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Household income account

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

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

21.182    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.

21.183    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 calculated, rather than net saving as in the national accounts.

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

Table 21.55 Household income account – By components
ItemComment
Primary income receivable
 Compensation of employees

 

 

State household COE estimates are split using the top-down approach using state estimates of COE from the gross state product account. The Australia-level household COE is COE adjusted for labour income to and from overseas. There is no adjustment for interstate workers with assumption being that employees work in their state of residence.

 Gross mixed income

 

 

Estimates of GMI by state are compiled from agriculture and non-agriculture components.

State estimates of agricultural unincorporated enterprises are split using the top-down approach using agricultural production by state. The assumption is made that the high concentration of unincorporated enterprises in agriculture observed at the national level is consistent across all states.

GMI of non-agricultural unincorporated enterprises is split to state using the proportions of business income of unincorporated enterprises (i.e. individuals, partnerships and trusts) from Taxation Statistics, as well as business income data from Household Income and Wealth, Australia.

 Dwelling owned by household - Gross operating surplus

 

 

State estimates are split using the top-down approach using GOS dwellings by state produced for the production account. The Australia-level dwelling owned by household GOS is total dwellings GOS adjusted for dwellings owned by other sectors of the economy. The assumption is made that ownership of dwellings for sectors other than households occurs in the same proportion in all states.

 Property income

 

 

Property income is sourced from state interest and dividends data from the ATO taxation statistics publications.

Secondary income receivable
 Social assistance benefits

 

 

Social assistance benefits include benefits received from government, and is sourced from Government Finance Statistics. Commonwealth data is allocated to states using estimates from the ABS publication, Household Income and Wealth, Australia for total government pensions and allowances.

 Workers' compensation claims

 

 

State estimates are split using the top-down approach using state workers' compensation premiums data used to compile state COE estimates. This assumes that claims are paid in the same proportion as premiums across states.

 Non-life insurance claims

 

 

State estimates are split using the top-down approach using estimated resident population. Some adjustment is undertaken for large natural events such as cyclones and floods.

 Current transfers to non-profit institutions (NPIs)

 

 

Consistent with the national accounts, the NPISH sector is included as part of the household sector. Data for current transfers is sourced from Government Finance Statistics, and allocated to states using estimated resident population.

 Other transfers receivable

 

 

This is split between transfers made by immigrants to Australia and remaining miscellaneous transfers.

Immigrant transfers are split using the top-down approach to states using state overseas arrivals data from the ABS publication, National, state and territory population. Remaining transfers receivable are split using the top-down approach using ERP data.

Total gross income

 

 

Total gross income = primary income receivable

   + secondary income receivable.

Primary income payable
 Dwellings interest payable

 

 

Dwellings interest is split using the top-down approach to states using a cumulative aggregation of new loan commitments over a fifteen-year period from Housing Finance, Australia. A cumulative aggregation is compiled due to the long life span of dwelling loans.

 Consumer debt interest payable

 

 

State consumer debt interest is split using the top-down approach using fixed loans and revolving credit data directly from the ABS publication, Lending Finance, Australia.

 Unincorporated enterprises payable

 

 

State unincorporated interest payable is split using the top-down approach using business interest paid components from ATO taxation statistics.

Secondary income payable
 Income tax payable

 

 

Income tax payable is split to states based on the top-down approach, using income tax by state data. This is received with a two-year lag. A combination of state COE and state GMI estimates are used to estimate state splits for the latest two years.

 Other current taxes on income, wealth, etc.

 

 

Other current taxes on income, wealth, etc. are split to states using the top-down approach using income tax by state data from ATO taxation statistics and GFS data.

 Workers' compensation premiums

 

 

State estimates are split using the top-down approach using state premiums data used to compile state COE estimates.

 Net non-life insurance premium payments

 

 

State estimates are split using the top-down approach using ERP estimates. Some adjustment is undertaken for large natural events such as cyclones and floods.

 Other current transfers payable

 

 

This comprises transfers to migrants leaving Australia as well as current transfers to other sectors i.e. miscellaneous current transfers such as fines and pensions paid to non-residents. Migrant transfers are split using departures data from National, state and territory population.

Miscellaneous current transfers are allocated to states using ERP estimates.

Total income payable

 

 

Total income payable = primary income payable

      + secondary income payable

Gross disposable income

 

 

Gross disposable income = total income receivable

            – total income payable

Household gross saving

 

 

Household gross saving = gross disposable income

          – household final consumption expenditure

This is equivalent to net saving plus consumption of fixed capital as published in the national accounts, since consumption of fixed capital is not separately allocated by state.