Known components of GSP(E)
21.136 Current price and volume known components of GSP(E) are aggregated as the sum of state final demand, net international merchandise trade in goods and net trade in services.
| Gross State Product – Expenditure Approach | = | Household final consumption expenditure |
| + | Government final consumption expenditure | |
| + | Gross fixed capital formation | |
| = | State final demand | |
| + | International exports of goods and services | |
| - | International imports of goods and services |
21.137 Four adjustments are made to known components of GSP(E) to produce adjusted known components of GSP(E):
21.138 These adjustments are calculated as follows:
| Adjustments to known components of GSP(E) | = | Net BoP basis reconciliation to international merchandise goods trade (exports - imports) |
| + | Modelled net interstate trade in goods | |
| + | Modelled interstate re-exports/imports | |
| - | Net HFCE interstate |
21.139 Sources and methods for calculating these components are described below. None of these items are published directly due to quality and confidentiality concerns with the data. Despite these concerns, removing these adjustments would adversely affect the quality of the GSP(I/E) price deflator. Calculation of the GSP(I/E) deflator is the main reason why these adjustments to known components of GSP(E) are applied.
Net interstate expenditure adjustment
21.140 A net interstate expenditure adjustment is made to household spending to ensure that HFCE is representative of state resident household consumption. This adjustment is offset as part adjustments to known GSP(E) item as net interstate expenditure is representative of interstate trade, and hence should be reflected in the GSP(I/E) price deflator.
21.141 This treatment is similar to that in the national accounts, where consumption by international visitors is not included as part of HFCE. The value of this is then added to GSP as part of exports of services.
Balance of payments adjustments to international merchandise goods trade
21.142 Known components of GSP(E) include trade in goods on a merchandise trade basis rather than the more conceptually correct balance of payments basis. However, reconciliation to a BoP basis is made for each state. This reconciliation is made to known components of GSP(E) to ensure the balance of payments reconciliation is represented in the GSP(I/E) deflator.
Modelled net interstate trade in goods
21.143 Interstate trade relates to imports and exports of domestically produced goods between states and territories. Data for Queensland is based on historic estimates sourced from the ABS publication, Interstate Trade, Queensland. Data for the remaining jurisdictions are based on activity indicators that are used to extrapolate historic estimates produced by the Centre of Policy Studies (CoPS) at Monash University. This methodology assumes that state relativities have remained static since the 1980s.
Modelled interstate re-exports/imports
21.144 Interstate re-exports/imports occur when the state of final destination of international trade is different to the state in which goods cross the customs barrier. Similarly to interstate trade in goods, this estimate is produced by extrapolating historic estimates produced by CoPS using volume indicators of international trade.
Volume GSP(I/E)
21.145 A volume measure of GSP(I/E) is created by deflating current price GSP(I/E) with the GSP(I/E) deflator.
\(\large Volume \space GSP(I⁄E)= \frac{current \space price \space GSP(I/E)}{GSP(I/E)Deflator}\)
GSP(I/E) Deflator
21.146 A price deflator for GSP(I/E) is created using current price and volume estimates of adjusted known components GSP(E).
21.147 The GSP(I/E) implicit price deflator is calculated as:
\(\large GSP(I⁄E) IPD= \frac{current \space price \space Adjusted \space known \space components \space GSP(E)}{chain \space volume \space Adjusted \space known \space components \space GSP(E)}\)
The balancing item
21.148 The balancing item in state accounts has a slightly different meaning than the corresponding items in the national accounts. Balancing items in the ASNA are key macroeconomic indicators (see paragraph 3.32), whereas the same item is the difference between known components of GSP(E) and GSP(I/E) in the state accounts. It implicitly comprises total net interstate trade in goods and services; changes in inventories; and other miscellaneous components.
21.149 Other miscellaneous components of the balancing item are generally items that are not covered in GSP(E) known components, due to measurement or other issues. An example is BoP basis reconciliation values to merchandise trade which are included as part of the balancing item. There are other measurement issues at state level which cannot be identified.
21.150 The balancing item is calculated as follows for both current price and volume components:
\(\large Balancing\space item = GSP(I/E) – known \space components \space of \space GSP(E)\)
21.151 The balancing item is broken up further into identified and unidentified components. The identified components are estimated but are not published due to confidentiality or quality concerns.
Identified component
21.152 The identified component of the balancing item includes some items for which estimates are produced but are not of sufficient reliability to publish. The following are calculated as part of the adjustment to known components of GSP(E):
- net HFCE interstate
- net BoP basis reconciliation to international merchandise goods trade
- modelled net interstate goods trade
- modelled interstate re-exports/imports.
21.153 Additionally estimated are:
- changes in inventories
- balancing item discrepancy.
Changes in inventories
21.154 Changes in inventories are split using the top-down approach at an industry level to states based on state GVA for these industries. State splits of changes in inventories are only produced for analytical purposes and are not published.
Balancing item discrepancy
21.155 The balancing item discrepancy is the allocation of the national statistical discrepancy across the states. This ensures consistency between the sum of the states and Australia. It is allocated to states based upon state shares of GSP(I) for both current price and volume estimates.
Unidentified component
21.156 The unidentified component of the balancing item is calculated residually as follows:
| Unidentified component | = Total balancing item |
| – Identified components |
21.157 The unidentified component conceptually represents interstate trade in services, but it also embodies any remaining discrepancies that occur across state measures of expenditure and income due to underlying measurement issues.