are combined to overcome measurement issues for Gross State Product:

• Income approach (GSP(I));
• expenditure approach (GSP(E));
• combined income/expenditure measure (GSP(I/E)); and
• production approach (GSP(P)).

21.20    GSP(I) is derived by summing the income flows accruing to the factors of production (labour and capital) plus taxes less subsidies on production and imports:

21.21    In the state accounts, GSP(I) is published in current price terms only because its components cannot be divided into price and quantity elements. It is the basis for measurement of gross state product as the only complete measure of current price GSP in the state accounts. As such, it is a starting point for producing volume estimates of GSP(I/E) and GSP(P).

21.22    GSP(E) is derived as the sum of all final expenditures on goods and services:

21.23    At the state level, the expenditure measure must include both international trade and trade between states, as well as changes in inventories. There is currently no data source available to produce interstate trade or change in inventories on a state basis.

21.24    The inability to measure interstate trade and state level changes in inventories is overcome by assuming that GSP(E) is equal to GSP(I), forming what is known as the GSP(I/E) measure. This is discussed in more detail below. Items of GSP(E) which can be measured are defined as the known components of GSP(E).

21.25    GSP(I/E) is a single measure of GSP produced by assuming GSP(E) is equal to the GSP(I) measure. It is used to overcome the inability to derive all components of the GSP(E) measure. The process is to first produce a current price GSP(I/E) using the GSP(I) measure to allocate to states the average of the GSP(I) and GSP(E) measures.

21.26    A chain volume GSP(I/E) is then produced by deflating current price GSP(I/E) with a deflator produced with known components of GSP(E), which are state final demand and international trade.

21.27    Known components of GSP(I/E) are published. The difference between the known components of expenditure and the total GSP(I/E) is published as the balancing item. The balancing item, in theory, consists of interstate trade and changes in inventories.

21.28    GSP(P) is the sum of value added for all industries:

21.29    Gross value added (GVA) is the difference between output and intermediate consumption at basic prices for each institutional unit and thereby measures the value created by production. Value added represents the contribution of labour and capital to the production process. In the state accounts, estimates for intermediate consumption are not available, meaning calculation of current price and volume GVA requires alternative estimation methods.

21.30    Current price GVA is calculated using income components based on the assumption that GSP(I) = GSP(P).

21.31    The output indicator method is used to produce chain volume (CVM) estimates of GVA. This involves extrapolating reference year estimates of current price GVA using movements of indicators of output volumes.

21.38    The process of compiling GSP in the state accounts is sequential with GSP measures for current prices and volumes interrelated. The process for compiling GSP includes the following steps:

1. Create current price GSP(I)
2. Create known components of GSP(E)
3. Combine GSP(I) and known components of GSP(E) to produce current price and volume measures of GSP(I/E)
4. Create current price GSP(P) using components of GSP(I)
5. Create volume GSP(P) using the output indicator approach
6. Create volume GSP as an average of GSP(P) and GSP(I/E).

21.39    Current price income GSP(I) is the starting point for volume GSP(P) and GSP(I/E) measures as it is the only measure which is independently produced for current price estimates. Compilation of GSP(P) and GSP(I/E) therefore use the assumption that:

•  GSP(I) = GSP(E) for current price GSP(I/E)
• GSP(I) = GSP(P) for current price GSP(P).

21.40    Volume estimates of GSP(I/E) and GSP(P) can then be calculated because it is not possible to produce volume estimates without a current price base.  More detail on the individual steps of GSP compilation are included in following sections.

21.41    GSP(I) is derived by summing the income flows from the factors of production (labour and capital); that is the sum of the factor incomes and taxes less subsidies on production and imports.

21.42    Compensation of employees (COE) is allocated to the location where employment occurs. COE is estimated at an industry division and sector level. State estimates of COE are compiled from a range of ABS survey data.

21.42    Gross operating surplus and gross mixed income (GOS/GMI) are allocated to the location where production activity occurs (rather than based upon any ownership or head office structure).

21.44    National estimates of GOS by sector are apportioned across states and territories by industry, predominantly using ABS survey data.

21.45    Estimates of GMI are apportioned across states and territories by industry using ABS survey data.

21.46    Taxes less subsidies on production and imports relating to the state and local government sector are allocated directly to the state in which they are collected or paid. It is assumed that all production taxes collected by a particular state government are paid by entities resident in that state. Similarly, it is assumed that any subsidies paid by a state government are paid to resident entities of that state.

21.47    Commonwealth taxes and subsidies are allocated to state using a range of activity indicators such as household final consumption expenditure.

21.48    Annual state estimates of COE by industry are compiled from a range of ABS survey data for the state accounts, Quarterly state estimates of COE are produced quarterly for Australian National Accounts: National Income, Expenditure and Product.

21.49    Annual state totals for COE are compiled by aggregating sector-based subcomponents which include private and public sector estimates of cash wages and salaries, payments in kind, and employer social contributions (ESC). All components are estimated using a top-down approach; that is, national benchmarks are apportioned across states and territories using source data indicators based on the location of the employer.

21.50    The following table outlines the data sources used to estimate annual compensation of employees.

21.51    Annual state by industry splits of COE are produced using a top-down approach. National industry estimates of COE are apportioned across states and territories using state by industry indicators of wages and salaries.

21.52    The state by industry division indicators of wages and salaries are created by summing data from the Economic Activity Survey for corporations. For the general government sector data from Public Sector Employment and Earnings is used since 2022-23, with the prior period using the Survey of Employment and Earnings.

21.53    In the current year, where EAS data is not available, wages and salaries data from the Quarterly Business Indicators Survey and estimates of hours worked from the Labour Force Survey are used as indicators

21.54    The state by industry COE estimates are constrained to two sets of benchmarks:

1. state by sector estimates of COE
2. national industry division estimates of COE.

21.55    Any residual imbalance is allocated across the state by industry estimates to ensure additivity to both benchmarks.

21.56    The following tables provide additional detail on the method and data sources used to estimate state COE by industry:

21.57    Quarterly state totals for COE are compiled in a manner similar to the annual state by sector COE estimates. Quarterly state COE estimates are aggregated from values of sector-based subcomponents that are calculated by apportioning national estimates across states and territories. Quarterly estimates are benchmarked to annual state totals to ensure consistency between quarterly and annual estimates.

21.58    The following table outlines the method and data sources used to estimate quarterly state compensation of employees.

21.59    Gross operating surplus (GOS) is the surplus accruing from the production of enterprises, and from the ownership of dwellings. For the general government sector, GOS is equal to the consumption of fixed capital.

21.60    Gross mixed income (GMI) is the surplus accruing from the production of unincorporated enterprises. State level GOS and GMI estimates are then published by industry in an aggregated form as gross operating surplus and mixed income (GOSMI).

21.61    State by industry estimates of GOS and GMI are only calculated annually. There are no quarterly estimates for GOS or GMI by state

21.62    Annual state by industry splits of GOS are produced using a top-down approach. National industry estimates of GOS by sector are apportioned across states and territories using relevant indicators. The state by industry indicators used to split the national benchmarks differ by industry and are determined by sector.

21.63    State by sector splits of GOS are calculated for each industry division and then aggregated to produce total state GOS by industry.

21.64    Indicators of private sector GOS are predominantly based on state by industry division sales data from the Economic Activity Survey. Other data are used as indicators where they are more relevant or where EAS is not available.

21.65    The following tables provide additional detail on the method and data sources used to estimate private sector state GOS by industry:

21.66    Public non-financial corporations (PNFC) GOS is estimated based on GOS data collected in Government Finance Statistics.

21.67    The following table provides additional detail on the method and data sources used to estimate public non-financial corporations GOS by state:

21.68    General government GOS is equal to consumption of fixed capital (COFC) of general government assets. General government GOS is estimated by industry division and is apportioned across states and territories using COFC estimates derived from the state capital stock model. For the current year, population estimates are used to extrapolate forward estimates of COFC

21.69    The following table provides additional detail on the method and data sources used to estimate general government GOS by state:

21.70    Financial and insurance services GOS is estimated using a top-down approach. National GOS for each subdivision is apportioned across states and territories using estimates of hours worked from the Labour force Survey. GOS by subdivision estimates are then aggregated to produce Financial and Insurance Services GOS by state.

21.71    The following table provides additional detail on the method and data sources used to estimate subdivision GOS by state:

21.72    Ownership of dwellings GOS for the household sector is estimated using a bottom-up approach but is derived residually from ownership of dwellings output.    

21.73    For the other sectors, ownership of dwellings GOS is estimated using a top-down approach. National estimates of GOS are apportioned across states and territories using estimates of consumption of fixed capital derived from the state capital stock model. For the current year, population estimates are used to extrapolate forward estimates of COFC.

21.74    The following tables provide additional detail on the method and data sources used to estimate ownership of dwellings GOS by state and territory:

21.75    Annual state by industry splits of GMI are produced using a top-down approach. National industry estimates of GMI are apportioned across states and territories using relevant indicators. 

21.76    The following tables detail the method and data sources used to estimate state by industry division GMI.

21.77    Taxes (and subsidies) on production and imports are disaggregated into two components:

1. Taxes (and subsidies) on products, which include:

• taxes that are payable on goods and services when they are produced, delivered, sold, transferred or otherwise disposed of by their producers;
• taxes and duties on imports payable when goods enter the economic territory or when services are delivered to residents by non-residents; and
• subsidies are usually payable when the goods or services are produced, sold or imported, transferred, leased, delivered or used for own consumption or own capital formation.

2. Other taxes (and subsidies) on production, which include:

• taxes related to the payroll or workforce numbers excluding compulsory social security contributions paid by employers and any taxes paid by the employees themselves out of their wages or salaries; recurrent taxes on land, buildings or other structures; some business and professional licences where no service is provided by the Government in return; taxes on the use of fixed assets or other activities; stamp duties; taxes on pollution; and taxes on international financial transactions; and
• subsidies other than those on products, including subsidies on the payroll or workforce, and may relate to the total salary bill or the employment of particular types of persons, such as handicapped persons and the long-term unemployed.

21.78    Taxes and subsidies on production and imports are classified as follows:

• Commonwealth taxes and subsidies
• State and local taxes and subsidies.

21.79    Location details for individual Commonwealth taxes and subsidies on production and imports are not recorded; they are therefore allocated to states using available state indicators.

21.80    Individual Commonwealth taxes on products are allocated to state using indicator data. Commonwealth other taxes on production other than renewable energy certificates (RECs) are allocated to the states based on the allocation of total Commonwealth taxes on products.

21.81    Commonwealth subsidies are produced as total subsidies on production and imports. A global split of subsidies on products and other subsidies on production is derived by assuming the ratio of Commonwealth subsidies on products to subsidies on production and imports is the same across states.

21.82    The following tables outline how the Commonwealth taxes and subsidies on production and imports are classified on an annual basis and the indicator that is used to allocate them to the states. This allocation is not performed on quarterly data. While taxes on production and imports are disaggregated into taxes on products and other taxes on production, no attempt is made to derive a similar split for subsidies.

21.83    State and local taxes and subsidies are assumed to be levied or paid within state of jurisdiction and as such are directly allocated to that state. These are available on a quarterly basis from GFS data, but compilation for the state accounts only occurs annually.

21.84    The following table outlines how the State and local taxes are classified (i.e. a tax on products or other tax on production). No attempt is made to split subsidies into subsidies on products and other subsidies on production.

21.85    Known components of GSP(E) are derived as the sum of final consumption expenditure, gross fixed capital formation and international exports of goods and services less international imports of goods and services (net international trade).

21.86    Known components of GSP(E) do not provide a complete measure of GSP because components such as interstate trade and change in inventories are missing.  Despite this, they are used extensively to produce and analyse GSP. The process can be summarised as:

• produce the GSP(I/E) deflator
• decompose and analyse the GSP(I/E) measure
• calculate the balancing item. 

21.87    Calculation of GSP(I/E) and the balancing item are described in more detail in following sections.

21.88    Known components of GSP(E) are defined as:  

21.89    The known components of GSP(E) can be summarised as state final demand and net international trade.

21.90    State final demand is the aggregate level of final consumption expenditure and gross fixed capital formation within a state over a specified period of time. SFD is defined as the final use of goods and services within a given period by households, government and businesses; that is:

21.91    In simple terms, SFD is the sum of private and public consumption and investment within a state.

21.92    SFD is a measure of demand in a state economy. Measures of state final demand make no distinction between demand that is met by goods and services produced within the state in question, or by supplies sourced from another state, or from overseas. State final demand is therefore not a measure of the value of production activity occurring within a state, and, as such, should not be used as proxy for gross state product.

21.93    Components of state final demand are compiled quarterly, and published in Australian National Accounts: National Income, Expenditure and Product.

21.94    Annual estimates are published in Australian National Accounts: State Accounts, and are consistent with the sum of the four quarters, with slight differences due to timing. A brief summary of how each of these components are allocated to state are listed below.

21.95    Components that make up SFD are included below. The conceptual basis for allocation to state, as well as data sources used for this purpose, varies across components. 

21.96    Household final consumption expenditure (HFCE) is allocated by state according to the primary residence of the purchaser.

21.97    Quarterly household final consumption expenditure is largely allocated to states using the top-down approach based on indicators and price deflators. It is compiled according to the A-COICOP classification. Dwelling rent is the main exception. It is compiled using the bottom-up approach based on data from the Census of Population and Housing conducted every five years. Adjustments are also made for interstate and international household consumption.

21.98    Annual estimates for all A-COICOP categories are produced as the sum of four quarters, with differences in annual and quarterly estimates due mostly to timing differences.

21.99    The quarterly and annual sources and methods used in the compilation of HFCE can be found in Chapter 10 under the subsection "Household final consumption expenditure".

21.100    Estimates of government final consumption expenditure (GFCE) are disaggregated into Commonwealth government and State and local government.

21.101    National government final consumption includes government agencies and jointly administrated universities. National GFCE is disaggregated into defence and non-defence.  Where data is available, consumption items are allocated directly to the location in which consumption takes place. The remainder is allocated based on indicators.

21.102    Jurisdictional reporting matches regional boundaries for State and local governments. Therefore, State and local GFCE estimates are compiled using the bottom-up approach.

21.103    Annual estimates are produced as the sum of quarters with differences due to timing. 

21.104    The quarterly and annual sources and methods used in the compilation of GFCE can be found in Chapter 10, under the subsection "Government final consumption expenditure".

International trade in goods and services

21.105    International trade relates to imports and exports of goods and services of a state with a destination or source outside Australia.  This is divided into merchandise goods trade, and services trade. In the state accounts, merchandise goods trade is produced annually and quarterly, and services trade is produced annually.

21.106    International trade in merchandise goods are allocated to state based on the location at which the customs barrier is crossed.

21.107    Published state level merchandise goods trade is not consistent with trade estimates for the national accounts which is produced on a balance of payments (BoP) basis. The difference for each state is reconciled on a BoP basis, with the difference between state merchandise trade and state allocations on a BoP basis included as part of the balancing item.

Trade in merchandise goods

21.108    Trade in merchandise goods measures goods that cross the Australian customs barrier. These are allocated to state based on the location of where the customs barrier is crossed. If the goods are transported to another state this is treated as an interstate re-export, which is included in the balancing item.  In the national accounts, trade in goods is produced on a balance of payments basis which adjusts for goods which are not captured sufficiently in customs data.

International trade

21.109    International trade in services is collected as part of the ABS publication, International Trade in Services by Country, by State and by Detailed Services Category. State allocation is based on the location of units sampled as part of this survey.

21.110    The following tables outline the data sources and methods used to estimate international trade in goods and services:

Dwellings

21.111    Gross fixed capital formation for dwellings consists of the value of acquisitions of new and existing (used) dwellings less the value of disposals of existing dwellings. State estimates are derived using the top-down approach.

21.112    The following table outlines the quarterly data sources used to estimate gross fixed capital formation for dwelling construction. Annual estimates are compiled as the sum of quarterly estimates, with differences between quarterly and annual estimates due to timing.

Non-dwelling construction

21.113    Non-dwelling construction at the state level comprises of three components:

• new building
• new engineering construction
• net purchases of second-hand assets.

21.114    State estimates are derived using a top-down approach using data from BACS, ECS and GFS for second-hand assets.

21.115    Annual estimates are compiled as the sum of quarterly estimates, with differences between quarterly and annual estimates due to timing.

21.116    The following table outlines the quarterly data sources used to estimate gross fixed capital formation for private non-dwelling construction.

Machinery and equipment

21.117    Gross fixed capital formation for machinery and equipment is recorded as the value of the acquisitions of new and existing machinery and equipment less the value of the disposals of existing machinery and equipment.

21.118    At state level, private gross fixed capital formation of machinery and equipment is published with two sub-components:

• new machinery and equipment
• net purchases of second-hand assets.

21.119    The following table outlines the quarterly data sources used to estimate gross fixed capital formation for machinery and equipment. Annual estimates are produced as the sum of four quarters, with differences in annual and quarterly estimates due mostly to timing differences.

Intellectual property products

21.120    Gross fixed capital formation of research and development (R&D) is allocated to the state in which the research work occurs.

21.121    Mineral and petroleum exploration is the value of expenditure on exploration for mineral and petroleum undertaken in each state. Exploration expenditure covers all exploration activity undertaken on land and in state territorial waters, with offshore exploration in Commonwealth waters allocated to closest state of proximity.

21.122    The following table outlines the quarterly data sources used to estimate gross fixed capital formation for intellectual property products. All items with the exception of mineral and petroleum exploration are compiled annually with interpolation used to create quarterly estimates.

21.123    The following table outlines the annual data sources used to estimate gross fixed capital formation for intellectual property products.

Ownership transfer costs

21.124    Ownership transfer costs at state level consist of the following components:

• fees paid to lawyers associated with the transfer of ownership
• fees and commissions paid to real estate agents, auctioneers, architects, surveyors, engineers and valuers
• stamp duty
• titles office charges
• local government charges.

21.125    The following table outlines the quarterly data sources used to estimate gross fixed capital formation for ownership transfer costs. Annual estimates are produced as the sum of four quarters, with differences in annual and quarterly estimates due mostly to timing differences.

Cultivated biological resources

21.126    Cultivated biological resources data are compiled by state for animal resources (livestock), as well as crop and plant resources yielding repeat products (orchard growth).

21.127    The following table outlines the quarterly data sources used to estimate gross fixed capital formation for cultivated biological resources. Annual estimates are produced as the sum of four quarters, with differences in annual and quarterly estimates due mostly to timing differences.

Public corporations

21.128    Public corporations capital formation is split into Commonwealth, state and local.

21.129    The following table outlines the quarterly data sources used to estimate gross fixed capital formation for public corporations. Annual estimates are produced as the sum of quarters with differences due to timing. These timing differences can be significant due to inclusion of audited GFS data. They feed into the state accounts and the quarterly ABS publication. Australian National Accounts: National Income, Expenditure and Product.

General government

21.130    General government capital formation is allocated to Commonwealth and State and local government using data from GFS. Commonwealth is further separated into defence and non-defence.

21.131    The following table outlines the quarterly data sources used to estimate gross fixed capital formation for general government. Annual estimates are produced as the sum of quarters with differences due to timing. These timing differences can be significant due to inclusion of audited GFS data. They feed into the state accounts and the quarterly ABS publication. Australian National Accounts: National Income, Expenditure and Product.

21.132    The GSP(I/E) is a derived income and expenditure measure used to overcome the inability to derive all components of the GSP(E) measure. This approach relies on the assumption that GSP(E) is equal to GSP(I). 

21.133    The compilation of the GSP(I/E) measure involves a number of steps:

1. Derive current price GSP(I);
2. Assume GSP(I) equals GSP(E), and obtain current price GSP(I/E);
3. Aggregate known components of GSP(E) (i.e. state final demand and international trade), for current price and volume estimates;
4. Calculate adjustments to known components of GSP(I/E) for current price and volume estimates. These are largely modelled estimates which are added to ensure price deflators more accurately reflect state economies;
5. Calculate volume and current price aggregates for adjusted known components of GSP(E). This involves adding adjustment calculated as part of step 4  to aggregate known components of GSP(E) in Step 3;
6. Produce an implicit price deflator (IPD) using adjusted known components of GSP(E) created as part of Step 5;
7. Apply the IPD (from Step 6) to the current price GSP(I/E) to derive GSP(I/E) in volume terms; and
8. Create balancing item as a residual of GSP(I/E) and known components of GSP(E) for current price and volume components.

21.136    Current price and volume known components of GSP(E) are aggregated as the sum of state final demand, net international merchandise trade in goods and net trade in services.

21.137    Four adjustments are made to known components of GSP(E) to produce adjusted known components of GSP(E):

21.138    These adjustments are calculated as follows:

21.139    Sources and methods for calculating these components are described below. None of these items are published directly due to quality and confidentiality concerns with the data. Despite these concerns, removing these adjustments would adversely affect the quality of the GSP(I/E) price deflator. Calculation of the GSP(I/E) deflator is the main reason why these adjustments to known components of GSP(E) are applied.

21.140    A net interstate expenditure adjustment is made to household spending to ensure that HFCE is representative of state resident household consumption. This adjustment is offset as part adjustments to known GSP(E) item as net interstate expenditure is representative of interstate trade, and hence should be reflected in the GSP(I/E) price deflator.

21.141    This treatment is similar to that in the national accounts, where consumption by international visitors is not included as part of HFCE. The value of this is then added to GSP as part of exports of services.

21.142    Known components of GSP(E) include trade in goods on a merchandise trade basis rather than the more conceptually correct balance of payments basis. However, reconciliation to a BoP basis is made for each state. This reconciliation is made to known components of GSP(E) to ensure the balance of payments reconciliation is represented in the GSP(I/E) deflator.

21.143    Interstate trade relates to imports and exports of domestically produced goods between states and territories. Data for Queensland is based on historic estimates sourced from the ABS publication, Interstate Trade, Queensland. Data for the remaining jurisdictions are based on activity indicators that are used to extrapolate historic estimates produced by the Centre of Policy Studies (CoPS) at Monash University. This methodology assumes that state relativities have remained static since the 1980s.

21.144    Interstate re-exports/imports occur when the state of final destination of international trade is different to the state in which goods cross the customs barrier. Similarly to interstate trade in goods, this estimate is produced by extrapolating historic estimates produced by CoPS using volume indicators of international trade.

21.152    The identified component of the balancing item includes some items for which estimates are produced but are not of sufficient reliability to publish. The following are calculated as part of the adjustment to known components of GSP(E):

• net HFCE interstate
• net BoP basis reconciliation to international merchandise goods trade
• modelled net interstate goods trade
• modelled interstate re-exports/imports.

21.153    Additionally estimated are:

• changes in inventories
• balancing item discrepancy.

21.154     Changes in inventories are split using the top-down approach at an industry level to states based on state GVA for these industries. State splits of changes in inventories are only produced for analytical purposes and are not published.

21.155    The balancing item discrepancy is the allocation of the national statistical discrepancy across the states. This ensures consistency between the sum of the states and Australia. It is allocated to states based upon state shares of GSP(I) for both current price and volume estimates.

21.156    The unidentified component of the balancing item is calculated residually as follows:

21.157    The unidentified component conceptually represents interstate trade in services, but it also embodies any remaining discrepancies that occur across state measures of expenditure and income due to underlying measurement issues.

21.164    Annual state by industry splits of GVA are produced using a top-down output indicator approach. National industry estimates of GVA are apportioned across states and territories using indicators of output. For each industry division, except Agriculture, Forestry and Fishing, the national ratio of output to intermediate use is assumed to be equal across states and territories.

21.165    Indicators of output are predominantly based on state by industry subdivision sales data from the Economic Activity Survey. Other data are used as indicators where they are more relevant or where EAS is not available.

21.166    The following tables provide additional detail on the method and data sources used to estimate GVA in current prices and volumes.

21.167    Taxes and subsidies on products by state and territory are calculated as described in the taxes less subsidies on production and imports section of the Income from Gross State Product: GSP(I) subchapter.

21.168    State household income accounts are estimated using the top-down approach. A range of indicators are used to allocate national totals to state.

21.169    In concept, the household sector of a state consists of household units which have permanent residence within the state. This is independent of where household units work or undertake business activities. It follows that workers who work in a state other than their state of residence should be reallocated to their place of residence rather than their place of work. Data sources do not permit this reallocation. Therefore, an assumption is made that all workers work in their state of residence.

21.170    Household net saving is not produced at the state level because of the unavailability of state consumption of fixed capital for households. Consequently, gross household saving is estimated directly unlike net saving in the national accounts.

21.171    The following table outlines the components of the household income and data sources used to allocate the national total across the states:

21.172    The agricultural income account details the primary income flows for the agriculture industry, corresponding to ANZSIC Subdivision 01 Agriculture. It combines estimates for agricultural GVA, GOS/GMI and COE with other expenses to produce agricultural income.

21.173    The key aggregates of agricultural income are:

• agriculture GVA at basic prices
• agriculture GVA at producer prices
• agricultural income.

21.174    Agricultural income is calculated as follows:

where agricultural GOS/GMI is calculated as:

21.175    The following calculation shows how gross value added for both basic prices and producer prices is derived from agricultural income:

21.176    The following table outlines the components of the agricultural income account and data sources used to allocate the national total across the states: