Balance of Payments and International Investment Position, Australia

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Balance of payments statistics on current, capital and financial transactions and the international investment position statement

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Reference period
June 2021
Released
31/08/2021
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Key statistics

  • The current account surplus, seasonally adjusted, rose $1,539m to $20,461m.
  • The capital and financial account deficit rose $9,636m to $24,448m.
  • Australia’s net IIP liability position was $885.1b at 30 June 2021.

Main features

Key figures (a)
 Mar Qtr 2021 ($m)Jun Qtr 2021 ($m)
Balance on current account (b)18,92220,461
Balance on goods and services (b)25,43328,902
Net primary income (b)-6,244-7,377
Capital and financial account-14,812-24,448
International investment position (c)914,959885,123

(a) Trend series is not published from June Quarter 2019
(b) Seasonally adjusted
(c) Levels at end of period

(a) Seasonally adjusted estimates at current prices.

COVID-19 in this publication

Suspension of trend estimates

The trend series attempts to measure underlying behaviour of international trade activity. In the short term, this measurement will be significantly affected by the current COVID-19 pandemic and subsequent changes to regular patterns in international trade that will occur during this time. If the trend estimates in this publication were to be calculated without fully accounting for this unusual event, they would provide a misleading view of underlying international trade activity.

It may be some time before the underlying trend in international trade activity can be accurately estimated. The trend series has therefore been suspended from June quarter 2019 and will be reinstated when more certainty emerges in the underlying trend in international trade.

Seasonal adjustment and COVID-19

International Accounts uses the concurrent seasonal adjustment method, meaning that seasonal factors are re-estimated each time new data becomes available. If not appropriately accounted for, unusual events, such as COVID-19, can distort estimates calculated using this method. From March quarter 2020, seasonal factors for series that have been notably impacted by COVID-19 will be calculated using data up to and including December quarter 2019, then projected from March quarter 2020 onwards. This approach, known as the forward factor method, ensures that the seasonal factors are not distorted by COVID-19 impacts.

The ABS has advised users that it had moved to using forward factors for seasonal analysis of a number of series, including Travel Services. Current ABS (and international practice) requires at least three years of data to assess whether a change in the seasonal pattern has occurred. Should COVID-19 result in a long-term change to the seasonal pattern then revisions to these series may occur in the future. The ABS will consult with users on any future methods changes to seasonal adjustment and potential revisions.

For more information on interpreting seasonally adjusted estimates of International travel services please see the May 2020 feature article International Travel Services time series which outlines the matter in greater detail.

Changes in forthcoming issues

Annual seasonal re-analysis

The seasonally adjusted and trend estimates of goods, services, primary income and secondary income will be revised in the September quarter 2021 issue of this publication as a result of the annual seasonal re-analysis. This re-analysis reviews the seasonal and trading day factors in more detail than is possible in the quarterly processing cycle and assesses the appropriateness of any prior corrections.

New base year and re-referencing of chain volume estimates and implicit price deflators

A new base year 2019-20 will be introduced into chain volume estimates and implicit price deflators in the September quarter 2021 issue. As a result, the chain volume estimate series and implicit price deflators series will be re-referenced to 2019-20.

Upcoming changes to the September quarter 2021 Balance of Payments and International Investment Position, Australia

Upcoming changes to the Australian Bureau of Statistics (ABS) publication, Balance of Payments and International Investment Position, Australia. From September quarter 2021, the ABS will implement Economic and Financial Statistics Collection (EFS) for derivative asset and liability activity.

The Australian Prudential Regulatory Authority (APRA) collects data from the financial sector (Authorised Deposit-taking Institutions (ADIs) and Registered Financial Corporations (RFCs) on behalf of the ABS and the Reserve Bank of Australia (RBA). Over the past few years, APRA, the ABS, the RBA, and the financial sector have been working together to modernise the data collection and develop a new set of forms and related guidance called the EFS collection. The fourth and final phase of the EFS collection collects data on derivative activity.

 

What’s changing?

From the September quarter 2021 reference period, derivative liability and derivative asset data will no longer be reported by banks to the ABS via the Survey of International Investment. Derivatives data for banks will be collected by APRA on behalf of the ABS. The aggregated data will be used in the quarterly ABS Balance of Payments and International Investment Position statistics.

 

Enhanced data quality

The derivatives data received via APRA through the EFS collection will enhance data quality for the ABS Balance of Payments and International Investment Position statistics. For example, it provides:

  • enhanced reporting guidance for financial institutions on derivatives data
  • updated definitions to align with international standards for compiling economic statistics

The enhanced derivatives data in the quarterly ABS Balance of Payments and International Investment Position statistics may require backcasting using approved ABS methodological techniques. This will be implemented from the September 2021 reference period. The ABS will consult users prior to implementing any backcasting and will publish a note before publication.

The derivatives data will appear in several estimates in the Balance of Payments and International Investment Position, Australia publication (see Table 1).

Table 1: Tables in the Balance of Payments and International Investment Position, Australia incorporating APRA derivatives data
Table no.Title of table
1Balance of payments, summary: original - quarter
2International investment position: by net foreign equity and net foreign debt - quarter
3Foreign assets and liabilities: by equity and debt - quarter
13Financial account - quarter
14International investment: foreign assets - quarter
15International investment: foreign liabilities - quarter
16Foreign debt levels - quarter
17Gross external debt liabilities: levels - quarter
18Currency and residual maturity of foreign debt - quarter
20Foreign assets and liabilities by industry - quarter
23Selected international accounts ratios: seasonally adjusted - quarter
27International investment: directional principle - quarter
28Summary of revisions - quarter
29International investment position: historical summary - quarter
30Balance of payments, summary: original – financial year

Current Account

Balance on current account in current prices, seasonally adjusted (a) - June quarter 2021
   Current prices ($m)Current prices changes ($m)
Balance on current account20,4611,539
Balance on goods and services28,9023,469
Net goods27,2054,465
Net Services1,696-996
Net primary income-7,377-1,133
Net secondary income-1,063-797

(a) For sign conventions, see the Concepts section in the Explanatory notes in the Methodology.

Terms of trade

Australia's seasonally adjusted terms of trade on net goods and services for the June quarter 2021 rose 7.0% to 123.3, with an increase of 9.3% in the implicit price deflator (IPD) for goods and services credits and an increase of 2.2% in the IPD for goods and services debits.

(a) Seasonally adjusted, reference year 2018-19 = 100

Relationship between IPD, EPI and IPI

Differences between the IPD and International Trade Price Indexes can arise due to a number of methodological factors including differences in pricing points, timing, coverage and weights.

Price comparison (QoQ % change)
 Implicit price deflators (a)Implicit price deflators (a)Chain Laspeyres Indexes (b)International Trade Price Indexes (b)
 Seasonally AdjustedOriginalOriginalOriginal
Goods exports10.713.613.113.2
Services exports0.50.30.4na
Goods imports1.21.51.61.9
Services imports9.28.77.4na

na not available
(a) Reference year 2018-19 = 100.
(b) Source: International Trade Price Indexes, Australia.

(a) Reference year 2018-19 = 100
(b) Source: International Trade Price Indexes, Australia.

Balance on goods and services

In seasonally adjusted chain volume terms, the balance on goods and services was a surplus of $5,164m, a fall of $4,866m on the March quarter 2021 surplus of $10,030m.

Assuming no significant revision to March quarter 2021 estimates of Gross Domestic Product, the balance on goods and services is expected to detract 1.0 percentage points from the June quarter 2021 GDP.

(a) Seasonally adjusted, reference year 2018-19.

Exports of goods (credits)

In seasonally adjusted terms at current prices, goods credits rose $6,915m (7%) to $111,108m, with volumes down 4% and prices up 11%.

Goods credits, price and volume change - seasonally adjusted - June quarter 2021
  Current prices ($m)Current prices (%)Chain volume measures (a) (%)Implicit price deflators (a)(b)(%)
Exports of goods6,9156.6-3.610.7
 Rural goods8386.81.84.9
 Non-rural goods7,9849.5-2.812.7
 Net exports of goods under merchanting-39-26.0-37.016.4
 Non-monetary gold-1,868-24.6-25.71.5

(a) Reference year 2018-19 = 100
(b) Movements in indexes are based on data to four decimal places

Rural goods

Rural goods, current price, seasonally adjusted
  Mar 21 ($m)Jun 21 ($m)Mar 21 to Jun 21 ($m)Mar 21 to Jun 21 (%)
Rural goods12,38513,2238387
 Meat and meat preparations3,2823,5542728
 Cereal grains and cereal preparations2,9593,36540614
 Wool and sheepskins66489723335
 Other rural(a)5,4795,407-72-1

(a) For all time periods, estimates for sugar, sugar preparations and honey are included in Other non-rural.

Non-rural goods

Non-rural goods, current price, seasonally adjusted
  Mar 21 ($m)Jun 21 ($m)Mar 21 to Jun 21 ($m)Mar 21 to Jun 21 (%)
Non-rural goods84,05492,0387,9849
 Metal ores and minerals(a)48,85653,2544,3989
 Coal, coke and briquettes(a)9,70410,64293810
 Other mineral fuels(a)(b)10,28411,9001,61616
 Metals (excl. non-monetary gold)3,1183,2451274
 Machinery2,6332,8061737
 Transport equipment9081,02912113
 Other manufactures5,2535,3801272
 Other non-rural (incl. sugar and beverages)(c)2,7973,21341615
 Goods procured in ports by carriers(b)5005717114

(a) From September quarter 2019 onwards, separate seasonally adjusted factors for current price and chain volume measures are applied.
(b) In using these seasonally adjusted series, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern.
(c) For all time periods, estimates for sugar, sugar preparations and honey are included in Other non-rural. 

(a) Seasonally adjusted

(b) Between September quarter 2005 and September quarter 2019, seasonal factors were derived based on the corresponding chained volume measure.

(c) From September quarter 2019 onwards, separate seasonally adjusted factors for current price and chain volume measures are applied.

Imports of goods (debits)

In seasonally adjusted terms at current prices, goods debits rose $2,451m (3%) to $83,903m, with volumes up 2% and prices up 1%.

Goods debits, price and volume change - seasonally adjusted - June quarter 2021
  Current prices ($m)Current prices (%)Chain volume measures (a) (%)Implicit price deflators (a)(b)(%)
Total Goods Imports2,4513.01.81.3
 Consumption goods-69-0.2-0.1-0.1
 Capital goods4292.22.2-0.1
 Intermediate and other merchandise goods1,9966.63.13.3
 Non-monetary gold965.13.51.5

(a) Reference year 2018-19 = 100
(b) Movements in indexes are based on data to four decimal places

Consumption goods

Consumption goods(a), current price, seasonally adjusted
 Mar 21 ($m)Jun 21 ($m)Mar 21 to Jun 21 ($m)Mar 21 to Jun 21 (%)
Consumption goods-29,333-29,264-69-
 Food and beverages, mainly for consumption-4,374-4,154-220-5
 Household electrical items-2,136-1,817-319-15
 Non-industrial transport equipment-6,646-7,32167510
 Textiles, clothing and footwear-5,110-5,13121-
 Toys, books and leisure goods-2,051-1,843-208-10
 Consumption goods n.e.s.-9,016-8,997-19-

- nil or rounded to zero (including null cells) 
(a) For sign conventions, see the Explanatory notes.

Capital goods

Capital goods(a), current price, seasonally adjusted
 Mar 21 ($m)Jun 21 ($m)Mar 21 to Jun 21 ($m)Mar 21 to Jun 21 (%)
Capital goods-19,948-20,3774292
 Machinery and industrial equipment-6,870-7,1773074
 ADP equipment-2,846-2,814-32-1
 Telecommunications equipment-3,549-3,152-397-11
 Civil aircraft and confidentialised items(b)(c)-758-805476
 Industrial transport equipment n.e.s.-3,240-3,67243213
 Capital goods n.e.s.(d)-2,684-2,757733

(a) For sign conventions, see the Explanatory notes.
(b) From July 2008, commodities subject to a 'no commodity details' or 'no value details' restriction are included in Civil aircraft and confidentialised items. For earlier periods, commodities subject to a 'no commodity details' or 'no value details' restriction are included in Other merchandise goods.
(c) This component is not seasonally adjusted.
(d) In using these seasonally adjusted series, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern.

Intermediate and other merchandise goods

Intermediate and other merchandise goods(a), current price, seasonally adjusted
 Mar 21 ($m)Jun 21 ($m)Mar 21 to Jun 21 ($m)Mar 21 to Jun 21 (%)
Intermediate and other merchandise goods-30,292-32,2881,9967
 Food and beverages, mainly for industry-538-491-47-9
 Primary industrial supplies n.e.s.(b)-382-68129978
 Fuels and lubricants(c)-6,729-7,72699715
 Parts for transport equipment-3,524-3,502-22-1
 Parts for ADP equipment-220-230105
 Other parts for capital goods-4,783-4,770-13-
 Organic and inorganic chemicals-915-967526
 Paper and paperboard-563-57181
 Textile yarn and fabrics-426-423-3-1
 Iron and steel-764-812486
 Plastics-1,216-1,270544
 Processed industrial supplies n.e.s.-10,117-10,5764595
 Other merchandise goods(d)(e)-96-256160167
 Goods procured in ports by carriers(c)-18-13-5-28

- nil or rounded to zero (including null cells) 
(a) For sign conventions, see the Explanatory Notes.
(b) In using these seasonally adjusted series, care should be exercised because of the difficulties associated with reliably estimating the seasonal pattern.
(c) Prior to September quarter 2019 this component is not seasonally adjusted
(d) From July 2008, commodities subject to a 'no commodity details' or 'no value details' restriction are included in Civil aircraft and confidentialised items. For earlier periods, commodities subject to a 'no commodity details' or 'no value details' restriction are included in Other merchandise goods.
(e) From July 1981, this component is not seasonally adjusted

Services

Services exports, price and volume change - seasonally adjusted - June quarter 2021
  Current prices ($m)Current prices (%)Chain volume measures (a) (%)Implicit price deflators (a)(b)(%)
Exports of services48--1
 Manufacturing services on physical inputs owned by others0---
 Maintenance and repair services n.i.e.-3-21-21-
 Transport75843
 Travel13522-
 Other services-158-2-2-

- nil or rounded to zero (including null cells)
(a) Reference year 2018-19 = 100
(b) Movements in indexes are based on data to four decimal places

Services imports, price and volume change - seasonally adjusted - June quarter 2021
  Current prices ($m)Current prices (%)Chain volume measures (a) (%)Implicit price deflators (a)(b)(%)
Imports of services1,0439-9
 Manufacturing services on physical inputs owned by others0---
 Maintenance and repair services n.i.e.11-22
 Transport3349-2138
 Travel5663583511
 Other services1422-2

- nil or rounded to zero (including null cells)
(a) Reference year 2018-19 = 100
(b) Movements in indexes are based on data to four decimal places

Income

Primary income deficit widened by $1,133m to $7,377m in the June quarter 2021.

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Primary income credits

In seasonally adjusted terms at current prices, income to residents (credits) fell $529m (3.1%) to $16,523m. The main components contributing to this rise was:

  • direct investment assets - income on equity and investment fund shares; down $459m (6.6%)
  • portfolio investment assets - investment income on equity and investment fund shares; down $107m (1.4%)

Primary income debits

In seasonally adjusted terms at current prices income to non-residents (debits) rose $604m (2.6%) to $23,900m. The main components contributing to this rise were:

  • direct investment liabilities - income on equity and investment fund shares; up $2,824m (27.9%)
  • portfolio investment liabilities - investment income on equity and investment fund shares; down $2,584m (38.8%)

Secondary income

In seasonally adjusted terms at current prices, the net secondary income deficit rose $797m to $1,063m in the June quarter 2021.

Capital and Financial Account

The capital and financial account recorded a deficit of $24.5b during the June 2021 quarter, mainly driven by the financial account deficit of $24.2b. 

The financial account deficit was due to a net outflow of equity of $24.5b and a net inflow of debt of $268m.

Capital and financial account
 Sep-20Dec-20Mar-21Jun-21Qtr on Qtr
 ($m)($m)($m)($m)($m)
Capital account-165-156-182-218-36
Acquisitions/disposals of non-produced non-financial assets02460-6
Acquisitions/disposals of non-produced non-financial assets credits02960-6
Acquisitions/disposals of non-produced non-financial assets debits0-5000
Capital transfers-165-180-188-218-30
Capital transfers credits00000
Capital transfers debits-165-180-188-218-30
Financial account-6,106-12,135-14,630-24,230-9,600
Direct investment-5,8851,3569,0985,496-3,602
Direct investment assets-10,124-2,4915,2032,859-2,344
Direct investment liabilities4,2393,8473,8952,637-1,258
Portfolio investment14,726-11,707-32,177-27,9024,275
Portfolio investment assets-40,977-73,659-14,150-45,004-30,854
Portfolio investment liabilities55,70361,952-18,02717,10235,129
Financial derivatives-7,674-10,7341,437-2,182-3,619
Financial derivatives assets50,02626,73665,66221,888-43,774
Financial derivatives liabilities-57,699-37,470-64,225-24,07040,155
Other investment-7,0318,16912,478-395-12,873
Other investment assets15,48425,217-3,283-6,896-3,163
Other investment liabilities-22,515-17,04815,7616,501-9,260
Reserve assets-242781-5,4657546,219
Net errors and omissions-2,211-2,790-3,287-1,8991,388

International Investment Position

Australia's net IIP liability position was $885.1b at 31 June 2021, a decrease of $29.8b on the revised 31 March 2021 figure of $915.0b. Australia's net foreign debt liability position increased $22.6b to $1,186.4b. Australia's net foreign equity asset position increased $52.4b to $301.2b at 31 June 2021.

International investment position, by net foreign equity and net foreign debt
  Position at beginning of periodTransactionsPrice changesExchange rate changesOther adjustmentsPosition at end of period
  ($m)($m)($m)($m)($m)($m)
Net International Investment PositionDec-20976,906-12,135-30,82248,111-144981,916
Net International Investment PositionMar-21981,916-14,630-53,056881-152914,959
Net International Investment PositionJun-21914,959-24,23010,669-16,125-150885,123
        
Net Foreign EquityDec-20-205,106-35,286-31,71272,273-1,236-201,068
Net Foreign EquityMar-21-201,068-22,828-21,410-4,114605-248,815
Net Foreign EquityJun-21-248,815-24,498-5189-22,568-163-301,233
        
Net Foreign DebtDec-201,182,01223,152890-24,1621,0921,182,984
Net Foreign DebtMar-211,182,9848,198-31,6464,995-7571,163,774
Net Foreign DebtJun-211,163,77426815,8586,443121,186,356

Supplementary Information

Value adjustments

Goods credits data presented in this publication are based on information provided by exporters to the Department of Home Affairs (Home Affairs). At the time of initial reporting to Home Affairs, the final prices at which transactions take place are not known for some commodities. Final quantity and/or unit price information is updated progressively in international merchandise trade data as exporters revise the information provided to Home Affairs.

For commodities such as iron ore and coal, newly negotiated contract prices are not fully reflected in data first reported to Home Affairs. When additional information on quantity and/or unit price for these commodities is available, the ABS may adjust the data to reflect actual transaction values.

Iron ore adjustments are applied on an international merchandise trade basis at the Australian Harmonized Export Commodity Classification (AHECC) level. Coal, coke and briquettes are adjusted on a balance of payments basis in original current price terms. When actual final transaction prices become available estimates are replaced with these data.

In most instances, transfer of ownership occurs when goods cross the customs frontier. In certain circumstances the ownership of large value capital expenditure items can occur prior to the items crossing the customs frontier. The ABS may adjust the relevant balance of payments series to record the timing when transfer of ownership was affected.

Exports on an international merchandise trade basis

Iron ore (in original terms)

  • Adjustments have been applied to iron or lump in the December quarter 2020 (+$20m), March quarter 2021 (+$25m) and June quarter 2021 (+$85m)
  • Adjustments have been applied to iron ore fines in the December quarter 2020 (+$165m), March quarter 2021 (+$15m) and June quarter 2021 (+$835m)
  • When actual final transaction prices become available estimates are replaced with these data.

Goods credits on a balance of payments basis

Coal (in original terms)

  • Adjustments have been applied to coal, coke and briquettes in the balance of payments series for the March quarter (+$5m) and the June quarter (-$195m) 2021.  All previous adjustments have been removed.

Capital expenditure (in original terms)

  • The balance of payments goods debits component capital goods n.e.s. includes an estimate of expenditure on capital goods that have changed ownership but have not yet crossed the customs frontier.

Revisions

The following goods component has been revised since the release of the June 2021 issue of International Trade in Goods and Services, Australia.

  • fuel and lubricants component of goods debits, revised in the December quarter 2020.
  • other merchandise goods n.e.s. of goods debits, revised in the September quarter 2019. 
  • parts for transport equipment of goods debits, revised in the September quarter 2019. 
  • industrial transport equipment of goods debits, revised in the March quarter 2021. 

Summary of revisions since the last issue of this publication

Table 28 summarises revisions, in original current price terms, since the last issue of this publication.

Incorporation of the latest survey and administrative data has resulted in revisions to the balance of payments series back to the September quarter 2017. In original current price terms, these revisions have:

  • increased the current account surplus for the September quarter 2017 by $142m
  • increased the current account surplus for the December quarter 2017 by $161m
  • increased the current account surplus for the March quarter 2018 by $174m
  • increased the current account surplus for the June quarter 2018 by $263m
  • decreased the current account surplus for the September quarter 2018 by $40m
  • decreased the current account surplus for the December quarter 2018 by $57m
  • decreased the current account surplus for the March quarter 2019 by $42m
  • decreased the current account surplus for the June quarter 2019 by $89m
  • decreased the current account surplus for the September quarter 2019 by $116m
  • decreased the current account surplus for the December quarter 2019 by $138m 
  • increased the current account surplus for the March quarter 2020 by $306m 
  • increased the current account surplus for the June quarter 2020 by $434m 
  • increased the current account surplus for the September quarter 2020 by $427m 
  • increased the current account surplus for the December quarter 2020 by $1435m 
  • increased the current account surplus for the March quarter 2021 by $490m 

 

The International Investment Position (IIP) has been revised back to the June quarter 2013. These revisions have increased Australia's net IIP liability $40,318m to a net liability position of $914,959m at 31 March 2021. The financial account deficit has been revised down $542m to $14,630m at 31 March 2021.

Seasonally adjusted and trend series have been revised due to the incorporation of revised estimates and the incorporation of estimates for the latest quarter.

In seasonally adjusted terms, the revisions increased the volume surplus on goods and services by $33m for the March quarter 2021.

Data in this issue aligns with the data in the June quarter 2021 issue of Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) to be released on 1 September 2021.

Economic conditions

CountryMSCI quarterly percentage change (a)(%)AUD exchange rate quarterly percentage change (b)(%)
Australia7.80na
United States of America8.50-1.10
United Kingdom5.00-1.97
Europe6.70-2.66
China1.30-2.69
Japan0.00-1.44
Singapore-0.80-1.33
India8.400.02
New Zealand-5.20-1.36

OECD quarterly growth rates for select countries can be found through the following link: https://stats.oecd.org/index.aspx?queryid=350
(a) MSCI data based on local currency except for Europe which is based on $USD. MSCI data from https://www.msci.com/ 
(b) Exchange rates data from RBA: https://www.rba.gov.au/statistics/historical-data.html#exchange-rates

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Previous catalogue number

This release previously used catalogue number 5302.0.

Methodology

Balance of Payments and International Investment Position, Australia methodology, June 2021

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