Expenses (ETF 12)

A1A.39.

Expenses (ETF 12) consists of all decreases in net worth resulting from transactions. Expense transactions have counterpart entries either in a decrease in assets or an increase in liabilities, decreasing net worth. Refunds, recoveries of overpayments, receivables on erroneous payments and similar transactions are transactions that are classified as a reduction in expense with a corresponding reduction in liabilities or an increase in financial assets, and as such, increase net worth. This category is further classified into:

• superannuation expenses (ETF 121);
• other employee expenses (ETF 122);
• non-employee expenses (ETF 123);
• depreciation (ETF 124);
• current transfer expenses (ETF 125);
• capital transfer expenses (ETF 126);
• interest expenses (ETF 127); and
• other property expenses (ETF 128).

A1A.40.

Superannuation expenses (ETF 121) consists of accrued and imputed expenses under both defined contribution and defined benefit superannuation schemes in return for services provided by employees in the current period. A defined contribution superannuation scheme is one where the benefits payable to the employee on retirement are determined by the funds that have accumulated from employer and employee contributions over the working life of the employee, together with income and capital gains/losses arising from the investment of the accumulated funds. The funds are accumulated in a separate superannuation fund managed by a board of trustees or guardians of the scheme (autonomous fund). The general government employer has a responsibility to make the regular agreed contributions to the fund, but then has no further superannuation liability towards their employees. A defined benefit superannuation scheme is one where the benefits payable to the employee on retirement are defined by some formula normally related to participants’ length of service and salary. This category is further classified into:

• superannuation expenses – defined contribution scheme (ETF 1211, COFOG-A, SDC);
• superannuation expenses – defined benefit scheme (ETF 1212, COFOG-A, SDC); and
• imputed employers’ contribution – defined benefit scheme (ETF 1213, COFOG-A, SDC).

A1A.41

Superannuation expenses - defined contribution scheme (ETF 1211, COFOG-A, SDC) consists of the amounts payable by employers to defined contribution superannuation schemes for the benefit of their employees.

A1A.42.

Superannuation expenses - defined benefit scheme (ETF 1212, COFOG-A, SDC) consists of the amounts payable by employers to defined benefit superannuation schemes for the benefit of their employees.

A1A.43

Imputed employers' contributions - defined benefit scheme (ETF 1213, COFOG-A, SDC) consists of the amount of employer contributions to defined benefit superannuation schemes that would be needed to secure the de-facto entitlements to the benefits accumulated by their employees. Some employers provide benefits directly to their employees, former employees or their dependants from their own resources without involving an autonomous superannuation fund and without creating a special fund or segregated reserve for the purpose. This category is generally unused as superannuation is compulsory in Australia.

A1A.44.

Other employee expenses (ETF 122) consists of all employee expenses other than superannuation contributions, in cash or in kind, payable to an individual in an employer / employee relationship in return for work performed by the latter during the reporting period. This category is further classified into:

• wages, salaries and supplements in cash (ETF 1221, COFOG-A, SDC);
• wages and salaries in kind (ETF 1222, COFOG-A, SDC);
• Fringe Benefits Tax (FBT) expenses (ETF 1223, COFOG-A, SDC);
• workers’ compensation expenses (ETF 1224, COFOG-A, SDC); and
• other employee expenses not elsewhere classified (ETF 1229, COFOG-A, SDC).

A1A.45

Wages, salaries and supplements in cash (ETF 1221, COFOG-A, SDC) consists of compensation of employees payable in cash, or any other financial instruments used as means of payments, in return for work performed.

Includes:    Basic wages or salaries payable at regular weekly, monthly or other intervals, including payments by results and piecework payments; enhanced payments or special allowances for working overtime, at nights, on weekends or other irregular hours; allowances for working away from home or in disagreeable or hazardous circumstances; expatriation allowances for working abroad; supplementary allowances payable regularly such as housing allowances or allowances to cover the costs of travel to and from work; wages or salaries payable to employees away from work for short periods such as on vacation or as a result of a temporary halt to production; annual supplementary pay such as bonuses; ad hoc bonuses or other exceptional payments linked to the overall performance of the enterprise made under incentive schemes; commission, gratuities and tips received by employees; amounts withheld from wages and salaries by the employer for administrative convenience or for other reasons such as income taxes or other deductibles, payable by the employee; employee benefits, such as a car or extra pension contributions, that is acquired from the employer by foregoing some salary.

Excludes:   Wages and salaries connected with own account capital formation (classified to own-account capital formation (ETF 4113, TALC, COFOG-A), and also classified to either own-account wages, salaries and supplements in cash (ETF 7621, TALC, COFOG-A) or own-account wages and salaries in kind (ETF 7622, TALC, COFOG-A)); reimbursement by the employer of costs incurred by its employees in order to enable them to take up their jobs or to carry out their work such as reimbursement of travel, relocation or related expenses made by employees when they take up new jobs or are required by their employers to move their homes to different parts of the country or to another country and reimbursement of costs incurred by employees on tools, equipment, special clothing or other items that are needed exclusively or primarily to enable them to carry out their work (classified to use of goods and services (ETF 1233, COFOG-A, SDC)); usage of labour hire agencies (classified to use of goods and services (ETF 1233, COFOG-A, SDC)).

A1A.46

Wages and salaries in kind (ETF 1222, COFOG-A, SDC) consists of compensation of employees payable in the form of goods, services, interest foregone and shares issued to employees in return for work performed. Almost any kind of goods or services may be provided as wages and salaries in kind. It includes goods and services provided without charge or at reduced prices. The goods and services provided in kind to employees are not necessary to enable the employees to perform their work.

Includes:    Meals and drinks provided on a regular basis including any subsidy element of an office canteen; clothing or footwear that employees may choose to wear frequently outside of the workplace and while at work; housing services or accommodation of a type that can be used by all members of the household to which the employee belongs; services of vehicles or other durables provided for the personal use of employees; goods and services produced by the employer such as free travel on government airplanes or trains; sports, recreation or holiday facilities for employees and their families; transportation to and from work; free or subsidised parking when it would otherwise have to be paid for; childcare for the children of employees; the value of the interest foregone by employers when they provide loans to employees at reduced or even zero rates of interest for purposes of buying houses, vehicles, furniture or other goods or services; bonus shares or stock options distributed to employees.

Excludes:   Wages and salaries in kind connected with own account capital formation (classified to own-account capital formation (ETF 4113, TALC, COFOG-A ), and also classified to own-account wages and salaries in kind (ETF 7622, TALC, COFOG-A)).

A1A.47.

Fringe Benefits Tax (FBT) expenses (ETF 1223, COFOG-A, SDC) consists of fringe benefits tax payable on certain benefits employers provide to their employees or their employees’ associates in place of salary or wages.

A1A.48.

Workers’ compensation expenses (ETF 1224, COFOG-A, SDC) consists of workers’ compensation amounts payable by employers under legislation for work-related injury and illness suffered by employees.

A1A.49.

Other employee expenses not elsewhere classified (ETF 1229, COFOG-A, SDC) consists of employee expenses that cannot be classified to superannuation expenses – defined contribution scheme (ETF 1211, COFOG-A, SDC), superannuation expenses - defined benefit scheme (ETF 1212, COFOG-A, SDC), imputed employers’ contributions – defined benefit scheme (ETF 1213, COFOG-A, SDC), wages, salaries and supplements in cash (ETF 1221, COFOG-A, SDC), wages and salaries in kind (ETF 1222, COFOG-A, SDC), Fringe Benefits Tax (FBT) expenses (ETF 1223, COFOG-A, SDC) or workers’ compensation expenses (ETF 1224, COFOG-A, SDC).

Includes:    Accrued expenses for the current period relating to accident compensation premium, sick leave, annual leave, long service leave retirement and redundancy.

A1A.50.

Non-employee expenses (ETF 123) consists of operating expenses that are not related to the compensation of employees. This category is further classified into:

• production tax expenses (ETF 1231, COFOG-A, TC, SDC);
• social benefits to households in goods and services (ETF 1232, COFOG-A, SDC);
• use of goods and services (ETF 1233, COFOG-A, SDC); and
• non-employee expenses not elsewhere classified (ETF 1239, COFOG-A, SDC).

A1A.51.

Production tax expenses (ETF 1231, COFOG-A, TC, SDC) consists of taxes on production or indirect tax expenses.

A1A.512

Social benefits to households in goods and services (ETF 1232, COFOG-A, SDC) consists of expenditure by government on goods and services produced by market producers that are provided directly to households as social transfers in kind.

Includes:    Medical and pharmaceutical benefits; telephone rental concessions; concessional railway fares; rental subsidies; reduced utility charges.

A1A.53.

Use of goods and services (ETF 1233, COFOG-A, SDC) consists of the value of goods and services used for the production of market and non-market goods and services.

Includes:   Amounts payable to contractors, self-employed outworkers and other workers who are not employees of general government or public sector units; use of goods and services when such use is mandatory in order to enable employees to carry out their work whether purchased by the employer or purchased by employees who are then subsequently reimbursed by the employer; tools or equipment used exclusively or mainly at work whether purchased by the employer or purchased by employees who are then subsequently reimbursed by the employer; clothing or footwear of a kind that ordinary consumers do not choose to purchase or wear and which are worn exclusively or mainly at work such as protective clothing, overalls or uniforms whether purchased by the employer or purchased by employees who are then subsequently reimbursed by the employer; accommodation services at the place of work of a kind that cannot be used by the households to which the employees belong such as barracks, cabins, dormitories and huts; special meals or drinks necessitated by exceptional working conditions, while travelling for business reasons or meals or drinks provided to employees while on active duty whether purchased by the employer or purchased by employees who are then subsequently reimbursed by the employer; travel, relocation or related expenses when employees take up new jobs or are required by their employers to move their homes to different parts of the country or to another country whether purchased by the employer or purchased by employees who are then subsequently reimbursed by the employer; changing facilities, washrooms, showers and baths necessitated by the nature of the work; first aid facilities, medical examinations or other health checks required because of the nature of the work; goods and services used by a donor government unit to produce non-market goods and services consumed by other governments and international organisations; goods and services acquired so that government employees can conduct relief operations in a foreign country after a natural disaster; all goods and services consumed by a general government unit to produce non-market goods and services that are distributed as social benefits in kind or distributed to households in particular circumstances such as following a natural disaster; memberships dues and subscription fees such as payments by public corporations of membership dues or subscriptions to market non-profit institutions serving businesses such as chambers of commerce or trade associations; costs incurred on inexpensive, durable goods such as small/hand tools (saws, spades, knives, axes, hammers, screwdrivers, spanners, wrenches) when such expenses are incurred regularly and are small compared with the costs incurred for the acquisition of machinery and equipment; goods and services consumed for the ordinary maintenance and repair of fixed produced assets; goods and services used in research and development where it is clear that the activity does not create any future economic benefit for its owner; materials to produce coins or notes of the national currency or amounts payable to contractors to produce the currency; single-use weapons such as ammunition, missiles, rockets, bombs or torpedoes once used; payments by the lessee for rental of a fixed asset under an operating lease; and explicit fees for financial services.

Excludes:   Depreciation (classified to depreciation of fixed produced assets (non defence) (ETF 1241) or depreciation of fixed produced assets (defence) (ETF 1242, TALC, COFOG-A)); the use of goods and services in own account capital formation (classified to own-account capital formation (ETF 4113, TALC, COFOG-A) and also classified to own-account use of goods and services (ETF 7631)); goods purchased by government and distributed without transformation (classified to social benefits to households in goods and services (ETF 1232, COFOG-A, SDC), subsidies on products (ETF 1252, COFOG-A, SDC), current grant expenses (ETF 1251, COFOG-A, SDC), or current transfer expenses not elsewhere classified (ETF 1259, COFOG-A, SDC)); goods and services not produced by the donor government unit but are distributed as social benefits in kind or distributed to households in particular circumstances (classified to social benefits to households in goods and services (ETF 1232, COFOG-A, SDC)); memberships dues and subscription fees payable to international organisations when there is a possibility, even if unlikely, of repayment of the full amount (classified to transactions in financial assets (net) (ETF 3111), equity including contributed capital (TALC 424), SDC)); unrequited membership dues and subscription fees payable to international organisations, foreign governments or other general government units (classified to current grant expenses (ETF 1251, COFOG-A, SDC) or current transfers not elsewhere classified (ETF 1259, COFOG-A, SDC)); goods and services acquired to increase inventories of materials and supplies, work in progress, finished goods and goods for resale (classified to change in inventories (ETF 4111, inventories ( TALC 21), COFOG-A)); expenditure on new military equipment, including large military weapons systems and armoured vehicles acquired by the police and internal security services (classified to acquisitions of new non-financial assets (ETF 4114, TALC, COFOG-A, SDC), weapons systems (TALC 151), COFOG-A); single-use weapons such as ammunition, missiles, rockets, bombs or torpedoes until used (classified to change in inventories (ETF 4111), military inventories (TALC 215), COFOG-A); amounts payable for the use of non-produced naturally occurring assets such as land (classified to land rent and royalty expenses ( ETF 1283, COFOG-A, SDC)).

A1A.54

Non-employee expenses not elsewhere classified (ETF 1239, COFOG-A, SDC) consists of non-employee expenses that cannot be classified to production tax expenses (ETF 1231, COFOG-A, TC, SDC), social benefits to households in goods and services (ETF 1232, COFOG-A, SDC) or use of goods and services (ETF 1233, COFOG-A, SDC).

A1A.55.

Depreciation (ETF 124) consists of expenses relating to the accounting process where the costs of assets are written off over their useful life. Depreciation usually relates to non-current tangible assets which are written off because they wear out or become obsolete. This category is further classified into:

• depreciation of fixed produced assets (non-defence) (ETF 1241, TALC, COFOG-A); and
• depreciation of fixed produced assets (defence) (ETF 1242, TALC, COFOG-A).

A1A.56.

Depreciation of fixed produced assets (non-defence) (ETF 1241, TALC, COFOG-A) consists of amounts charged to current operations in respect of the consumption of non-current tangible produced assets not related to defence weapons systems.

A1A.57.

Depreciation of fixed produced assets (defence) (ETF 1242, TALC, COFOG-A) consists of amounts charged to current operations in respect of the consumption of non-current tangible produced assets related to defence weapons systems.

A1A.58.

Current transfer expenses (ETF 125) consists of regular transfer payments that are current in nature and where no economic benefits are received in return for payment. This category is further classified into:

• current grant expenses (ETF 1251, COFOG-A, SDC);
• subsidies on products (ETF 1252, COFOG-A, SDC);
• other subsidies on production (ETF 1253, COFOG-A, SDC);
• current monetary transfers to households (ETF 1254, COFOG-A, SDC);
• tax expenses (ETF 1255, COFOG-A, TC, SDC);
• premiums, fees and current claims related to non-life insurance and standardised guarantee schemes (ETF 1256, COFOG-A, SDC); and
• current transfer expenses not elsewhere classified (ETF 1259, COFOG-A, SDC).

A1A.59.

Current grant expenses (ETF 1251, COFOG-A, SDC) consists of current transfers payable by government units to other resident or non-resident government units, international organisations, public enterprises, non-profit institutions serving business and others that do not meet the definition of a tax, subsidy or social contribution. Grants are normally payable in cash, but may also take the form of provision of goods or services in kind.

Includes:    Grants in kind of goods and services that are consumed such as food contributions, blankets, medical and rescue services and supplies; grants for current purposes to private non-profit organisations serving households including grants to hospitals, independent schools, religious and charitable organisations; grants made to foreign governments and international organisations including grants made for aid projects; current grants from one level of government to another; current grants between units within the same level of government; any grants which are not specifically defined as capital grants, current grants to public enterprises and non-profit institutions serving business.

A1A.60

Subsidies on products (ETF 1252, COFOG-A, SDC) consists of current unrequited transfers that government units make to enterprises on the basis of the level of their production activities or the quantities or values of the goods or services they produce, sell, export or import. A subsidy on a product usually becomes payable when the good or service is produced, sold, exported or imported, but it may also be payable in other circumstances such as when a good is transferred, leased, delivered or used for own consumption or own-account capital formation. Subsidies are payable to producers only, not to final consumers.

Includes:    Direct foreign trade subsidies such as subsidies on imported or exported goods and services that become payable when the goods cross the frontier of the economic territory or when the services are delivered to resident institutional units (import subsidies) or to non-resident units (export subsidies); implicit subsidies resulting from the operation of an official system of multiple exchange rates or resulting from payable tax credits; losses of government trading organisations whose function is to buy products and then sell them at lower prices to residents or non-residents, when they are incurred as a matter of deliberate government economic or social policy; subsidies payable to resident producers in respect of their production that is used or consumed within the economic territory; regular transfers paid to corporations and quasi-corporations that are intended to compensate for recurrent losses incurred on their productive activities as a result of charging prices that are lower than their average costs of production as a matter of deliberate government economic and social policy; and subsidies resulting from the central bank accepting interest rates lower than prevailing market rates.

A1A.61.

Other subsidies on production (ETF 1253, COFOG-A, SDC) consists of current unrequited transfers that government units make to enterprises as a consequence of engaging in production but that are not related to specific products.

Includes:    Subsidies on payroll or workforce which are payable on the total wage or salary bill, the size of the total workforce or the employment of particular types of persons such as physically handicapped persons or persons who have been unemployed for long periods; subsidies to reduce pollution which are transfers intended to cover some or all of the costs of additional processing undertaken to reduce or eliminate the discharge of pollutants into the environment.

Excludes:   Payment of interest or other debt service cost on behalf of other producer units without acquiring an effective claim on the original debtor (classified to capital grant expenses (ETF 1261, COFOG-A, SDC) or capital transfer expenses not elsewhere classified (ETF 1269, COFOG-A, SDC)); transfers made by government to other resident or non-resident units to finance all or part of the costs of their acquiring non-financial assets (classified to capital grant expenses (ETF 1261, COFOG-A, SDC) or capital transfer expenses not elsewhere classified ( ETF 1269, COFOG-A, SDC)); extraordinary payments into social insurance funds insofar as these payments are designed to increase the actuarial reserves of these funds (classified to capital grant expenses (ETF 1261, COFOG-A, SDC ) or capital transfer expenses not elsewhere classified (ETF 1269, COFOG-A, SDC )); transfers made by general government units to corporations and quasi-corporations to cover large operating deficits accumulated over two or more years or exceptional losses due to factors outside the control of the enterprise (classified to capital transfer expenses not elsewhere classified (ETF 1269, COFOG-A, SDC )); the cancellation of debts which institutional units have incurred to government units, such as debt resulting from loans advanced by a government unit to a non-financial enterprise that does not have the ability to make repayments due to trading losses accumulated over several financial years (classified to capital grant expenses (ETF 1261, COFOG-A, SDC) or capital transfer expenses not elsewhere classified (ETF 1269, COFOG-A, SDC)); payments made by general government for damage to, or losses of, capital goods as a result of acts of war, other political events or national disasters (classified to capital grant expenses (ETF 1261, COFOG-A, SDC) or capital transfer expenses not elsewhere classified (ETF 1269, COFOG-A, SDC)); transfers to households but intended to supplement household income or defray household expense (classified to current monetary transfers to households (ETF 1254, COFOG-A, SDC)); transfers made by a general government unit that has assumed responsibility for pension claims on public enterprises (classified to capital transfer expenses not elsewhere classified (ETF 1269, COFOG-A, SDC)); payments made by general government to market producers to pay entirely, or in part, for goods and services that those market producers provide directly and individually to households in the context of social risks or needs and to which the households have a right (classified to current monetary transfers to households (ETF 1254, COFOG-A, SDC)).

A1A.62.

Current monetary transfers to households (ETF 1254, COFOG-A, SDC) consists of current transfers receivable by households intended to provide for the needs that arise from social risks such as sickness, unemployment, retirement, housing, education or family circumstances. These benefits are payable in cash or in kind to protect the entire population or specific segments of it against certain social risks.

Includes:    Provision of medical services, old age pensions; unemployment compensation; work for the dole schemes; personal benefit payments to Australian citizens resident overseas; payable tax credits paid to households intended to provide for the needs that arise from certain events or circumstances.

Excludes:   transfers made in response to events or circumstances such as natural disasters (classified to current transfer expenses not elsewhere classified (ETF 1259, COFOG-A, SDC)).

A1A.63.

Tax expenses (ETF 1255, COFOG-A, TC, SDC) consists of direct tax expenses of public enterprises.

Includes:    All tax expenses of general government units such as state / territory government payroll taxes and Commonwealth Government fringe benefits tax.

Excludes:   Indirect tax expenses (taxes on production) of public enterprises (classified to production tax expenses (ETF 1231, COFOG-A, TC, SDC)).

A1A.64.

Premiums, fees and current claims related to non-life insurance and standardised guarantee schemes (ETF 1256, COFOG-A, SDC) consists of non-life insurance premiums and fees payable to secure entitlement to insurance against risk; non-exceptional claims payable by insurance schemes to beneficiaries; and fees payable to obtain standardised guarantees.

Excludes:   Exceptionally large insurance settlements payable in the wake of a catastrophic event or disaster (classified to capital claims related to non-life insurance and standardised guarantee schemes (ETF 1263, COFOG-A, SDC).

A1A.65.

Current transfer expenses not elsewhere classified (ETF 1259, COFOG-A, SDC) consists of current transfer expenses that cannot be classified to current grant expenses (ETF 1251, COFOG-A, SDC), subsidies on products (ETF 1252, COFOG-A, SDC),other subsidies on production (ETF 1253, COFOG-A, SDC), current monetary transfers to households (ETF 1254, COFOG-A, SDC), tax expenses (ETF 1255, COFOG-A, TC, SDC) or premiums, fees and current claims related to non-life insurance and standardised guarantee schemes (ETF 1256, COFOG-A, SDC).

Includes:    Current transfers to non-profit institutions in the form of membership dues, subscription and voluntary donations whether made on a regular or occasional basis; transfers in kind such as food, clothing, blankets and medicines to charities for distribution to households; current taxes, compulsory fees and fines imposed by one unit of general government or public corporation on another government unit or public corporation; payable tax credits; fines and penalties imposed by courts of law or quasi-judicial bodies; payments of compensation for injury to persons or damage to property caused by general government or public sector units excluding payments of non-life insurance claims; purchase of goods and services from market producers that are distributed directly to households for final consumption other than social benefits; levies paid to fire boards and town planning authorities; levies paid to county councils by constituent municipal and shire councils.

A1A.66.

Capital transfer expenses (ETF 126) consists of unrequited payments of a capital nature, that are usually non-recurrent and irregular for donor or recipient. This category is further classified into:

• capital grant expenses (ETF 1261, COFOG-A, SDC);
• assets donated (ETF 1262, TALC, COFOG-A);
• capital claims related to non-life insurance and standardised guarantee schemes (ETF 1263, COFOG-A, SDC); and
• other capital transfer expenses not elsewhere classified (ETF 1269, COFOG-A, SDC).

A1A.67.

Capital grant expenses (ETF 1261, COFOG-A, SDC) consists of capital transfers payable by government units to other resident or non-resident government units or international organisations that do not meet the definition of a tax, subsidy or social contribution. Grants are normally payable in cash, but may also take the form of provision of goods or services in kind.

Includes:    Unrequited payments by government to finance the acquisition of non-financial assets by the recipient, to compensate the recipient for damage or destruction of non-financial assets or to increase the financial capital of the recipient; grants to private enterprises, individuals and private non-profit institutions to contribute towards the cost of capital expenditure; compensation to primary industry marketing authorities for losses on overseas debts resulting from devaluations; home savings grants; grants towards science laboratories and libraries in private schools and university residential colleges; grants made by public authorities to other public authorities to contribute towards the cost of capital development; grants between different levels of government; grants within one level of government.

A1A.68.

Assets donated (ETF 1262, TALC, COFOG-A, SDC) consists of donated assets which are included in GFS by imputation of equivalent transactions when they are of an economic nature and where valuations are realistically obtainable.

A1A.69.

Capital claims related to non-life insurance and standardised guarantee schemes (ETF 1263, COFOG-A, SDC) consists of exceptionally large insurance settlements payable in the wake of a catastrophic event or disaster.

Excludes: Current claims payable related to non-life insurance schemes (classified to premiums, fees and claims payable related to non-life insurance and standardised guarantee schemes (ETF 1256, COFOG-A, SDC)).

A1A.70.

Capital transfer expenses not elsewhere classified (ETF 1269, COFOG-A, SDC) consists of capital transfer expenses that cannot be classified to capital grant expenses (ETF 1261, COFOG-A, SDC), assets donated (ETF 1262, TALC, COFOG-A) or capital claims related to non-life insurance and standardised guarantee schemes (ETF 1263, COFOG-A, SDC).

Includes:   Capital taxes imposed by one unit of general government on another government unit or public corporations; major non-recurrent exceptional payments in compensation for extensive damages or serious injuries such as those arising from catastrophes not covered by insurance policies; capital transfers to corporations, quasi-corporations, non-profit institutions serving households, households and non-residents in cash or in kind to cancel or assume a debt by mutual agreement with the debtor without acquiring an effective financial claim on the original debtor; transfers payable to corporations and quasi-corporations to cover large operating deficits accumulated over two or more years; payment of interest or other debt service costs on behalf of other producer units without acquiring an effective claim on the original debtor; amounts payable in excess of the value of liabilities for the provision of pension entitlements assumed by other units; bad debts written off by mutual agreement between debtor and creditor.

A1A.71.

Interest expenses (ETF 127) consists of investment income that is receivable by the owners of certain kinds of financial assets such as Special Drawing Rights (SDRs), deposits, debt securities, loans and other accounts receivable, for putting these financial and other resources at the disposal of another institutional unit. This category is further classified into:

• interest on defined benefit superannuation (ETF 1271, COFOG-A, SDC); and
• interest expenses not elsewhere classified (ETF 1279, COFOG-A, SDC).

A1A.72.

Interest on defined benefit superannuation (ETF 1271, COFOG-A, SDC) consists of the interest accrued on defined benefit superannuation liabilities during the reporting period.

A1A.73.

Interest expenses not elsewhere classified (ETF 1279, COFOG-A, SDC) consists of requited transfer payments made to the owners of certain kinds of financial assets, such as SDRs, deposits, debt securities, loans and accounts receivable, in return for putting the financial assets at the disposal of the reporting institutional unit. The liabilities giving rise to interest expense are all claims of creditors upon debtors.

Includes:   Interest payable on overdue taxes where it is possible to separate payments of interest from the taxes to which they relate; interest on advances, overdrafts, bonds and bills; interest component of finance leases; accrued or accumulated interest that is added to a loan principal instead of being expensed in the current period

Excludes:   Interest on defined benefit superannuation (classified to interest on defined benefit superannuation (ETF 1271, COFOG-A, SDC)); net settlement payments under a swap or forward rate agreement contract (classified to transactions in financial assets (net) (ETF 3111, financial derivatives (TALC 422 ) or (TALC 522), SDC; interest payable on overdue taxes where it is not possible to separate payments of interest from the taxes to which they relate (classified to the relevant category under taxation revenue (ETF 111)).

A1A.74.

Other property expenses (ETF 128) consists of the expenses payable, other than interest, to the owners of financial assets or natural resources when they put them at the disposal of another unit. This category is further classified into:

• income transferred by public corporations as dividends (including tax equivalents) (ETF 1281, COFOG-A, SDC);
• withdrawal from income of quasi-corporations (ETF 1282, COFOG-A, SDC);
• land rent and royalty expenses (ETF 1283, COFOG-A, SDC);
• dividends to shareholders (ETF 1284, COFOG-A, SDC);
• reinvested earnings on foreign direct investment (ETF 1285, COFOG-A, SDC);
• property expense for investment income disbursements (ETF 1286, COFOG-A, SDC); and
• other property expenses not elsewhere classified (ETF 1289, COFOG-A, SDC).

A1A.75.

Income transferred by public corporations as dividends (including tax equivalents) (ETF 1281, COFOG-A, SDC) consists of the distributed earnings allocated to government or public sector units, as the owners of equity, for placing funds at the disposal of corporations. It includes all distributions of profits by public corporations to their shareholders or owners, except for distributions by fiscal, export or import monopolies.

Includes:    Income transferred by public corporations as income tax equivalents; income transferred by public corporations as wholesale sales tax equivalents.

Excludes:   Dividends paid to private sector shareholders (classified to dividends to shareholders (ETF 1284, COFOG-A, SDC)).

A1A.76.

Withdrawal from income of quasi-corporations (ETF 1282, COFOG-A, SDC) consists of that part of distributable income that the owner withdraws from the quasi-corporation.

Excludes:   Withdrawals of funds realised by the sale or other disposal of the quasi-corporation’s assets such as inventories, fixed produced assets, land or other non-produced assets (classified to transactions in financial assets (net) (ETF 3111), equity including contributed capital (TALC 424), SDC); funds withdrawn by liquidating large amounts of accumulated retained earnings or other reserves of the quasi-corporation (classified to transactions in financial assets (net) (ETF 3111), equity including contributed capital (TALC 424), SDC).

A1A.77.

Land rent and royalty expenses (ETF 1283, COFOG-A, SDC) consists of the expense payable to the owners 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.

Includes:    Resource leases on land, subsoil resources and on other natural resources.

A1A.78.

Dividends to shareholders (ETF 1284, COFOG-A, SDC) consists of that part of the income of public sector units which is transferred to private sector shareholders as dividends.

Excludes:   Dividends paid to parent governments or parent public sector units (classified to income transferred by public corporations as dividends (including tax equivalents) (ETF 1281, COFOG-A, SDC)).

A1A.79.

Reinvested earnings on foreign direct investment (ETF 1285, COFOG-A, SDC) consists of the direct investor’s share of the retained earnings of the direct investment enterprise. It is a requirement that the retained earnings of a foreign direct investment enterprise be recorded as if they were distributed and remitted to foreign direct investors in proportion to their ownership of the equity in the enterprise and then reinvested by them by means of additions to equity.

A1A.80.

Property expense for investment income disbursements (ETF 1286, COFOG-A, SDC) consists of property income attributed to insurance policy holders, superannuation entitlements and holders of investment fund shares.

A1A.81.

Other property expenses not elsewhere classified (ETF 1289, COFOG-A, SDC) consists of other property expenses that cannot be classified to income transferred by public corporations as dividends (including tax equivalents) (ETF 1281, COFOG-A, SDC), withdrawal from income of quasi-corporations (ETF 1282, COFOG-A, SDC), land rent and royalty expenses (ETF 1283, COFOG-A, SDC), dividends to shareholders (ETF 1284, COFOG-A, SDC), reinvested earnings on foreign direct investment (ETF 1285, COFOG-A, SDC) or property expense for investment income disbursements (ETF 1286, COFOG-A, SDC).