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Chapter 13 The income account

Australian System of National Accounts: Concepts, Sources and Methods
Reference period
2020-21 financial year

Types of income accounts and additional components to compile income accounts

Types of income accounts

13.1    The national income account shows how gross disposable income is used for final consumption expenditure and the consumption of fixed capital (depreciation), with the balance being the nation's net saving. On the sources of income side, it shows compensation of employees, gross operating surplus, gross mixed income (from unincorporated enterprises) and taxes less subsidies on production and imports. Net secondary income from non-residents is added to derive gross national disposable income.

13.2    Saving is carried forward into the capital account. Saving must be used to acquire financial or non-financial assets of one kind or another, including cash, the most liquid of financial assets, or to reduce liabilities. When saving is negative, the excess of consumption over disposable income must be financed by disposing of assets or incurring liabilities.

National income account
Sources of incomeUse of income
Compensation of employeesFinal consumption expenditure
Gross operating surplus General government final consumption expenditure
Gross mixed income Households final consumption expenditure
Taxes less subsidies on production and importsConsumption of fixed capital
Net primary income from non-residentsNet savings
Gross national income Non-financial corporations
Net secondary income from non-residents Financial corporations
 Current taxes on income, wealth, etc. General government corporations
 Other secondary income Households
Gross disposable incomeGross disposable Income

13.3    The sectoral income accounts are disaggregations of the national income account, and record for each institutional sector its net income arising both from production and from transfers from other sectors, and its uses of income (disbursements). The difference between income and use of income is net saving (the balancing item). Income accounts are also compiled for selected subsectors. As consumption of fixed capital is not calculated for some subsectors, the balancing item in their subsector accounts is equal to net saving plus consumption of fixed capital (i.e. gross saving). This applies to public and private non-financial corporations subsectors.

13.4    The income accounts for corporations (both financial and non-financial), show income arising from gross operating surplus from the Income from GDP account and property income (such as interest, dividends, reinvested earnings on direct foreign investment and investment funds, property income attributed to insurance policyholders, and rent on natural assets) from other sectors. Total income is used to make various payments (such as interest, dividends, reinvested earnings on direct foreign investment and investment funds, property income attributed to insurance policyholders, and rent on natural assets) to other sectors. The balance is the saving of the respective sectors and is transferred to their capital accounts.

13.5    The following tables are representations of the non-financial and financial corporations income accounts as presented in the ASNA. The subsectoral accounts for private and public non-financial corporations are consistent with the non-financial corporations account.

Non-financial corporations income account
Sources of incomeUse of income
Primary income receivablePrimary income payable
 Gross operating surplus Property income payable
 Property income receivable  Interest
  Interest  Dividends
  Dividends  Reinvested Earnings
  Reinvested Earnings  Rent on natural assets
  Property income attributed to insurance policy holders   
  Rent on natural assets   
Secondary income receivableSecondary income payable
 Non-life insurance claims Current taxes on income, wealth, etc.
 Other current transfers  Income taxes
     Other current taxes on income, wealth, etc.
    Net non-life insurance premiums
    Current transfers to non-profit institutions
    Other current transfers
  Gross disposable income
  Consumption of fixed capital
  Net saving
Total gross incomeTotal use of gross income
Financial corporations income account
Sources of incomeUse of income
Primary income receivablePrimary income payable
 Gross operating surplus Property income payable
 Property income receivable  Interest
  Interest  Dividends
  Dividends   Reinvested earnings
  Reinvested earnings  Property income attributable to insurance policy holders
  Rent on natural assets  Rent on natural assets
Secondary income receivableSecondary income payable
 Net non-life insurance premiums Current taxes on income, wealth, etc.
 Other current transfers  Income taxes
     Other current taxes on income, wealth, etc.
    Net non-life insurance claims
    Other current transfers
   Gross disposable income
   Consumption of fixed capital
   Net saving
Total gross incomeTotal use of gross income

13.6    The income account of the household sector shows compensation of employees, gross mixed income (on account of unincorporated enterprises) and gross operating surplus on dwellings owned by persons, which are all from the Income from GDP account, as well as property income (interest, dividends, reinvested earnings on investment funds, property income attributed to insurance policyholders and rent on natural assets) from other sectors, social benefits receivable (social insurance benefits – workers' compensation claims and social assistance benefits) and various other forms of secondary income (such as non-life insurance claims, current transfers to NPIs and other current transfers). Use of income shows final consumption expenditure, consumer debt interest and dwellings and other property income payable, income taxes and other current taxes payable, other current transfers, consumption of fixed capital (on account of unincorporated enterprises and dwellings owned by persons) and net saving (the balancing item).

13.7    The following table is a representation of the household income account as presented in the ASNA.

Household income account
Sources of incomeUse of income
Primary income receivablePrimary income payable
 Gross operating surplus - dwellings owned by persons Property income payable
 Gross mixed income  Interest - Dwellings
 Compensation of employees  Interest - Consumer debt
 Property income receivable  Interest - Unincorporated enterprises
  Interest  Rent on natural assets
  Imputed interest   
  Dividends   
  Reinvested earnings   
  Rent on natural assets   
Secondary income receivableSecondary income payable
 Social benefits receivable Income tax payable
  Workers' compensation Other current taxes on income, wealth, etc.
  Social assistance benefits Social contributions for workers' compensation
 Non-life insurance claims Net non-life insurance premiums
 Current transfers to non-profit institutions Other current transfers
 Other current transfers  Non-residents
  Non-residents  Other sectors
  Other sectors   
   Gross disposable income
   Final consumption expenditure
   Consumption of fixed capital
   Net saving
Total gross incomeTotal use of gross income

13.8    The general government income account shows receipts from income taxes, other taxes on income, wealth, etc., taxes on production and imports, property income (interest, dividends and rent on natural assets) and gross operating surplus (which is equal to consumption of fixed capital for the general government sector). The use of income side shows final consumption expenditure, property income payable to other sectors, subsidies, social assistance benefits and other current transfers to non-residents and other sectors, consumption of fixed capital and net saving (the balancing item).

13.9    The following table is a representation of the general government income account as presented in the ASNA. The subsectoral accounts for the National and State and Local government accounts are consistent with the general government income account.

General government income account
Sources of incomeUse of income
Primary income receivablePrimary income payable
 Gross operating surplus Property income payable
 Taxes on production and imports  Interest - On unfunded superannuation liabilities
 Property income receivable  Interest - Other interest
  Interest Subsidies
  Dividends - Public non-financial corporations  
  Dividends - Public financial corporations   
  Dividends - Other   
  Rent on natural assets   
Secondary income receivableSecondary income payable
 Current taxes on income, wealth,etc Social assistance benefits in cash to residents
 Other current transfers Other current transfers
     Non-residents
     Other sectors
   Gross disposable Income
   Final consumption expenditure
   Consumption of fixed capital
   Net saving
Total gross incomeTotal use of gross income

13.10    In the core income accounts, social transfers in kind are technically part of government final consumption expenditure because they are produced and purchased by government. However, income redistribution also includes social transfers in kind, that is, social benefits in kind transferred from the government to households. For analytical purposes, it is useful to show the value of these transfers as part of household, rather than government, final consumption expenditure to form a broader aggregate called actual individual consumption. These are represented in the adjusted disposable income accounts as secondary income transfers from the government sector to the household sector with corresponding adjustments to the final consumption expenditures of the two sectors.

13.11    The following tables outline both the general government adjusted disposable income account and the household adjusted disposable income account as presented in the ASNA.

General government adjusted disposable income account
Sources of incomeUse of income
Gross disposable income   
Outlays in kind Actual collective consumption 
Social assistance benefits in kindConsumption of fixed capital
Transfers of individual non-market goods and servicesNet saving 
Adjusted disposable income Total saving and use of adjusted disposable income
Household adjusted disposable income account
Sources of incomeUse of income
Gross disposable income   
Social transfers in kind Actual individual consumption 
Social assistance benefits in kindConsumption of fixed capital
Transfers of individual non-market goods and services from general governmentNet saving 
Adjusted disposable income Total saving and use of adjusted disposable income

Additional components to compile income accounts

13.12    Income flows are divided into primary income and secondary income. Primary incomes are incomes that accrue to institutional units as a consequence of their involvement in processes of production or ownership of assets that may be needed for purposes of production. Therefore, primary income consists of the components used to derive production, namely compensation of employees, gross operating surplus, gross mixed income and taxes less subsidies on production and imports, as well as property income which accrues by lending or renting financial or natural resources, including land, to other units for use in production.

13.13    Secondary incomes are incomes that are redistributed between institutional units by means of payments and receipts of current transfers. A current transfer is a transaction in which one institutional unit provides a good or service to another unit without receiving from the latter any good or service directly in return as counterpart and does not oblige one or both parties to acquire, or dispose of, an asset.

13.14    In the adjusted disposable income accounts of the general government sector and the household sector, social transfers in kind are shown as part of household rather than government final consumption expenditure to represent actual individual consumption for analytical purposes.

13.15    Therefore, the additional components required to compile the income account are:

  • property income;
  • current taxes on income, wealth, etc.
  • social contributions and social benefits;
  • net non-life insurance premiums and non-life insurance claims;
  • miscellaneous current transfers; and
  • social transfers in kind.