10.26 This item is included in HFCE COICOP categories 01-12 (excluding Water, electricity, gas and other fuels) as an adjustment so that total HFCE reflects the expenditure of resident households (in Australia and overseas) only. This adjustment is necessary because a number of the data sources for HFCE come from sales reported by Australian businesses. These sales include the expenditure by overseas visitors (treated as an export) and do not include expenditure of Australian overseas (recorded as an import). Expenditures by overseas visitors on fares, meals, accommodation, entertainment, recreation and other goods and services in Australia are deducted from the appropriate HFCE categories while expenditures by Australian residents abroad are added.
10.27 HFCE net expenditure overseas (NEO) is derived using Services Debits and Credits data obtained from Tables 8 and 9 in Balance of Payments and International Investments Position, Australia
10.28 Calculation of NEO is a two-stage process. The first stage estimates the total value of NEO while the second allocates expenditure to the appropriate HFCE category. The total value of NEO is calculated by offsetting two items against each other; namely, the expenditure of Australian residents abroad (debits) and the expenditure of non-residents in Australia (credits).
10.29 It should be noted that NEO does not include online purchases by Australian households from international websites. These are encompassed in the annual HFCE benchmarks, chiefly through alignment with data obtained from the Household Expenditure Survey (HES).
10.30 The expenditure of residents overseas is calculated as the sum of two items:
- Personal travel debits; and
- Expenditure of Australian Government employees.
10.31 Personal travel debits, as adjusted for national accounting purposes, record the acquisition of goods and services abroad by residents travelling at their own expense, including students. Business travellers are not included as their expenditure is largely intermediate consumption of the employing business. Examples are purchases of accommodation, meals, ground transportation and tours.
10.32 The estimate for personal travel debits is calculated as the sum of two original current price Balance of Payments series: Services Debits - Travel - Personal - Education-related and Services Debits - Travel - Personal - Other services. State/Territory splits are derived using proportions from the ABS publication, Overseas Arrivals and Departures, Australia.
10.33 Expenditure of Australian Government employees records the personal expenditure on goods and services by Australian diplomats and their dependants stationed abroad. It is also based on an original current price Balance of Payments series: an unpublished lower level component of Services Debits – Government goods and services n.i.e. State/Territory estimates are derived using figures on the number of Australian government employees abroad.
10.34 The expenditure of non-residents in Australia is derived by aggregating three items:
- Business travel credits;
- Personal travel credits; and
- Expenditure of foreign government employees.
10.35 Business travel credits cover expenditures on goods and services by seasonal and non-resident workers employed in Australia, and by travellers who visit, for business purposes, on behalf of an enterprise resident in another economy. The Balance of Payments series for Business travel credits is Services Credits – Travel – Business. State/Territory splits are derived using proportions from the ABS publication, Overseas Arrivals and Departures, Australia.
10.36 Personal travel credits record expenditures on goods and services in Australia by non-residents travelling at their own expense, for purposes other than business. The estimate for personal travel credits is calculated as the sum of two original current price Balance of Payments series: Services Credits – Travel – Personal – Education-related and Services Credits – Travel – Personal – Other services. State and Territory estimates are again calculated using proportions from Overseas Arrivals and Departures, Australia.
10.37 Expenditure of foreign government employees records the personal expenditure in Australia on goods and services by foreign diplomats and their dependants stationed in Australia. It is based on the unpublished lower level component of the Balance of Payments series Services Credits – Government goods and services i.e. State/Territory estimates of the expenditure of foreign government employees in Australia are derived using information on the number of foreign diplomats.
10.38 Total NEO is calculated by subtracting the expenditure of non-residents in Australia from the expenditure of Australia residents overseas. This is then allocated to various categories of HFCE using information from the International Visitor Survey, published by Tourism Research Australia. Data on expenditure from this survey is used to derive weights for the HFCE categories, which are then applied to the total NEO estimate. The exception is NEO for HFCE rent which is allocated solely to actual rent.
10.39 Quarterly and annual estimates of total NEO in current price terms are published as a memorandum item in Australian National Accounts: National Income, Expenditure and Product and Australian System of National Accounts.