2. Australian National Accounts State Accounts

3. States of Australia

4. State Level Data Produced  Limited set of state data published in the Quarterly National Accounts  State Final Demand –Household and Government Consumption –Private and Government Capital Formation  International Trade in Merchandise  Compensation of Employees

5. State Level Data Produced  Full set of State Accounts produced annually  All three measures: Income, Expenditure & Production  Plus:  Income and Outlay Accounts  Capital Accounts  Agricultural Income

6. General Approach  National:  At the national level supply-use benchmarks are in place for t-1  These benchmarks are moved forward using movements from sub- annual indicator series  State:  Headline measure: GSP(A) = average of GSP(E/I) and GSP(P)  National Benchmarks – all state aggregates are set to equal national benchmarks  Note GSP = Gross State Product

7. GSP(E) Calculated for each state by adding: –Final expenditures (government and household) –Private and public gross fixed capital formation –Exports less imports of goods and services –A balancing item Balancing item includes changes in inventories and net interstate trade.

8. GSP(I) Calculated for each state by adding: –Compensation of employees –Gross operating surplus –Gross mixed income –Taxes less subsidies on production and imports Deflated to chain volume estimates using the implicit price deflator from GDP(E)

9. GSP(P) Methodology 1.Australia GVA by industry in current prices 2.Allocate to state using factor income shares in reference year 3.State GVA by industry in current prices 4.Apply quantity revaluation or price deflation to create the output indicator 5.Use output indicator with price information to create chain volume measure

10. GSP(P) methodology 6.State GVA by industry chain volume measures 7.Ownership of dwellings and Taxes less subsidies on products 8.GSP(P)

11. GSP(P) methodology Almost all industries use an output indicator approach –i.e. extrapolate reference year estimates of current price GVA using movements in volume indicator of output –Agriculture uses a double deflation methodology Most volume indicators derived by price deflation –i.e. dividing a price index into a current price value of sales or turnover –Quantity revaluation used when there are individual commodities that are reasonably homogeneous and not subject to quality change or where price change difficult to measure

12. GSP(P) methodology Once each state’s current price and volume GVA estimates have been derived for each industry and Ownership of dwellings they are then benchmarked to the Australian total for each industry This ensures that the sum of the states for each industry equals the Australian total Each state’s benchmarked industry GVA estimates (current price and chain volume) are then summed to produce GVA at basic prices for each state To derive GSP(P) Taxes less subsidies on products needs to be added to each state’s GVA at basic prices

13. Key Data Sources – GSP(P) Quarterly Business Indicator Survey –All private non-financial corporations (excl agriculture) by state –Data Items: Sales, Wages, Profits, Inventories Government Finance Statistics –All general government and public corporations by state/national Administrative data from other government departments –Mining, Agriculture, Finance & Insurance, Health, Education Price Indexes –Consumer Price Index (by State) –Producer Price Indexes (national except for construction) –Labour Price Index (by state)

14. IndustryMethodologyPrice Indexes A - Agriculture, Forestry and Fishing Combination price deflation and quantity revaluation. Double deflation (for Agriculture) and quantity revaluation (for Forestry and Fishing). State production value data and quantity data. Producer Price Indexes B - MiningCombination price deflation and quantity revaluation. State production value data and quantity data Producer Price Indexes C - ManufacturingPrice deflation method. Current price turnover & GVA by state by sub-division Producer Price Indexes

15. IndustryMethodologyPrice Indexes D - Electricity, Gas, Water and Waste Services Combination price deflation and quantity revaluation. Electricity Gas and the Water groups are compiled by quantity revaluation at the subdivision level Waste services compiled by price deflation Producer Price Indexes E - ConstructionPrice deflation method. Current price turnover by state by sub- division Construction price indexes by state F - Wholesale Trade Price deflation method. Current price turnover by state by sub- division Producer Price Indexes

16. IndustryMethodologyPrice Indexes G - Retail TradePrice deflation method. Retail turnover data for all of Retail Consumer Price index H - Accommodation and Food Services Price deflation method. Turnover data by subdivision Consumer Price index I - Transport, Postal and Warehousing Combination price deflation and quantity revaluation. Turnover data for transport and warehousing, quantity data for postal Producer Price index

17. IndustryMethodologyPrice Indexes J - Information Media and Telecommunication Price deflation method Turnover data by subdivision Consumer Prices Index K - Financial and Insurance Services Quantity revaluation method. National data are collected from the Australian Prudential Regulatory Authority (APRA) State splits using hours worked by state, by industry group from the Labour Force survey Domestic Final Demand IPD L - Rental, Hiring and Real Estate Services Price deflation method. Current price turnover by state by sub- division Producer Price Index

18. IndustryMethodologyPrice Indexes M - Professional, Scientific and Technical Services Price deflation method. Current price turnover by state by sub- division Producer Price Indexes N - Administrative and Support Services Price deflation method. Current price turnover by state by sub- division Producer Price Indexes O - Public Administration and Safety Combination price deflation and quantity revaluation methods. Indicators are average hours worked by Government Administration employees -

19. IndustryMethodologyPrice Indexes P - Education and Training Quantity revaluation method. Student numbers for Preschool, Primary and Secondary, University, Vocational Education & Training Public sector expenditure on education by state is sourced from the Government Finance data - Q - Health Care and Social Assistance Combination price deflation and quantity revaluation methods. Private health turnover Public health number of treatments Consumer Price Index R - Arts and Recreation Services Price deflation method. Current price turnover by state by sub- division Consumer Price Index

20. IndustryMethodologyPrice Indexes S - Other ServicesPrice deflation method. Current price turnover by state by sub- division Consumer Price Indexes Ownership of dwellings Quantity revaluation method National current price split into states using the state shares of TFI Current price state estimates are quantity re-valued using the CVM for HFCE - Gross Dwelling Rents (actual plus imputed rent from owners of dwellings) Consumer Price Index Taxes less subsidies on products Quantity revaluation method Government Finance data are used to determine state shares -

21. Key Issues – GSP(P) A number of price indexes are representative of national, rather than state, price movements Single deflation methodology used – output used as an indicator for value added, data on intermediate consumption not available on timely basis We do not produce state supply-use or input-output tables - product mixes within industries may vary on a state basis, this is not picked up Allocation of activity spread across regions i.e. Mining operation vs Mining company headquarters

22. Further information National Accounts: Concepts Sources and Methods –Catalogue number 5216.0 Information Paper: Gross State Product using the Production Approach GSP(P) –Cat. No. 5220.0.55.002 Australian National Accounts: State Accounts –Cat. No. 5220.0

23. Questions?