Enhancing NZ’s Economic Statistics: An Australian Perspective · 2016-01-25 · Developing Macro Economic Statistics: An Australian Perspective Main Points 1. The Characteristics

Developing Macro Economic Statistics: An Australian Perspective

Main Points1. The Characteristics of Australia’s

Macro-Economic Statistics;2. The benefits to Australia3. Shortcomings and Criticisms;4. ABS Response and Future

Developments.


By world standards Australia has a rich set of macro-economic statistics-comprehensive in scope;-quarterly frequency (GDP E,I&P and all accounts except sector balance sheets)-detailed:

• 15,000 series; • original, seasonally adjusted and trend;• detailed breakdowns by industry, sector, transaction type, assets and

liabilities, nationally and by state.-long time series (e.g. QGDP from 1959);-timeliness/quality balance:

• National Accounts and BoP statistics (Annuals 5 months from reference year, quarterlies 2 months from reference quarter)

Developing Macro-Economic Statistics: An Australian Perspective

Annually Quarterly

Yes Partial

Annually Quarterly

Yes Yes

Annually Quarterly Annually Quarterly Anually Quarterly Annually Quarterly

Yes Yes

Yes No Yes Yes Yes NoAnnually Quarterly

(Not Published)Yes Yes

AUS (~SNA08)

(Not Published)

Financial Account

Opening Balance Sheet Other Changes in Assets Account Closing Balance SheetCapital Account

Production Account

Income & Use of Income Account

Comprehensive Scope

Australia GDP(P) published level of detail New Zealand published level of detail Agriculture, forestry and fishing (A) ; Agriculture ; Agriculture Agriculture, forestry and fishing (A) ; Forestry and fishing ; Fishing, forestry, and mining Agriculture, forestry and fishing (A) ; Manufacturing Mining (B) ; Mining (excluding services to mining) ; Electricity, gas, and water Mining (B) ; Exploration and mining support services ; Construction Mining (B) ; Wholesale trade Manufacturing (C) ; Food, beverage and tobacco products ; Retail, accommodation, and restaurants Manufacturing (C) ; Textile, clothing and other manufacturing ; Transport and communication Manufacturing (C) ; Wood and paper products ; Finance, insurance, and business services Manufacturing (C) ; Printing and recorded media ; Government administration and defence Manufacturing (C) ; Petroleum, coal, chemical and rubber products ; Personal and community services Manufacturing (C) ; Non-metallic mineral products ; Unallocated and balancing item(1) Manufacturing (C) ; Metal products ; Gross domestic product Manufacturing (C) ; Machinery and equipment ; Manufacturing (C) ; Electricity, gas, water and waste services (D) ; Electricity ; Electricity, gas, water and waste services (D) ; Gas Electricity, gas, water and waste services (D) ; Water supply and waste

Electricity, gas, water and waste services (D) ; Construction (E) ; Wholesale trade (F) ; Retail trade (G) ; Accommodation and food services (H) ; Transport, postal and warehousing (I) ; Road ; Transport, postal and warehousing (I) ; Air and space transport ; Transport, postal and warehousing (I) ; Rail, pipeline and other transport ; Transport, postal and warehousing (I) ; Transport, postal and storage

Transport, postal and warehousing (I) ; Information media and telecommunications (J) ; Financial and insurance services (K) ; Rental, hiring and real estate services (L) ; Professional, scientific and technical services (M) ; Administrative and support services (N) ; Public administration and safety (O) ; Education and training (P) ; Health care and social assistance (Q) ; Arts and recreation services (R) ; Other services (S) ; Ownership of dwellings ; Gross value added at basic prices ; Taxes less subsidies on products ; Statistical discrepancy (P) ; GROSS DOMESTIC PRODUCT ;

“Detailed: Comparative breakdown of production by industry in quarterly accounts for Aust and NZ illustrating added detail for Australia”

Mar.2010 Jun.2010 Sep.2010 Dec.2010 Mar.2011New and used dwellings 9991 10801 10613 10702 11180Alterations and additions 7882 7847 7679 7496 7863Ownership transfer costs 4031 3979 3679 3348 3352New building 8196 8312 8223 7736 7455New engineering construction 11478 12063 13098 13550 13890Total machinery and equipment 20152 19390 19260 20109 21310Cultivated biological resources 760 793 874 807 780Research and development 3436 3426 3405 3398 3390Computer software 2734 2768 2781 2831 2863Mineral and petroleum exploration 1466 1525 1482 1451 1522Artistic originals 344 352 361 370 376Public corporations

Commonwealth 393 315 405 445 532State and local 6247 5958 6086 6014 5735

General governmentNational-defence 2632 2293 2259 2231 1696National-non-defence 2205 2611 2120 2123 2868State and local 10927 10384 10321 10399 10235


Statistical Detail

Table showing breakdown of Australian Cap Ex by component


a rich set of macro-economic statistics-contemporary methodologies:• FISIM allocation, • “hidden economy adjustments”, • Timely (year minus 1) annual supply/use

balancing-in current prices and volumes;• Annual national input/output tables;• Full annually chain-linked volume measures• SNA 08

• Capitalisation of R&D and DWP

-

10,000

20,000

30,000

40,000

50,000

60,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$GDP per capita on equivalent basis, Australia and New Zealand, 2000 - 2010*

NZ GDP/Capita

Aus GDP(equivalent)/Capita

Adjustments to Australian GDP (%GDPE)1993 SNACultivated Biological resources -<1%HFCE Allocation of FISIM -2%Non-observed economy -1%2008 SNAResearch and Development -1%Defence Weapons Platforms -<1%Total Adjustment -5%

* New Zealand has March financial years, Australia has June financial years

1993 SNA and 2008 SNA added ~ 5% to GDP; no impact on growth


a rich set of macro-economic statistics

robust integrated data sources:• Comprehensive Tax-based Business

Register• Annual and Quarterly integrated economic

surveys (including capex, engineering construction; and incomes)


Benefits to Australia

• model the effects of policy and investment options (e.g. use of I/O tables in estimating the economic impact of various prices for carbon, under an ETS or Carbon Tax);

• assess the impact on the economy of external shocks (e.g. the GFC), and of government policy responses;

• capacity to understand and respond to the impact of key medium to long-term economic drivers (e.g. the current mining boom); and short-term factors (the impact of the Queensland floods);

• identify and respond to financial and other economic risks;• confidence in understanding the structure and behaviour of the

economy and its components;• international confidence in the state of the Australian economy

and the quality of Australia’s economic management;• Informed advocacy and a lively and constructive economic

debate.

Alternative Savings and WealthUnderstanding Shocks: Tracking the Impact of the GFC

Alternative “Income”

Understanding Shocks: Tracking the Impact of the GFC

Understanding the Impact of “Shocks”

“Without these numbers Australia would have missed a big chunk of the story during the GFC” Stephen Morling, Head of Forecasting, Australian Treasury)

Understanding Economic Drivers, Informing advocacy and debate:Mining as a % of total Private Non Financial Corporations

G20 financial balance sheet data availability

Global Scrutiny of Economic Performance


Policy, Understanding and Decision Making Issues: where improved statistics can make a difference:

Users/Uses of Financial Accounts in Australia:

Commonwealth Treasury:

-Financial Analysis of Household and Business Financial Position;-Tracking business profitability;-Use in forecasting household wealth and savings flows;-Monitor changes in sector savings rates;-Capacity to confirm changes in savings by changes in financial position of households (e.g. increased deposits);-track falls in credit;-Quarterly briefing to the Treasurer on Australian Financial position.-identify inconsistencies within the SNA set and raise these points with the ABS

Developing Macro-EconomicStatistics: An Australian Perspective


Users/Uses of Financial Accounts in Australia:Reserve Bank of Australia

-RBA have a Financial Conditions Unit which uses the data extensively;-focus on HH and Private Non-Financial Corporate Sectors;-interested in % foreign ownership of equities and of Government Securities;-track performance of Managed Funds;-track changes in HH net-worth;-track changes in sector savings ratios;-RBA derive a quarterly HH B/S sheets using ABS and private sector (property monitors) data;-monitor gearing (assets/debt);-monitor changes in HH consumption, model wealth impacts and household exposure to equities;-monitor vulnerability of business to debt exposure;




ANZ Bank

-tracking changes in the assets and liabilities of the household and Private Non-Financial Corporate Sectors (the most intensively used data sets were the b/s and flow accounts for these two sectors);-evaluation of gearing (debt/incomes, debt/assets) and related commercial risk;-track composition of changes in household savings over time; interested in mix of financial and real assets;-tracking % of household assets held on deposit;-tracking of interest paid;-assessment of the capacity of the corporate sector to service its debt;

Enhancing NZ’s Economic Statistics: An Australian Perspective



Deutsche Bank-bond market monitoring (distribution of ownership of Federal and State Government Bonds-domestic and off-shore);-monitoring changes in the assets of pension funds;-tracking change in corporate leverage (Private non-financial corporations);-tracking change in ownership of debt and equity by pension funds and by the Financial Sector (and the exposure of the latter to deposits);-advising foreign clients on investment in Australian securities;-authoritative source of debt on issue by sector (used in developing investment proposals on behalf of clients).

Note: Different CVM methods

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

$m

NZ NEOAustralian NEO

Net errors and omissions, Balance of Payments, New Zealand and Australia

Internal Consistency:

SIH and ASNA compared

Note: OECD macro/micro comparisons projects

Statistical Coherence

Developing Macro-economic Statistics: An Australian Perspective

Criticisms of Australian Macro-Economic Statistics

IMF ROSC:

• CPI Coverage (60% of resident population), maintenance (6 yearly rebase) and frequency (quarterly, not monthly)

• Data sources and methodology for services in National Accounts

16th Series CPI Review

• CPI Frequency and Maintenance• Volatility of FISIM prices in CPI



User Criticisms

Credibility• Size and direction of statistical discrepancies• Revisions and Corrections• Internal inconsistencies• Inconsistency with external evidence• Residual seasonality

Note: Different CVM methods

Internal consistency

-20

-10

0

10

20

-20

-10

0

10

20

1988 1991 1994 1997 2000 2003 2006 2009*Net of depreciation**The f inancial accounts are non-seasonally adjusted; the income account is seasonally adjuestedSource: ABS

Household Saving Ratios*Per cent of household disposable income

Income measure

% %

Financial accounts

Revisions: HFCE

-5

0

5

10

15

-5

0

5

10

15

1980 1985 1990 1995 2000 2005 2010

Net Household SavingPer cent to net household disposable income

Previous vintage

% %

Current



Environmental and Wellbeing Criticisms

• GDP has undue prominence as a driver of government policy (despite its known limitations, growth in GDP is the de facto measure of increased well-being).


ABS Response and Planned developments:Strategic emphasis:enhanced coherence/consistency:

• issues log;• internal and external data confrontation;• enhanced use of external economic intelligence;• focus of Analytical program.

capability building;• Concentrate Research and Analytical capability;• Training;• business process improvement;• use of experienced former staff.


ABS Response and Planned developments:

stronger relationships with key users and suppliers:• RBA;• Commonwealth and State Treasuries;• Customs, Tax, APRA.

Update and publish Concepts, Sources and Methods documentation in a “wiki” format;


ABS Response and Planned developments:

Improve identified areas where sources and methods are weak (services: production, household consumption, international trade; quarterly SUBs);

Review and, if required, update sources and methods for the Mining sector;

New Funding Secured from 2011/12;

Update “Measures of Australia’s Progress”

Gini coefficient according to the OECD 2010 factbookmid 2000s Australia: 0.30 NZ 0.34 OECD average 0.31

change 1980s-2000s Australia no overall change NZ 0.064; largest increase of OECD countries (i.e. worsening of income distribution) OECD average change 0.0197

A broader perspective on well-being: The Income Gap

MAP Diagram

Developing Macro-EconomicStatistics: An Australian Perspective

Questions And

Discussion

Documents

Enhancing NZ’s Economic Statistics: An Australian Perspective · 2016-01-25 · Developing Macro Economic Statistics: An Australian Perspective Main Points 1. The Characteristics