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Property income

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

Introduction

13.16    Property incomes are received by the owners of financial assets and non-produced non-financial assets such as land and mineral and energy resources. Property income accrues when an assets' owner puts the asset at the disposal of other institutional units. Units with surplus funds lend or provide equity finance to other units and derive property income in the form of interest, dividends, etc. Owners of land and mineral and energy resources arrange leases or other contracts with other units who pay rent to the owners. Regular payments made by lessees of mineral and energy resources are sometimes known as royalties but are treated as rents in the national accounts. A distinction is made between rent, which is a form of property income derived from non-produced assets, and rentals payable under operating leases relating to produced assets, including dwellings and other buildings. Under operating leases, rentals are treated as output of the lessor and purchase of a service by the lessee.

13.17    Property income is recorded net of intra-sector receipts and payments (i.e. property income flows within an institutional sector are not recorded because they cancel out on consolidation). While the household sector may be disaggregated into its business (unincorporated trading enterprises) and non-business subsectors, property income flows between these subsectors are considered intra-sector and are netted out. In relation to property income payments by the household sector, a distinction is drawn between consumer debt interest paid by households and interest on loans for business purposes paid by their unincorporated trading enterprises.

13.18    In the ASNA, property income is presented for the following categories: interest, property income attributed to insurance policyholders, dividends, rent on natural assets and reinvested earnings on direct foreign investment and investment funds.

Interest

13.19    Interest is receivable by the owners of financial assets such as deposits, loans, and securities other than shares. Interest is the amount that the debtor becomes liable to pay the creditor over a given period of time without reducing the amount of the principal outstanding. However, interest that accrues and is not paid may be added to the principal amount. In the system, the addition of outstanding interest to the principal constitutes a separate financing transaction. Under the accrual basis of recording used in the system, interest which, under the terms of the contract, does not have to be paid until the asset matures, nevertheless must be attributed to the accounting periods over which it accrues. Under a financial lease the lessor is treated as making a loan to the lessee. Interest on such loans is a component of the lease payments, which have to be broken down between interest and repayment of principal.

13.20    Banks and similar financial intermediaries largely finance their operations by charging higher interest rates on their loans than they pay out on deposits. In effect, the interest paid by borrowers, referred to in the 2008 SNA as 'bank interest', can be regarded as comprising two components, a service charge and a 'pure' interest flow. Likewise, the 'bank interest' paid to depositors can be viewed as a 'pure' interest flow from which a service charge has been deducted. The 2008 SNA refers to the pure interest as 'SNA interest’. As these service charges cannot be measured directly, the imputed charges are accordingly referred to as financial intermediation services indirectly measured (FISIM).

13.21    FISIM for a particular category of financial intermediaries is the sum of the imputed service charges for both borrowers and depositors. The service charge on borrowers is calculated as the level of loans outstanding multiplied by the difference between the average interest rate received on loans and a 'pure' interest rate. Similarly, the service charge on depositors is calculated as the level of deposits multiplied by the difference between the 'pure' interest rate and the average interest rate paid on deposits. The reference rate should contain no service element and reflect the risk and maturity structure of deposits and loans and could be determined as being equal to a particular market rate of interest. The ASNA uses the mid-point between the average interest rate on loans and the average interest rate on deposits (for practical reasons) as the reference rate of interest, and the long-term bond rate for institutions that are not deposit taking institutions.

13.22    FISIM output is estimated for the following financial intermediaries: banks, other depository corporations, central borrowing authorities and securitisers. The interest flows recorded in the sectoral income accounts are after adjusting the actual interest flows by FISIM relating to both borrowers and depositors. Consequently, interest paid by banks (and similar financial intermediaries) and received by depositors is increased by the amount of FISIM payable by depositors, while interest received by banks (and similar financial intermediaries) and paid by borrowers is reduced by the amount of FISIM payable by borrowers in each institutional sector (e.g. households, general government, non-financial corporations).

13.23    There are two schools of thought on the measurement of income flows on tradeable securities during times of changing interest rates. The debtor approach records the interest accruing at the contractual rate agreed at the time of issue of the security. The creditor approach records the interest accruing at the current market interest rate. Proponents of the debtor approach argue that it records the legal liability of the debtor to the creditor. Proponents of the creditor approach argue that it is consistent with the market valuation principle. The 2008 SNA recommends the debtor approach be applied for recording interest accruing on debt securities. However, the ABS believes that this approach leads to complications as interest rates may change after the date of issue of variable interest rate instruments. Therefore, the ASNA applies the creditor approach as the best reflection of the market reality in terms of valuing the underlying instrument and the interest that accrues over the life of the instrument.

Property income attributed to insurance policyholders

13.24    Property income flows also include imputed flows relating to life insurance, pension funds and non-life insurance operations. Three distinct categories of such flows are included in the sectoral income accounts:

13.25    Imputed interest from life insurance and pension funds to households is recorded as the current income earned by statutory funds on behalf of policyholders. This income mainly comprises interest (adjusted for FISIM) and dividend income earned by the funds, but it also includes net rental income earned on real property such as office buildings which are owned by the statutory funds (separately constituted long-service leave boards are also included with these funds). In effect, the net increase in policyholders' equity in the funds (excluding capital gains and losses) is regarded as being transferred from the funds to households and is also recorded as an imputed flow in the sectoral financial accounts from households back to the funds (recorded as Net equity of households in reserves under the category Insurance technical reserves).

13.26    Premium supplements are recorded as an imputed property income flow from non-life insurance corporations to policyholders. Premium supplements represent income earned on the technical reserves of non-life insurance corporations, which consist of unearned premiums (most premiums are paid for a full year in advance) and unpaid claims (which arise because of delays in finalising the payment of claims). Premium supplements do not include any income from the investment of insurance corporations' own funds. The interest component of the investment income is net of FISIM.

13.27    Imputed interest from the general government sector to households is recorded on account of the unfunded superannuation schemes operated by the general government sector.

13.28    In Australia, most governments operate, or used to operate, superannuation schemes that are unfunded or only partly funded for their employees. Some general government schemes have one component funded through direct employee contributions, and another (the employer's contributions) which is unfunded. Other general government schemes comprise only an unfunded employer component.

13.29    In the ASNA, the increase in the liabilities of a public sector employer due to the current services provided by employees covered by unfunded superannuation schemes must be imputed. Public sector accounting standards specify how such imputations should be calculated.

13.30    The value of these imputed contributions is estimated as the amount which the employer would be required to pay into a separate superannuation fund if the scheme were to be operated as a fully funded scheme. The general government employer does not transfer the imputed contributions into a separate superannuation fund, but instead effectively borrows this amount and should therefore pay property income on the outstanding liability of the unfunded scheme. Consequently, a further imputation is included in the income accounts of general government and households for imputed interest on the accruing liability to pay unfunded superannuation.

13.31    For the purposes of deriving the imputed flows on account of general government unfunded superannuation, a notional superannuation 'fund' is created which is treated as a financial asset of the household sector and a liability of the general government sector. Consistent with the operation of funded schemes, imputations are derived for both the employers' contributions to the notional fund and property income on the notional use of the assets of the fund in each period by general government. Only the imputed employers' contributions are included in compensation of employees, government final consumption expenditure and GDP. Both components, however, impact on household and general government saving. This approach ensures that government final consumption expenditure and GDP are not affected by whether general government superannuation schemes are funded or unfunded. The outstanding liability in relation to unfunded superannuation schemes is recorded as a liability in the general government balance sheet and as an asset in the household balance sheet.

Dividends

13.32    Corporations raise equity capital through the issue of shares, and shareholders become entitled to dividends as a form of property income for having placed funds at the disposal of the corporations. Dividends include all distributions of profits by corporations, whether or not the distributions are called dividends. Issues of bonus shares in lieu of dividends are not included. In the ASNA, dividends are not recorded on a strict accrual basis, with the time of recording dividends being the point at which the share price starts to be quoted on an ex-dividend basis (rather than at a price that includes the dividend). Super dividends occur when the dividends are disproportionally large relative to the recent level of dividends and earnings. They are treated as a financial transaction, specifically the withdrawal of owners' equity from the corporation.

13.33    Dividends payable to general government by public corporations (or quasi-corporations) record that part of the income of public corporations which is paid to general government, whether described by the corporations (or quasi-corporations) as dividends or transfers of profits. Income tax and other forms of taxation are excluded.

13.34    The sectors and subsectors total dividend payable and receivable estimates are used to derive a dividend matrix of the flows of dividends between the various sectors and subsectors of the economy, including the external sector. Rest of the world, general government and public non-financial corporation dividend flows are allocated to their counterparty sector based on annual ratios. The quarterly sectoral estimates are then aggregated up to determine total dividends received and paid by each of the domestic sectors.

13.35    Dividends paid by financial corporations and private non-financial corporations are benchmarked to the annual estimate using data from APRA and ASX100 financial reports. Dividends paid by private non-financial corporations and financial corporations, and dividends received by private non-financial corporations, households and financial corporations are then calculated as the sum of their lower level counterparty information. This matrix represents a balanced system so that total payments equal total receipts and therefore there is no quarterly imbalance.

Withdrawals from income of quasi-corporations 

13.36    Quasi-corporations are unincorporated enterprises that behave as if they were corporations. Quasi-corporations cannot distribute profits by way of dividends because they are not corporations. Nevertheless, the owner of a quasi-corporation may choose to withdraw some or all of the entrepreneurial income of the quasi-corporation. Such withdrawals are the conceptual equivalent of dividends and are distinguished in order to separate the income of the quasi-corporation from the income of the owner.

13.37    Because quasi-corporations must, by definition, keep a full set of accounts, withdrawals of income should be explicitly identified in the accounts. Such withdrawals must be distinguished from withdrawals of funds realised as a result of the disposal of assets, which constitute capital disposal by the quasi-corporation and withdrawal of equity (a financing transaction) by the owner. Withdrawals financed by liquidating large amounts of accumulated retained earnings are treated in the same manner. Conversely, funds provided by the owner so that the quasi-corporation can acquire assets or reduce liabilities are treated as equity injections – there is no concept of negative withdrawals of income.

Reinvested earnings

13.38    Reinvested earnings relate to that component of income that is not distributed to equity and or unit holders in direct foreign investment enterprises, and resident and non-resident investment funds in the form of dividends. In effect, retained earnings are treated as if they are distributed and remitted to investors in proportion to their ownership of the equity in the enterprise or fund and then reinvested by them. They are imputed transactions, with offsetting entries being recorded in property income flows in the income account and the 'shares and other equity' items in the financial account.

Reinvested earnings on direct foreign investment

13.39    A foreign direct investment enterprise is either a branch (including unincorporated joint ventures) of a non-resident enterprise or an enterprise, either corporate or unincorporated, in which at least one foreign investor owns sufficient shares to have an effective voice in the decision making processes of the enterprise. In these cases, an amount of the enterprise's retained earnings, proportional to the ownership of the foreign direct investor, is imputed as a remittance of property income to the foreign direct investor, even though the remittance does not take place in practice. An equal amount (with opposite sign) is shown as reinvestment of retained earnings, a financing transaction. This treatment is adopted because it is considered that direct investors, through their significant influence on the operations of the direct investment enterprise, are able to determine the level of distributed income and therefore the reinvested earnings of the direct investment enterprise.

13.40    Reinvested earnings on direct foreign investment are measured on the basis of the direct investors' equity share in the gross operating surplus, transfer income and other current income of the direct investment enterprise. Gross operating surplus represents income from the normal operations of the enterprise and does not include holding gains or losses. Earnings of direct investment enterprises are measured after deducting a provision for corporate taxes and consumption of fixed capital.

Reinvested earnings on resident and non-resident investment funds

13.41    Investment income attributed to holders of shares or units in investment funds is shown as two separate items. The first of these is the dividends distributed to investment fund shareholders. The second is retained earnings attributed to investment fund shareholders. These earnings are attributed to the investors as an imputed dividend payment and an imputed purchase of additional equity (reinvestment). This treatment adds to the fund's equity and its liabilities to the unit holders and leaves the investment fund with no saving and increases the saving of the investor. This treatment is adopted for investment funds on the grounds that investors are able to withdraw and reinvest their equity in the investment funds.

Rent on natural assets

13.42    Rent is the income receivable by the owner of a natural resource (the lessor or landlord) for putting the natural resource at the disposal of another institutional unit (a lessee or tenant) for use of the natural resource in production. The resource rent is applicable for rents on land, native standing timber and mineral and energy resources. Note there is a distinction between rent and the rentals receivable and payable under an operational lease. The latter are treated as sales or purchases of services whereas the former is property income.

13.43    Rent on land is recorded as accruing continuously to the landowner throughout the period of the contract between the landowner and tenant and is equal to the value of the accumulated rent payable over that period of time. The owners of mineral and energy resources, whether private or government units, grant leases to other institutional units permitting them to extract deposits over a specified period of time in return for the payment of rent. These payments are commonly referred to as royalties.

Sources and methods - Annual

13.44    Property income estimates are derived by constructing matrices of the flows of property income between the various sectors and subsectors of the economy, including the external sector. The matrices represent a balanced system so that total payments of property income equal total receipts of property income. The interest and dividends matrices are by far the largest and include each of the broad types of financial institutions as well as the non-financial sectors of the economy. The matrices relating to land rent and rent on other natural assets are compiled at the institutional sector level only.

13.45    The tables below outline the data sources and methods used in the estimation of annual property income by type of property income in current prices.

Table 13.1 Annual primary income - Property Income - Interest and dividends
ItemComment
Interest and dividends

 

Balance sheet, income and expenditure and interest rate information are used to compile interest and dividend flows by financial instruments (deposits, bills of exchange, one-name paper, bonds, loans and equities) and the counterparty sectoral and subsectoral flows for the following 15 sectors and subsectors: rest of the world; the central bank; banks; other depository corporations; central borrowing authorities; non-life insurance corporations; national general government; state and local general government; national public non-financial corporations; state and local public non-financial corporations; life insurance corporations; pension fund; financial intermediaries not elsewhere classified; private non-financial corporations; and households.

The following outlines the data sources used to estimate the various components of interest and dividends:

Balance sheets:

  • ABS publications:  Australian National Accounts: Finance and Wealth; Assets and Liabilities of Australian Securitisers; Managed Funds, Australia; and the Australian System of National Accountsfor capital stock estimates; and
  • Australian and Prudential Regulatory Authority Monthly Bank Statement of Financial Position – detailed breakdown for bank loans and deposits.

Income and expenditure:

  • RBA publications:  Annual Report; Financial Stability Report (6 monthly); Statement of Monetary Policy (quarterly);
  • ABS publications:  Balance of Payments and International Investment Position, Australia; Statistics of Financial Institutions (publication has ceased, but the data in this publication still underpins estimates);
  • ABS Collections:  Economic Activity Survey; Quarterly Survey of Financial Information, and Government Finance Statistics;
  • Suite of APRA forms:  Quarterly Bank Statement of Financial Performance, Quarterly Registered Financial Corporations Statement of Financial Performance and Quarterly Superannuation Statistics;
  • APRA publications:  Quarterly Banks, Building Societies, Credit Unions, Life Insurance, Superannuation and General Insurance Performance Statistics; and
  • ATO publication: Annual Taxation Statistics.

Interest rates and dividend yields

  • RBA publications:  Statistical Bulletin.

Three data sources are required to compile the flows:

  • total interest/dividend payable and receivable;
  • interest or dividend yields for relevant financial instruments of various sectors/subsectors; and
  • financial assets and liabilities for the sectors and subsectors.

The sectors' and subsectors' total interest and dividend payable and receivable estimates are used to derive interest and dividend matrices of the flows of interest and dividends between the various sectors and subsectors. The matrices represent a balanced system so that total payments of interest and dividends equal total receipts of interest and dividends.

  • For each year, five interest matrices are compiled representing interest flow for deposits, bills of exchange, one name paper, bonds and loans. The five matrices are summed into an aggregate matrix and the interest flows from this aggregate matrix are consolidated to the sectors and subsectors published in the ASNA.
  • For dividends, a single matrix is constructed and the dividend flows from this matrix are consolidated to sectors and subsectors published in the ASNA.

Wherever possible, actual interest or dividends flows are used to construct the interest and dividend matrix. Indirect estimation methods are used to complete the full matrix because there is insufficient data on flows by instrument and counterparty. For example, average interest rates (or dividend yields) are applied to sectoral balance sheet information to derive the detailed estimates of flows by instrument and counterparty. These estimates are either used as a direct estimate of a flow or are used as a basis for splitting the total flows to the detail required. Total flows are either estimated directly from source data or are derived by aggregation.

The interest flows relating to loans and deposits are adjusted to allow for FISIM. Interest flows from borrowers to financial intermediaries are reduced by FISIM, while interest flows from financial intermediaries to depositors are increased by FISIM.

Adjustments are also made to put interest on debt securities onto an accrual basis for all sectors, except the external sector. This is achieved by replacing estimates of nominal interest flows for debt securities for a particular sector by an accrual estimate obtained by applying the current market rate of interest for debt securities to the average balance sheet level of debt securities for that sector. Accrued interest on debt securities for transactions with the external sector are sourced directly from the Balance of Payments and, consequently, do not require any adjustment before they are included in the interest matrix.

Table 13.2 Annual primary income - Property Income - Property income attributed to insurance policyholders
ItemComment
Life insurance and pension funds
 

 

Imputed property income attributable to life insurance and pension fund policyholders is calculated as:

     Gross operating surplus
     plus interest receivable
     plus dividends receivable
     less interest payable
     less taxes payable
     less consumption of fixed capital
     less income to shareholders.

 Gross operating surplus
 

 

From the annual benchmarks and latest year estimates for GOS for life insurance corporations and pension funds.

The GOS estimate includes rental income earned on real property such as office buildings which are owned by the life insurance statutory funds and pension funds.

 Interest and dividends receivable and payable
  Estimates are derived from the interest and dividends matrices. Estimates for interest are adjusted for FISIM. FISIM is added to the total interest received (from deposits) and deducted from interest paid (on loans). Pension funds do not pay dividends.
 Taxes payable
  Estimates for taxes payable are sourced from Government Finance Statistics.
 Consumption of fixed capital
  Estimates for consumption of fixed capital are obtained from the Perpetual Inventory Method (PIM).
 Income to shareholders
  The proportion of shareholders' funds to total assets (from the Life Insurance balance sheet from the ABS publication, Australian National Accounts: Finance and Wealth is applied to total income to derive an estimate of shareholders' income. Pension funds do not have shareholders.
Non-life insurance corporations
 

 

Imputed property income attributable to non-life insurance and pension fund policyholders is equal to:

  • premium supplements.

Premium supplements are calculated as the proportion of policyholders funds to total assets of non-life insurance corporations (from the APRA's Quarterly General Insurance Performance Statistics and General Insurance Supplementary Statistical Tables) which is applied to total income to derive premium supplements. Total non-life insurance investment income is derived from the interest and dividend matrices (the interest share of investment income is net of FISIM).

Unfunded superannuation fund
 

 

Data up to 1997-98 for imputed employer contributions and imputed property income flows are modelled based on estimates of unfunded employee entitlements from the ABS publication, Government Financial Estimates, Australia, and implicit employer contribution rates provided by the Australian Government Actuary (AGA). Both of these sources provide data which are derived from actuarial calculations. The model is applied to annual data. Quarterly estimates for the imputed employer contributions and imputed property income flows are derived using appropriate indicators.

With the introduction of accrual accounting in the Commonwealth and State general government sectors direct estimates of both the imputed employer contributions to unfunded superannuation and the imputed interest on the outstanding liability are now being compiled by the Commonwealth, State and Territory Treasuries. From 1998–99, these direct estimates are generally used, although some adjustments are required to the estimates for some States to ensure that the estimates for all jurisdictions are on as comparable a basis as possible.

Table 13.3 Annual primary income - Property Income - Reinvested earnings

Item

Comment

Reinvested earnings on direct foreign investment and non-resident investment funds

 

Estimates for reinvested earnings for foreign direct investment and non-resident investment funds are sourced from the quarterly Survey of International Investment.

The survey provides data on reinvested earnings on direct foreign investment, both payable to non-residents and receivable from non-residents.

For investment funds, direct data and some modelled estimates are used to estimate amounts payable to non-residents and receivable from non-residents.

Reinvested earnings resident investment funds

 

Balance sheet and income and expenditure data are used to compile reinvested earnings for the following resident investment funds, non-financial investment funds (Infrastructure funds, listed and unlisted property trusts), money market financial investment funds (cash common funds and cash management trusts) and non-money market financial investment funds (unlisted mortgage trusts, listed invested companies, wholesale trusts, non-cash common funds and other trusts).

Reinvested earnings of these funds are allocated to financial corporations, private non-financial corporations and household sectors.

The following outlines the data sources used to estimate the various components of reinvested earnings:

Balance sheets:

  • ABS publications:  Australian National Accounts: Finance and Wealth.

Income and expenditure:

  • ABS collections: Quarterly Survey of Financial Information (Money Market Investment Funds, Non-Money Market Investment Funds and Investment Managers);
  • Australian Securities Exchange market capitalisation data for listed investment companies; and
  • ad hoc reports: superannuation actuarial reports and annual reports for listed investment companies.

Reported income and expense data from surveys and annual reports are used to derive reinvested earnings for the domestic investment funds as:

     Total Income
     less expenses
     less capital gains and losses
     less dividends.

The reinvested earnings of the domestic investments funds are allocated to domestic reinvested earnings receivable using quarterly sectoral asset holders of the equity issued by the investment funds from the ABS publication, Australian National Accounts: Finance and Wealth.

The compilation process for reinvested earnings described above produces quarterly estimates, and the sum of the four quarters is used as the annual estimate.

Table 13.4 Annual primary income - Property Income - Rent on natural resources

Item

Comment

Rent on natural resources

 

Rent on natural assets is mainly paid by corporations and unincorporated enterprises, and received by general government, public corporations and persons.

Major data sources used are the government administrative records used to compile Government Finance Statistics and are used directly where data is available. Some modelled estimates are used to estimate rent on natural assets received by households.

Total rent on natural assets is compiled as the sum of rent on land and royalties on natural assets for each sector.

Rent on land paid by households is derived as a residual using the following calculation:

     Rent on land received by general government
     plus rent on land received by public corporations
     less rent on land paid by non-financial corporations
     equals rent on land paid by households

Royalties on natural assets paid by private non-financial corporations is derived as a residual using the following calculation:

     Royalties on natural assets paid by non-financial corporations
     plus royalties on natural assets received by public corporations
     less royalties on natural assets paid by non-financial corporations
     less royalties on natural assets paid by households
     equals royalties on natural assets non-financial corporations

Sources and methods - Quarterly

13.46    On a quarterly basis, property income estimates are compiled for each sector, including private and public non-financial corporations. The external account is compiled using Balance of Payments statistics.

13.47    The tables below outline the data sources and methods used in the estimation of quarterly property income by sector by type of property income in current prices.

Table 13.5 Quarterly primary income - Property Income - Interest
ItemComment
Public sector
 

Quarterly indicators for public sector interest series are sourced from Government Finance Statistics. Data are derived from administrative sources such as the Commonwealth Department of Finance, State government financial statements, and quarterly surveys of local government authorities and public non-financial corporations.  Public financial corporations are surveyed on an annual basis only.

These quarterly estimates are used as indicators to produce interest series for general government and public non-financial corporations by applying a benchmarking process to the corresponding annual series.

Private sector

 

Quarterly indicators for private sector interest series are based on quarterly banks, other depository corporations and securitisers data and banks' FISIM. Banks are the biggest contributor to interest flows and FISIM out of all the financial intermediaries in Australia. Using indicators based on bank data is considered to produce a good representative estimate for quarterly household interest.

Quarterly balance sheets, income and expenditure and interest rate information are used to compile interest flows for banks, other depository corporations and securitisers by financial instruments (deposits, bills of exchange, one-name paper, bonds and loans) and by all counterparty sectoral and subsectoral flows.

The estimates are compiled using bank balance sheets (Australian National Accounts: Finance and Wealth and monthly RBA Statistical Bulletin); detailed loans and deposits data (APRA forms from the monthly bank Statement of Financial Position); income and expenditure (suite of APRA forms from the quarterly Statement of Financial Performance – banks and APRA publications, Quarterly Banks, Building Societies and Credit Unions Performance Statistics) and indicator interest rates (monthly RBA Statistical Bulletin).

Households

 

Household interest receivable is calculated as:

  

Bank interest payable on deposits to persons, unincorporated enterprises and NPISHs
plus
other depository corporations interest payable to households
equals
interest received by households indicator
equals
household interest receivable before adjusting for FISIM (the interest receivable by households indicator series is used to derive the quarterly household interest receivable before adjusting for FISIM series by applying a benchmarking process to the annual interest receivable by households)
plus
FISIM for household final consumption expenditure on deposits (the bank FISIM for household final consumption expenditure on deposits indicator series is used to derive the quarterly series by applying a benchmarking process to the annual series for household final consumption expenditure FISIM on deposits).

 

Household interest payable on dwellings is calculated as:

  

Bank interest receivable from housing
plus
other depository corporations interest receivable on housing
plus
securitisers interest receivable on housing
equals
 interest payable on dwellings indicator
equals
interest payable on dwellings before adjusting for FISIM (the interest payable on dwellings indicator series is used to derive the quarterly interest payable on dwellings before adjusting for FISIM series by applying a benchmarking process to the annual interest payable on dwellings series)
minus
FISIM for intermediate use for dwellings (the bank FISIM for intermediate use for dwellings indicator series is used to derive the quarterly series by applying a benchmarking process to the annual series for dwelling FISIM).

 

Household interest payable on consumer debt is calculated as:

  

Bank interest receivable from personal loans (consumer credit)
plus
other depository corporations interest receivable on personal loans
equals
interest payable on consumer debt
equals
interest payable on consumer debt before adjusting for FISIM (the interest payable on consumer debt indicator series is used to derive the quarterly interest payable on consumer debt before adjusting for FISIM series by applying a benchmarking process to the annual interest payable on consumer debt series)
minus
FISIM for household final consumption expenditure on loans (the bank FISIM for household final consumption expenditure on loans indicator series is used to derive the quarterly series by applying a benchmarking process to the annual series for household final consumption expenditure FISIM on loans).

 

Unincorporated enterprises interest payable is calculated as:

  Bank interest receivable on unincorporated enterprises loans
plus
other depository corporations interest receivable on unincorporated enterprises loans
equals
interest payable by unincorporated enterprises indicator
equals
interest payable by unincorporated enterprises before adjusting for FISIM (the interest payable by unincorporated enterprises indicator series is used to derive the quarterly interest payable by unincorporated enterprises before adjusting for FISIM series by applying a benchmarking process to the annual interest payable by unincorporated enterprises series)
minus
FISIM for intermediate use for unincorporated enterprises (the bank FISIM for intermediate use for unincorporated enterprises indicator series is used to derive the quarterly series by applying a benchmarking process to the annual series for intermediate use unincorporated enterprises FISIM on loans).
Private non-financial corporations
 

Private non-financial corporations interest receivable is calculated as:

  

Bank interest receivable on private non-financial corporations loans and placements
minus
FISIM for intermediate use for private non-financial corporations
plus
Bank interest receivable on private non-financial corporations bills of exchange
plus
interest receivable by Rest of the world (sourced directly from Balance of Payments statistics)
equals
interest payable by private non-financial corporations indicator (the interest payable by private non-financial corporations indicator series is used to derive the quarterly interest payable by private non-financial corporations series by applying a benchmarking process to the annual interest payable by private non-financial corporations series).

 

Private non-financial corporations interest payable is calculated as:

  Bank interest receivable on private non-financial corporations loans and placements
minus
FISIM for intermediate use for private non-financial corporations
plus
Bank interest receivable on private non-financial corporations bills of exchange
plus
interest receivable by Rest of the world (sourced directly from Balance of Payments statistics)
equals
interest payable by private non-financial corporations indicator (the interest payable by private non-financial corporations indicator series is used to derive the quarterly interest payable by private non-financial corporations series by applying a benchmarking process to the annual interest payable by private non-financial corporations series).
Financial corporations
 

Financial corporations interest receivable is calculated as:

  

Bank interest receivable on resident loans and placements
plus
FISIM for intermediate use for financial corporations
equals
interest receivable by financial corporations indicator (the interest receivable by financial corporations indicator series is used to derive the quarterly interest receivable by financial corporations series by applying a benchmarking process to the annual interest receivable by financial corporations series).

 

Financial corporations interest payable is calculated as:

  Bank interest payable on resident currency and deposits
minus
FISIM for intermediate use for financial corporations
equals
interest payable by financial corporations indicator (the interest payable by financial corporations indicator series is used to derive the quarterly interest payable by financial corporations series by applying a benchmarking process to the annual interest payable by financial corporations series).
Rest of the world
 

Quarterly estimates of rest of the world interest series are sourced directly from Balance of Payments Statistics.

There exists a small quarterly imbalance between the rest of the world and the domestic sectors interest flows as they are derived with a number of different data sources. This imbalance is balanced off in financial corporations interest receivable as it is the largest interest series, and where the imbalance has the smallest impact.
Table 13.6 Quarterly primary income - Property Income -Dividends
ItemComment
Public sector

 

 

 

Quarterly dividends series are calculated using a matrix-based approach. There is no quarterly imbalance as quarterly dividends are calculated on a "from-whom-to-whom" basis, and then aggregated to determine total dividends received and paid for each sector.

Quarterly indicators for public sector dividends received and paid series are sourced from Government Finance Statistics. Data are derived from administrative sources such as the Commonwealth Department of Finance, State government financial statements, and quarterly surveys of local government authorities and public non-financial corporations. Public financial corporations are surveyed on an annual basis only.

These quarterly estimates are used as indicators to produce dividend series for general government and public corporations (financial and non-financial) by applying a benchmarking process to the corresponding annual series. They are allocated to their private sector received counterparties based on annual proportions.

Private sector
 Quarterly estimates for private sector dividends paid series are based on dividends paid by banks and private non-financial corporations. Quarterly indicators of dividends paid by banks are sourced from the APRA Quarterly Bank Statement of Financial Performance. Quarterly indicators of dividends paid by private non-financial corporations are sourced from the ASX Top 100 financial reports. These quarterly estimates are used as indicators to produce dividends paid series for financial corporations and private non-financial corporations by applying a benchmarking process to the corresponding annual series. They are allocated to their private sector received counterparties based on annual proportions.
Rest of the world
 Quarterly estimates of Rest of the world dividend received and paid series are sourced directly from Balance of Payments Statistics. They are allocated to their domestic sector counterparties based on annual proportions.
Table 13.7 Quarterly primary income - Property Income - Property income attributed to insurance policyholders
ItemComment
Property income attributed to insurance policyholders
 

Quarterly estimates of property income attributed to insurance policyholders for life insurance corporations, pension funds and non-life insurance corporations are compiled by applying a linear trend formula to the annual estimates.

Quarterly estimates of rest of the world property income attributed to insurance policy holders series are sourced directly from Balance of Payments statistics.

There exists a small quarterly imbalance between the rest of the world and the domestic sectors property income attributed to insurance policyholders flows as they are derived separately. This imbalance is balanced off in financial corporations property income attributed to insurance policyholders payable as it is the largest property income attributed to insurance policyholders series, and where the imbalance has the smallest impact.

Property income attributed to insurance policyholders – imputed interest on unfunded superannuation
 

Quarterly indicators for imputed interest on unfunded superannuation series are sourced from Government Finance Statistics. Data are derived from administrative sources such as the Commonwealth Department of Finance, State government financial statements, and quarterly surveys of local government authorities.

These quarterly estimates are used as indicators to produce imputed interest on unfunded superannuation series for general government and households by applying a benchmarking process to the corresponding annual series.

There is no quarterly imbalance as quarterly imputed interest on unfunded superannuation is calculated on a "from-whom-to-whom" basis.

The two series above are then summed to produce the quarterly series for property income attributed to insurance policyholders.

Table 13.8 Quarterly primary income - Property Income - Reinvested earnings
ItemComment
Reinvested earnings in direct foreign investment and non-resident investment funds

 

Estimates for reinvested earnings for foreign direct investment and non-resident investment funds are sourced from the quarterly Survey of International Investment. The survey provides data on reinvested earnings on direct foreign investment, both payable to non-residents and receivable from non-residents.

For investment funds, direct data and some modelled estimates are used to estimate amounts payable to non-residents and receivable from non-residents.

Reinvested earnings in resident investment funds
 

Balance sheet data from Australian National Accounts:  Finance and Wealth and income and expenditure data from the quarterly Survey of Financial Information, ASX market capitalisation data, superannuation actuarial and annual reports are used to compile reinvested earnings for the following resident investment funds:

  • non-financial investment funds (infrastructure funds; listed and unlisted property trusts);
  • money market financial investment funds (cash common funds and cash management trusts); and
  • non-money market financial investment funds (unlisted mortgage trusts; listed investment companies; wholesale trusts; non-cash common funds and other trusts).

Reported income and expense data are used to derive reinvested earnings for the domestic investment funds as:

     Total income
     less expenses
     less capital gains and losses
     less dividends

The reinvested earnings of the domestic investment funds are then allocated to financial corporations, private non-financial corporations and household reinvested earnings receivable using quarterly sectoral asset holders of the equity issued by the investment funds from the ABS publication, Australian National Accounts:  Finance and Wealth.

There is no quarterly imbalance as quarterly reinvested earnings is calculated on a "from-whom-to-whom" basis.

Table 13.9 Quarterly primary income - Property Income - Rent on natural assets
ItemComment
Rent on natural assets

 

Quarterly indicators for public sector rent on natural assets series are sourced from Government Finance Statistics. Data are derived from administrative sources such as the Commonwealth Department of Finance, State government financial statements, and quarterly surveys of local government authorities and public non-financial corporations. These quarterly estimates are used as indicators to produce rent on natural assets series for general government and public non-financial corporations by applying a benchmarking process to the corresponding annual series.

Quarterly estimates of rent on natural assets received by households are compiled by applying a linear trend formula to the annual household rent estimates.

Rent on natural assets paid by households and private non-financial corporations is derived as a residual using the following calculation:

     Rent on natural assets received by general government
     plus rent on natural assets received by public non-financial corporations
     plus rent on natural assets received by households
     less rent on natural assets paid by public non-financial corporations
     equals rent on natural assets paid by households and private non-financial corporations.

Quarterly rent on natural assets paid by households and private non-financial corporations is then allocated to both sectors based on the annual contribution of rent on natural assets paid by households and private non-financial corporations to the sum of both sectors

There is no quarterly imbalance as quarterly rent on natural assets paid by households and private non-financial corporations is derived as a residual.